U.S. President Donald Trump has reached an informal agreement with Boeing on a fixed price contract for the new Air Force One program, the White House told Fox News exclusively on Tuesday.
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“Thanks to the president’s negotiations, the contract will save the taxpayers more than $1.4 billion,” Dep. Press Secretary Hogan Gidley.
The new deal will be valued at $3.9 billion, down from the original estimate of more than $5 billion for the two 747 jets and a development program. The price as agreed includes work to develop and build two presidential aircraft, including a communications suite, internal and external stairs, large galleys and structural changes to protect the president and other passengers, a Boeing official said. It also includes some work already on contract, as well as the Engineering, Manufacturing and Development (EMD) contract, which has yet to be awarded, they said.
“Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers. President Trump negotiated a good deal on behalf of the American people,” Boeing said in a statement.
Quality and safety will not be compromised due to the price cut, the administration said.
The Air Force purchased two existing 747 airframes that built for the Russian airline Transaeo, which is now defunct. A Boeing official said the aircraft have always been owned by the plane maker. The jumbo jets have been stored at a facility in Victorville, California—just north of San Bernardino.
Trump met with Boeing CEO Dennis Muilenburg at the White House last week to discuss the deal. Air Force leaders and the Chicago-based plane maker have been negotiating the terms for the modification of the two jets that the military branch purchased last year, according to Defense One.
The president tweeted his frustration in late 2016, saying the costs “are out of control.”
“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!” Trump said in the tweet.
Boeing shares have advanced over 100% during the past 12-months.
Fox News’ John Roberts contributed to this report