Congress Backs Buying Planes Russia Abandoned for Air Force One

(Bloomberg) -- The Pentagon moved a step closer to buying two deeply discounted 747 jumbo jets from Boeing Co. for the next Air Force One fleet after four congressional panels approved a request to shift $195 million in funding, according to congressional aides.

The deal to buy planes to be used by the U.S. president from Boeing has attracted attention because of the reason the company has them sitting in storage and available: They were originally built for Transaero Airlines, once Russia's second-largest airline. The carrier never signed for the humpbacked passenger jets before it dissolved in late 2015.

Air Force access to the $195 million was approved by the Senate and House defense appropriations and authorization committees as part of a Defense Department request to “reprogram” $2.4 billion in previously approved defense funds for the current fiscal year, according to the aides, who asked not to be identified in advance of a formal notification to the Pentagon.

The Air Force said in its request that the shift will take advantage of a limited-time offer from Boeing that's contingent upon a contract award his month. “This effort will ensure delivery of two aircraft by December” instead of late fiscal 2019 and early 2020 as planned now, according to the request.

Boeing is offering favorable pricing if a contract is awarded by this month, according to a government funding request. The model carries a list price of $386.8 million, but the cost to the Air Force for the planes hasn't been set.

The planes would still require extensive -- and pricey -- modifications to turn them into the flying fortresses that ferry U.S. presidents and their entourages around the world.

Classified Capabilities

The Air Force expects the aircraft 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.
“We support the reprogramming as it's key for Air Force funding” while Boeing and the service “work toward a contract,” company spokeswoman Caroline Hutcheson said in an email.

Air Force spokeswoman Ann Stefanek said the service is now “waiting for final coordination on the contract to purchase” the aircraft and sign a preliminary design contract award by the end of September. Boeing is now operating under a $172 million contract for “risk reduction activities” for the program.

President Donald Trump has taken an active interest in the program to replace the current, aging Air Force One planes. Shortly after last year's election, Trump tweeted that the “costs are out of control” for the new planes and wrote, “Cancel order.” He later boasted of negotiating with Boeing to reduce the expense.

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

--With assistance from Roxana Tiron and Julie Johnsson

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert, Joe Sobczyk