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Supply chain issues and changing requirements cause delays

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Boeing ( BA ) faces over $2 billion in costs due to fixed-price

contract

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Trump's involvement may lead to further Boeing ( BA ) challenges

By Andrea Shalal

WEST PALM BEACH, Florida, Feb 17 (Reuters) - The Air

Force One program may be further delayed until 2029 or years

later, a senior administration official said, citing supply

chain issues and changing requirements, after the White House

highlighted delays in the project over the weekend.

The delays are frustrating, but not much can be done to

speed delivery, the official told Reuters, noting that Boeing ( BA )

faced problems getting components since some manufacturers had

gone out of business.

Some requirements for the aircraft had also changed, given

evolving potential threats, the official said.

Boeing ( BA ) had no immediate comment on the program, known as

VC-25B. The first aircraft was slated for delivery in December

2024, but Boeing ( BA ) has pushed its delivery off until at least 2027

or 2028 - towards the end of Trump's second term in office.

Breaking Defense in December reported that the presidential

aircraft program faced new delays that could push delivery of

the first jet to 2029 or later.

Asked about the report, the administration official

acknowledged the fresh delays and the delay could stretch "years

beyond" 2029.

U.S. President Donald Trump has been deeply engaged with the

program since his 2016 presidential campaign, extracting a

promise from then-Boeing ( BA ) CEO Dennis Muilenburg to cap the

program's cost at $4 billion. Those fixed-price contract terms,

questioned by analysts at the time and finalized in 2018, have

cost Boeing ( BA ) over $2 billion so far.

Trump's renewed engagement could signal further problems for

Boeing ( BA ), whose current CEO Kelly Ortberg said the company was

meeting with Trump's billionaire cost-cutting ally Elon Musk to

get the plane updated quicker, analysts said.

"The president wants those planes sooner so we're working

with Elon to see what can we do to pull up the schedule of those

programs," Ortberg told CNBC on Jan. 28.

Boeing ( BA ) leaders have said that production has been slowed by

supply chain issues, high costs and the complexity of the planes

that are intended to be an airborne White House.

Trump waded back into the issue on Saturday when he toured

a 12-year-old 747-8 aircraft at Palm Beach International

Airport, near his Florida vacation home, to get a better

understanding of the configuration of the two new presidential

transport aircraft.

The 747-8 aircraft Trump toured was formerly owned by Qatar

but has since been rebuilt and now operates as a charter.

"He saw how everything was configured. It's a bigger space,"

the official said, adding that the current Air Force One

aircraft were relatively small. The new airplane would

accommodate more people, including media, the official said.