Update: In a statement issued shortly before noon ET, Boeing said it is working under a contract valued at $170 million “to help determine the capabilities of these complex military aircraft [Air Force One] that serve the unique requirements of the President of the United States.”
If the new planes are built and delivered as planned, the first will be available to the U.S. president in 2024.
In a tweet posted Monday morning, President-Elect Donald Trump said he wanted to cancel the order placed in January 2015 with Boeing Co. (NYSE: BA) for a pair of 747-8s that are destined to be the new presidential plane, Air Force One.
In a sole source contract, the U.S. Air Force named Boeing as the manufacturer to replace the current fleet of two presidential aircraft. 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.
Here’s Trump’s tweet:
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
The price for the two planes was not specified at the time, but the list price for one 747-8 is $378.5 million, which works out to $757 million for two. But that is only a portion of the $4 billion cost Trump cited.
The president-elect later told reporters in the lobby of the Trump Tower Tuesday morning, “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money but not that much money.”
Here is a comment made by Secretary of the Air Force Deborah Lee James when the contract award was announced nearly two years ago:
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 unspecified “fully missionized” is where the money goes. Boeing is probably selling the actual airplanes to the government at well below the list price.
Aerospace analyst Richard Aboulafia told the Washington Post this morning that Trump’s tweet “was completely nonsensical and based on exactly nothing.” Defense analyst Loren Thompson told the Post:
Air Force One has unique communications, safety and self-protection features so that the president can function under the most trying circumstances — like nuclear war. The price tag is driven by the demands of the mission.
The Trumpian tweet sent Boeing’s stock down about 0.9% Tuesday morning to trade at $150.90, in a 52-week range of $102.10 to $153.755.