(Photographer: Simon Dawson/Bloomberg)

U.S. Buys Boeing 747s Once Set for Russia for Air Force One

(Bloomberg) -- The U.S. Air Force reached a deal with Boeing Co. for two 747 jets to serve as Air Force One, taking advantage of an unusual limited-time discount on planes once bound for Russia.

“We got a really good deal,” Air Force Secretary Heather Wilson said Friday in an interview. “I’m pleased with that.” The service said the jets, which will require extensive work to serve as planes for the president, are scheduled to be operational in 2024.

The pact sets the stage for a modernized Air Force One program after President Donald Trump criticized its cost, threatened to cancel the order and later boasted of negotiating with Boeing to reduce the expense. The U.S. planemaker has had the two jumbo jets in storage since they rolled off the assembly line in 2015 for Transaero Airlines, a Russian carrier that never signed for them before dissolving later that year.

The Air Force didn’t disclose the discount price for the two planes, which Boeing considered sensitive competitive information.

“Boeing has said they do not want us to release that because they sell these things commercially,” Wilson said in the interview. “The whole program cost will be known, but the actual price of individual airframes” won’t be, she said. That nondisclosure “was part of the condition for the sale,” and “I can live with that.”

Shifting Funds

Congressional defense committees approved plans to shift $195 million in previously approved defense funds for the current year to speed action on the planes, congressional aides said this week. Boeing offered favorable pricing if a contract was awarded by this month, according to a government funding request. The model carries a list price of $386.8 million.

Darlene Costello, the principal deputy assistant secretary of the Air Force for acquisition, called the award for the 747s “a significant step towards ensuring an overall affordable program. As we move forward we will continue to seek and implement cost savings opportunities,” she said in a statement.

Pricey and complex modifications will be required to turn the planes into the flying fortresses that ferry U.S. presidents around the world. The most recent Air Force estimate is that the Air Force One program will cost $3.51 billion from the current fiscal year through fiscal 2022, mostly for research and development, according to Bloomberg Government analyst Robert Levinson.

The Air Force expects the planes to have the range to fly between continents and provide work and sleeping quarters for the president and first family. They also have to be equipped with highly advanced, secure communications and classified defense capabilities.

The White House Military Office is working with the Air Force to define the aircraft’s requirements.

As president-elect, Trump tweeted that the “costs are out of control” for the new planes and wrote, “Cancel order.”