Will Trump’s New Air Force One Deal Save US Military Any Money?

President Donald Trump sat down with Boeing CEO Dennis Muilenburg at the White House on Tuesday, trying to finalize a multi-billion dollar deal for two new Air Force One airplanes, according to sources with knowledge of the deal.

In the meeting, Trump was trying to renegotiate a stalled deal between the Air Force and Boeing, for the complex modification of the two 747 airliners that the military service bought from the company last year, Defense One reported.

The airliners in question are two 747-8 aircrafts, which Boeing had originally built for a Russian airline, but never delivered it because by then the latter had gone bankrupt.

Trump and Boeing have not been on the same page in the past. The president tweeted in December 2016, criticizing the deal, which at the time was costing the Air Force an estimated $4 billion.

“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!” Trump tweeted, a month before his inauguration into the presidential office.

It is not immediately clear if the final deal brokered between the Air Force and Boeing in August 2017 — regarding the airliners — cost less than the estimated price, which Trump had objected to.

Relation between the president and the aircraft manufacturing company improved after he took office. Trump and Muilenburg have talked several times and the POTUS also visited a Boeing 787 Dreamliner factory in South Carolina in Feb. 2017.

Regarding the latest deal, which involves a number of modifications to be installed inside the unique Air Force One aircraft — including conference rooms, a presidential office, and secure military communications allowing the president to launch nuclear weapons from the vessel if needed — the U.S. military wanted to strike a fixed-price deal.

According to the Air Force’s fiscal 2019 budget proposal, the projected cost of the new planes is $4 billion. Since the deal has not been finalized yet and the negotiations are on, it would be difficult to say for sure if the final numbers end up saving the military any money.

Also, it is to be seen if Muilenburg actually agrees to strike a fixed-price deal with the Air Force since a similar contract finalized in 2011 for new aerial refueling tanker aircraft cost the Chicago-based firm about $2 billion. Striking a fixed-price deal automatically makes Boeing liable for any cost overruns incurred after the contract is signed.

In spite of the considerable cost overruns, Muilenburg said in Oct. 2017 — a couple of months before delivery deadline — that he believed that the deal was lucrative for his company.

“We remain very confident,” he said, Defense News reported. “The opportunity is measured in hundreds of aircraft. We expect this to be a long-term production and support franchise, one that will add tremendous value for our customers, and the need for the new tankers is very clear. So the fundamentals for the program are strong, the long-term value proposition is very strong.”