The 2 New AF1’s for POTUS are Coming From the Boneyard

Transaero was owned primarily by Aleksandr Pleshakov and his wife Olga Pleshakova, who was the CEO of the airline for most of its existence. In 2105, Dmitry Medvedev gave the green light to begin bankruptcy proceedings for Transaero airlines, according to sources cited by online newspaper Gazeta.ru. Negotiations on a takeover of Russia’s second-biggest carrier by Aeroflot have been deadlocked. According to sources, Aeroflot took a hard line refusing the Transaero consolidation. Later that same year,

Aeroflot said it intended to acquire a 75 percent stake in Transaero, which has about a $4 billion debt. Aeroflot’s main shareholder is the Russian state, which owns 51 percent stake in the carrier.

With the hundreds of millions of dollars the Obama gave to Iran due to a resolving outstanding issues with Iran, many of those dollars have done to bolster Iran’s aircraft industry where Boeing is part of the contractor list.

Further for Boeing and Iran, at list prices, the order is worth in the neighborhood of $17.6 billion, and even applying a standard discount of 45%, Boeing is still walking away with $9.5-10 billion in actual revenue. This represents by far the largest deal between Iran and a U.S. company, and it was inevitable as a result of the relaxed restrictions on Iran’s economy. The Islamic country is certainly aware that its position amongst U.S. politicians, particularly Republicans, is precarious. Accordingly, this order was almost a certainty — as it immensely increases the cost and pain of resuscitating sanctions were the Republicans to attempt such a gambit. Still, a win is a win, and Boeing has won more orders to fill its production gap on the current generation 777 (especially powerful given the rate cut), as well as more orders for the 737 MAX, 777-9X, and critically for the 747-8 (adding a few months of additional production to the backlog).

There are still some outstanding questions, including how Iran Air will finance these aircraft (export financing has been an issue even in Europe), and whether the 747-8 orders are new build or those planned for Transaero. But irrespective of some uncertainty, this is nothing but a win for Boeing.

Trump Wanted a Cheaper Air Force One. So the USAF Is Buying a Bankrupt Russian Firm’s Undelivered 747s

The service is reportedly getting a good deal on the jets, which list for around $390 million and are now sitting in the Mojave Desert.

President Donald Trump said the projected cost of new Air Force One aircraft was too high, so the U.S. Air Force found a way to lower it: by buying a pair of Boeing 747 jetliners abandoned by a bankrupt Russian airline.

Air Force officials are now finalizing a contract with Boeing for the two planes, according to three defense officials with knowledge of the deal. The Pentagon could publicly announce the deal as soon as this week.

We’re working through the final stages of coordination to purchase two commercial 747-8 aircraft and expect to award a contract soon,” Air Force spokeswoman Ann Stefanek said in a statement.

The Air Force is not expected to disclose the specific value of the contract, but officials said that the military is getting a good deal on the planes. Boeing lists the average sticker price of a 747-8 as $386.8 million; the actual amount paid by airlines and other customers varies with quantities, configurations, and so forth.

“We’re still working toward a deal to provide two 747-8s to the Air Force — this deal is focused on providing a great value for the Air Force and the best price for the taxpayer,” Boeing spokeswoman Caroline Hutcheson said in a statement.

The 747s that will be transformed for Presidential transport were originally ordered in 2013 by Transaero, which was Russia’s second-largest airline until it went bankrupt in 2015. Boeing built two of the four jets in the order, but the airline never took ownership of them.

Typically, an airline makes a 1 percent down payment when it orders a plane, then pays the balance in installments. Transaero did not fulfill its scheduled payments, according to an industry source.

“Aeroflot absorbed most of Transaero’s existing fleet, but declined to pick up Transaero’s 747-8I orders worth $1.5 billion at list prices,” FlightGlobalreported last month.

So Boeing flight-tested the two completed jets and put them in storage. Flight tracking data shows that the aircraft, numbered N894BA and N895BA, were last flown in February, to the Southern California Logistics Airport in Victorville, a sprawling facility in the Mojave Desert whose hot, dry air prevents corrosion. This “boneyard” is largely occupied by retired commercial jets that still bear the liveries of Delta, FedEx, British Airways, and Cathay Pacific. Other planes, unmarked, sit with their engines shrinkwrapped in anticipation of one day returning to flight.

Boeing has been paying to store the two 747s in new condition while searching for a buyer, which allowed the Air Force to negotiate a good deal for them, sources said. It’s similar to the way car dealers discount new vehicles from the previous year when new models hit the lot.

Turning a standard 747 into a flying White House requires more than a blue-and-white paint job. After the Air Force takes ownership of the planes, contractors will give them a state-of-the-art communications system, defensive countermeasures, and hardening to withstand an electromagnetic pulse caused by a nuclear explosion. New custom interiors will have conference rooms, offices and seating for White House staff, guests and journalists.

The Pentagon’s 2018 budget request, sent to Congress in February, shows that the Air Force plans to spend nearly $3.2 billion between 2018 and 2022 on two new Air Force One jets. Trump would likely fly on the new planes if he is elected to a second term.

The 747s currently flown as Air Force One are 747-200s, older models that started flying presidents in the early 1990s.

Nicknamed the “Queen of the Skies,” the four-engined 747 has been a tough sell in recent years. Airlines instead have opted for cheaper-to-fly two-engine planes like the 777. Boeing has likely built the last passenger 747; any future orders are likely to be for cargo versions.

United and Delta, the last two American carriers to fly older models of the 747, plan to retire the plane from service by year’s end. Just last week, the iconic aircraft made its last planned domestic revenue flight, a United trip from Chicago to San Francisco.

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Denise Simon

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