Air Force One Impact
Boeing Posts Q2 Loss from Air Force One Costs Despite Revenue Growth and Robust Cash Flow
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Key Points
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A fourth Everett, Washington final assembly line opened in July, with initial focus on the 737 MAX 10 variant.
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Certification flight testing for the 737-7 and 737-10 has been completed, with anticipated FAA certification in 2026 and first deliveries in 2027.
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The 777X program received FAA approval to begin certification flight testing under Type Inspection Authorization 4B, with first delivery expected in 2027.
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The VC-25B Air Force One program involves two new Boeing 747 aircraft; Boeing recorded a $280 million charge tied to this program this quarter as it ramps up production and certification, with first delivery still expected in 2028.
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The Defense, Space & Security segment swung to an operating loss this quarter, driven by the VC-25B program costs (about $15 million), compared with operating profit a year earlier.
Boeing reported a second-quarter net loss of $428 million, or $0.67 per share, as a $280 million charge tied to its delayed Air Force One program wiped out gains from stronger aircraft deliveries, according to Quartz. Revenue rose 8% year over year to $24.56 billion, beating expectations, but the loss was wider than analysts had forecast.
The Air Force One replacement — known as the VC-25B program — involves two new Boeing 747 jets for the U.S. president. First delivery is now expected in 2028, inkl reported. Despite the charge, Boeing posted free cash flow of $631 million and ended the quarter with about $20 billion in cash.
Air Force One Costs Drag Defense Segment Into Loss
Boeing's Defense, Space & Security unit swung to an operating loss this quarter. The $280 million charge on the VC-25B program was the main culprit, according to Yahoo Finance. A year ago, the segment posted an operating profit. The program has repeatedly pushed back its delivery timeline, adding pressure to a defense business already managing multiple fixed-price contracts.
The two Air Force One jets are built on the 747 platform. Boeing is now ramping up production and certification work on the aircraft, but costs have continued to climb. First delivery remains set for 2028, leaving the program years behind its original schedule.
Commercial Airplanes Deliver More Jets, Revenue Climbs
Boeing's Commercial Airplanes unit delivered 171 aircraft in Q2 2026, up from 150 a year earlier. That increase helped push overall revenue higher and narrowed the company's total loss compared to the same period last year, when Boeing lost $697 million, or $0.92 per share, according to Nasdaq.
Boeing is working toward a production rate of 47 737 MAX jets per month. In July, the company opened a fourth final assembly line in Everett, Washington, focused initially on the 737 MAX 10. Certification flight testing for both the 737-7 and 737-10 variants is complete, with FAA certification expected in 2026 and first deliveries in 2027.
777X Clears Key FAA Hurdle as Backlog Hits Record $715 Billion
Boeing's wide-body 777X program got a significant boost this quarter. The FAA granted approval to begin certification flight testing under what Boeing calls Type Inspection Authorization 4B. First delivery of the 777X is now targeted for 2027, according to Quartz.
Boeing's total order backlog climbed to a record roughly $715 billion, reflecting strong demand across its commercial and defense portfolios. The company also reduced its total debt to about $45.9 billion and reported operating cash flow of $1.36 billion, signs that its financial recovery, while uneven, is moving in the right direction, inkl reported.
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