Boeing disclosed another $280m loss on the programme to build two new Air Force One aircraft in its second-quarter results on Tuesday, attributing it to higher estimated costs to complete structural and wiring installation and to satisfy airworthiness certification requirements. It is the latest in a run of charges on the VC-25B that stretches back five years, and Boeing reports them the way accounting standards require — one increment at a time, in the fixed-price contracts note, against a programme whose cumulative position the company does not state.
Totalled from its own filings, the increments since 2022 come to about $2.65bn: $1,452m in 2022, $482m in 2023, $379m in 2024, $60m in 2025 and $280m in the second quarter of this year. Boeing currently describes the programme as a $4bn contract, which puts the disclosed losses at roughly two-thirds of the contract’s value. Include the $318m taken in 2021 and the figure reaches about $2.97bn, or close to three-quarters.
One number deserves care. Boeing’s 2022 annual report described the programme as worth $4.3bn; its filings for 2024, 2025 and this quarter all say $4bn. The ratio depends on which figure is used, and against the earlier $4.3bn the cumulative charges are just under 70%. We have used the company’s current stated value rather than silently mixing the two.
The schedule has moved again. Boeing’s annual report for 2025 said it expected to finalise the contract terms in early 2026; the second-quarter filing now puts that in the third quarter, and says the finalisation will reset the schedule and adjust the requirements. First delivery is still guided to 2028. The aircraft were ordered in 2018 under a fixed-price deal that a previous administration negotiated down from Boeing’s original proposal, which is precisely the structure that leaves the manufacturer, rather than the customer, absorbing the cost of every change and every certification surprise.
The presidential programme sits inside a defence unit that swung to a $15m operating loss in the quarter from $110m of earnings a year earlier. Group revenue rose 8% to $24,560m, and Boeing reported a net loss of $428m, or 67 cents a share.
Two details in the release are worth setting beside the headline. Core operating earnings — Boeing’s own preferred measure — came to $1m on $24,560m of revenue, a margin of four thousandths of one per cent. And the core loss per share of 76 cents was wider than the statutory loss of 67 cents, an inversion of the usual direction: the adjusted number was worse than the GAAP number, because Boeing’s core measure strips out a $155m pension benefit that the statutory accounts include.
Cash tells a similar story about the half rather than the quarter. Boeing generated $631m of free cash flow in the second quarter, which reads as a turn. But first-half capital expenditure of $2,008m, up 82% from $1,101m a year earlier, exceeded first-half operating cash flow of $1,185m by $823m — so the positive quarter sits inside a first half that consumed cash.
Commercial Airplanes is where the recovery is real, and even there the arithmetic is worth doing. The division delivered 171 aircraft in the quarter against 150 a year earlier, and booked $11,751m of revenue against $10,874m. That works out at $68.7m of revenue per delivery, down 5.2% from $72.5m — a decline the release does not draw attention to, in a quarter whose margin improvement it attributes partly to favourable mix. Total backlog reached a record $715bn, with more than 6,200 aircraft on order.