Aerospace & Defense

Boeing to Build the Next Air Force One

Boeing 747-200B Air Force OneIn a sole source contract that still does not have a price tag associated with it, the U.S. Air Force announced on Wednesday that Boeing Co. (NYSE: BA) will get the nod to replace the current fleet of two presidential aircraft designated Air Force One. The new planes will be built on Boeing’s 747-8 platform and replace the current Air Force One fleet that operates specially configured 747-200Bs.

The first Air Force One was introduced in 1962 and was built on a 707-320B platform. The current plane includes 4,000 square feet of floor space plus a host of features to accommodate the president and the crowd that tags along with him.

According to Secretary of the Air Force Deborah Lee James:

The presidential aircraft is one of the most visible symbols of the United States of America and the office of the president of the United States. The Boeing 747-8 is the only aircraft manufactured in the United States (that), when fully missionized, meets the necessary capabilities established to execute the presidential support mission, while reflecting the office of the president of the United States of America consistent with the national public interest.

The Air Force concluded that Air Force One must be a four-engine, wide-body aircraft, which narrows the choices down to two: the 747 and the Airbus 380. The Air Force does not say why the contract was awarded to Boeing without bidding, but does note: “The decision, made official through a Determination and Findings document, authorizes the commercial aircraft purchase by other than full and open competition.”

Airbus does have a final assembly plant in Mobile, Ala., but that plant makes the A320 narrow-body jets. While Airbus might want to complain about the lack of an open competition for Air Force One, it probably will not do so.

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Boeing and the Air Force must still negotiate terms and prices, and the Air Force claims that it will “insist upon program affordability through cost conscious procurement practices.” Boeing has not commented on the contract.

Boeing’s stock traded up about 2.5% Thursday morning, at $143.18 in a 52-week range of $116.32 to $144.50. The new 52-week high was set Thursday.

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