Air Force One Costs Hit Boeing Q2 Results

Boeing (BA) recorded a $280 million charge in the second quarter of 2026 on the VC-25B program, the effort to deliver new Air Force One aircraft. The company described the charge as related to investment in additional production and certification resources. This program uses modified 747-8 jets to serve as the future presidential aircraft, and the latest cost hit reflects intensified work to meet delivery and certification schedules.

The VC-25B charge was booked within Boeing’s Defense, Space & Security segment. The added expense played a significant role in pushing that segment into the red for the quarter. It also contributed to the company’s overall loss, underscoring how fixed-price defense contracts can affect near-term financial performance when costs rise.

Boeing’s Defense, Space & Security unit posted an operating loss of $15 million in the second quarter of 2026. A year earlier, the same segment had generated an operating profit of $110 million. The shift to a loss is closely tied to the VC-25B charge, which reduced profitability even as work on the program progressed.

The company has emphasized continued progress on its development programs, including the VC-25B. Additional production and certification resources are being deployed to stay on schedule. These investments, while pressuring current results, are intended to support successful completion of key defense commitments.

Across the company, Boeing reported a GAAP net loss of $428 million for the second quarter of 2026. On an adjusted or core basis, the loss came to $0.76 per share. Despite the net loss, revenue for the quarter rose about 8% to roughly $24.6 billion, reflecting continued demand across Boeing’s businesses.

Boeing generated $631 million in free cash flow in the quarter. Positive free cash flow, even in a loss-making period, indicates that operating cash generation and working capital movements were favorable. The company continues to aim for meaningful free cash flow for the full year, using the proceeds to support operations and ongoing programs.

Boeing still expects the first delivery of the VC-25B aircraft in 2028. The company is advancing final assembly and certification work to meet this timeline. The recent charge reflects the decision to add resources to keep the program on track within that schedule.

Management has framed the quarter as one of progress on development programs, even as specific defense contracts, including the VC-25B, weigh on profitability. The balance between meeting contractual obligations and managing cost risk remains a central issue for the company’s defense business.