Due to Trump... Boeing suffers 1.4 trillion won loss from Air Force One contract impact

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] American aircraft manufacturer Boeing revealed on the 27th (local time) that it suffered a huge loss of 1.4 trillion won due to the contract related to the presidential aircraft 'Air Force One' made during former President Donald Trump's administration.

According to CNBC and other media, Dave Calhoun, Boeing's CEO, stated during a conference call with analysts after the first-quarter earnings announcement that the company incurred a loss of $1.1 billion (approximately 1.4 trillion won) related to the modification work of two 747 jumbo jets to be supplied as Air Force One. He said, "There is still a risk of recording additional losses (related to Air Force One) in the future," and added, "Boeing might have been better off not taking the Air Force One contract."

The Air Force One contract was made in February 2018 between then-CEO Dennis Muilenburg and the Trump administration. After his election, former President Trump negotiated with Boeing to introduce a new Air Force One, during which there was a tug-of-war over modification costs.

At that time, one month after his election, former President Trump tweeted to cancel the contract, saying Boeing's new Air Force One modification costs were "out of control," putting pressure on Boeing. Eventually, Boeing signed a contract to modify two Boeing 747 aircraft to supply as Air Force One, agreeing that the company would bear the excess costs instead of the federal government.

Regarding the new Air Force One, former President Trump requested a design change from the traditional light blue representing Air Force One to red, white, and dark blue. Subsequently, as costs increased during development and the expected delivery date was delayed by nearly two years from the original plan, Boeing's burden significantly grew.

On this day, Boeing announced first-quarter earnings that fell short of Wall Street expectations due to additional Air Force One costs, delays in approval of the 777X model, global supply chain disruptions, and the aftermath of the Russia-Ukraine war. First-quarter revenue was $13.99 billion, below the market forecast of $16 billion, and the net loss doubled from the same period last year to $1.2 billion.

Following the earnings impact, Boeing's stock price plunged 7.5% on the day.

This content was produced with the assistance of AI translation services.