Boeing disclosed yet another massive loss on the long-delayed Air Force One replacement program, pushing total cost overruns past $3 billion on a contract the defense giant signed for $3.9 billion, and taxpayers won't cover a dime of the excess.
CEO Kelly Ortberg dropped the $280 million charge during Boeing's second-quarter earnings call Tuesday, attributing it to additional production and certification resources the company poured into the two presidential aircraft. The quarterly loss brought Boeing's overall Q2 deficit to $428 million, more than double what analysts had expected. The Air Force One program, designated VC-25B, was the primary driver.
The numbers tell a straightforward story of a contract gone sideways. Boeing agreed to build two military versions of its 747 jumbo jet under a fixed-price deal signed with President Trump in 2018. The original delivery date for the first aircraft was December 2024. That deadline came and went. Boeing now says the first plane will arrive in mid-2028 and the second in mid-2029, roughly four years late.
Under the fixed-price structure Trump negotiated, Boeing bears full financial responsibility for every dollar spent above the $3.9 billion ceiling. The federal government owes nothing extra. That arrangement, intended to protect taxpayers, has instead turned the program into a slow-motion financial disaster for Boeing's defense division.
Previously reported overruns had already reached $2.8 billion as of 2024, according to Aviation Week. The latest $280 million charge pushed the cumulative figure past $3 billion, meaning Boeing has now spent nearly double the contract's value to build two airplanes it hasn't delivered.
Ortberg framed the charge as an investment in meeting the revised schedule, not an admission of deeper trouble.
"While the charge is disappointing, we recognize how critical schedule performance is to our customer and we are investing accordingly to maintain our commitment to deliver the airplane in 2028."
On the same call, Ortberg told analysts the program had cleared its design phase and moved into modification and testing.
"The good news is that we're through the design phase of that program, and now we're modifying and testing the airplanes. It's very important to our customer that we deliver that airplane on time. We're going to put more resources on to ensure that we do that."
"Put more resources on" is corporate language for spending more money Boeing will never recoup. Each quarter that passes without a finished aircraft adds to a tab the company cannot pass along.
Boeing's own optimism about the 2028 target sits uneasily alongside the Government Accountability Office's assessment. A GAO report released earlier this month found that Boeing is "almost 3 years behind its current baseline schedule" on the VC-25B program. The report's document number suggests it was filed as GAO-26-108457.
The baseline schedule itself had already been revised from the original December 2024 delivery date. So "almost 3 years behind" is measured against a timeline that was already pushed back, not against the date Boeing originally promised.
The Washington Examiner noted that the massive delays forced the Trump administration to accept a Boeing 747 gifted by Qatar as a temporary presidential aircraft. That jet, valued at roughly $400 million, served as a stand-in until it was taken out of service earlier this month to receive anti-missile defense upgrades. The timeline for its return has not been disclosed.
The current fleet of presidential aircraft, two Boeing 747-200 jumbo jets, has been in service since the 1990s. Those planes were already aging when the replacement contract was signed eight years ago. Every year Boeing misses its delivery target is another year the Air Force must maintain and secure aircraft that are more than three decades old.
Trump has repeatedly criticized Boeing's cost overruns and delays on the program. The White House did not immediately respond to a request for comment from the New York Post.
Ortberg, who took the helm at Boeing amid a broader corporate crisis, tried to project confidence beyond the Air Force One mess. He told investors the company's operations were stabilizing.
"Our operations are more stable, and key certification programs remain on plan. Our focus has been on restoring trust and we are now building on that through a sustained focus on safety, quality, and on-time performance."
"On-time performance" is a difficult phrase to deploy with a straight face when the company's most prominent government contract is running four years late and hemorrhaging cash. Boeing's defense division has struggled with fixed-price contracts across multiple programs, and the VC-25B has become the most visible example of that pattern.
Air Force One is not just any government contract. It is the most recognizable symbol of American presidential power, a flying command center that carries the leader of the free world. Delays and budget failures on this program carry weight beyond Boeing's balance sheet. They raise questions about whether the nation's premier defense contractor can execute on a project where failure is not an option.
The Air Force One program has drawn attention at a time when presidential travel itself remains a high-profile matter, with Trump using the aircraft for diplomatic summits and foreign engagements that demand secure, modern platforms.
Meanwhile, the broader military community continues to face its own challenges. Incidents like the recent death of an airman at Vandenberg Space Force Base underscore the risks service members shoulder daily, risks that demand reliable equipment and serious institutional accountability from defense contractors.
The 2018 contract structure deserves credit for one thing: it kept the American taxpayer off the hook. Trump negotiated a fixed-price agreement specifically to prevent the kind of open-ended billing that has plagued other Pentagon procurement programs for decades. Whatever Boeing spends above $3.9 billion comes out of Boeing's pocket.
That protection has held. The government has not paid a cent beyond the contract ceiling despite overruns that now approach the contract's full value. But the arrangement also means Boeing has little financial incentive to walk away. The company is locked in, absorbing losses quarter after quarter, pouring resources into a program it cannot profitably complete.
Several open questions remain. Boeing has not disclosed what specific resources it added to justify the $280 million charge. The GAO report's full findings beyond the schedule delay have not been publicly detailed in available reporting. And no one has explained how a program that was supposed to deliver two planes by late 2024 ended up nearly half a decade behind with no end to the cost spiral in sight.
Ortberg says Boeing will deliver in 2028. The GAO says the company is almost three years behind its own revised schedule. The $3 billion overrun says something louder than either of them.
When a company spends nearly $7 billion to fulfill a $3.9 billion contract and still hasn't delivered the product, the problem isn't a "disappointing charge." It's a contractor that made promises it couldn't keep, and a reminder that accountability in government procurement starts with holding the other side of the deal to its word.
