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New Air Force One planes were once set to become part of Russian airline

CNBC logo CNBC 8/1/2017 Phil LeBeau


Almost eight months after President Donald Trump first criticized the multibillion dollar plan to buy two new 747's to be Air Force One and its backup, the Commander in Chief is close to getting a new deal.

Here's the ironic twist: The 747's that will be modified to become the president's fleet were once scheduled to be part of a Russian airline.

"We're still working toward a deal to provide two 747-8s to the Air Force," said Caroline Hutcheson, a Boeing (BA) spokeswoman. "This deal is focused on providing a great value for the Air Force and the best price for the taxpayer."

That price is still being finalized. Officially, the cost a new 747-8 is just under $390 million, though in this case the price of buying the planes themselves is likely to be much lower.

What's unclear is how much these planes will cost taxpayers after they have been modified so they have the latest communications and defense capabilities.

"We are in the final stages of coordination on a potential deal," said Anne Stefanek, a spokeswoman for the Air Force. "At this point, we have no further comment or details to share."

The irony of this potential deal is the two planes involved were once sold to the bankrupt Russian airline Transaero. They were originally ordered in 2013, but Transaero never took delivery of them. So after Boeing built the planes, they were put in storage at a small airport in the Mojave Desert. That airport's "boneyard" is where many former commercial airplanes are stored because the dry climate keeps the planes from suffering corrosion.

In other words, the Air Force will be getting two nearly-new 747's that have never been in service and will immediately be ready for modification.

That modification, done to specifications set by the Air Force, Secret Service and the White House Military Office, is where many of the costs related to the new Air Force One and its backup will come into play.

In December, one month after being elected president, Trump blasted Boeing for the initial cost of the Air Force One Project.

"Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!" tweeted the president on Dec. 6.

Trump's tweet caused shares of Boeing to plunge as investors feared the White House would start meddling in other military contracts involving Boeing. Since then, the president has struck a far more positive tone about Boeing and has visited the company's plant in Charleston, South Carolina, where he praised the manufacturer and its workers.

This week, shares of Boeing soared to an all-time high.


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