Wednesday, December 7, 2016

Trump's Blustering About Air Force One Is a Bunch of Hot Air

Yesterday Trump called for the cancellation of the order of the new 747-8 to replace Air Force One. This is an uninformed and reckless proposition, likely colored by Trump’s own suspect track record with his 757, and posturing both politically, and to negotiate with Boeing.

Let’s start with where Trump is coming from. Trump has several private aircraft in his fleet and in 2011 he bought a 757-200 from Paul Allen, cofounder of Microsoft and owner of the Seattle Seahawks. The 757 was already in a VIP configuration and while Trump claimed he “gutted it” and replaced everything, he didn’t change a single thing in the layout of the aircraft or the high-end entertainment system that Paul Allen already had installed. All he really did was put new carpets in, recover the chairs with new leather, have all the metal gold plated, and paint a big T on the tail. The company that did the work is called Stambaugh Aviation in Georgia, a tiny aircraft maintenance provider equivalent to taking your car to your cousin Hector who works on cars on the side out of his parent’s garage.

Trump claims his 757 is worth $100m. That’s like me saying my 2008 Buick is worth its original list price of $38k (instead of the $12k it’s actually worth in 2016) because my cousin Hector put really shiny rims on it, glued rhinestones to the steering wheel, and painted a giant T on the driver’s door.  

The mission profile of Trump’s 757 is to deliver Trump and his entourage from Trump’s golf course on one side of the world to his hotel on the other side with the maximum amount of ostentatiousness possible. Air Force One’s mission is very different. The presidential aircraft is designed to be the safest possible mode of travel for the president, and to essentially replace the white house in case of war or catastrophe. It also transports the president, his entourage, and the media wherever the president goes.

Being able to run the country from the air (essentially indefinitely with aerial refueling) while in the midst of nuclear war is a big task that requires extremely sophisticated technology and doing things that have never been done before. For instance, hardening of electronics against radiation means that the already expensive avionics normally used in aviation can’t be used, and a hardened version must be developed. Add to that the communications equipment, defensive countermeasures, and whatever other classified things Air Force One can do, and you’ve got a big price tag.

The list price of the 747-8i is $378.5m. Add to that a custom VIP interior for about $100m, and you’re at $478.5m per aircraft before you’ve added the expensive communication and defensive modifications. These numbers seem large, but they’re not exaggerated. Over a dozen 747-400 aircraft are in service as VIP transports, and 8 of the new 747-8 aircraft have been sold as VIP transport. These are the costs to complete a 4,786 square foot flying fortress that transports VIPs (which certainly isn’t smaller than the 1,299 square feet in a 757 as Trump has stated).

When Obama initially started the process to replace the 1990s era 747-400s that current serve as Air Force One, the proposal was for four new aircraft. The current proposal is for 3 aircraft and the latest reports put the budget at $2.7b or $900m each which budgets $400m for the hardened communications and defensive countermeasures for each plane.

So, sure Trump, you could do this a lot cheaper. You could buy a new 747-8 for $378.5m and take it to cousin Hector and have a cut-rate interior put in for $75m and be at $453.5m per aircraft. But then all you could do on the plane is watch Netflix and Skype over the wifi, but you wouldn’t be able to lead the free world when it needs leadership the most.

What’s really happening here is posturing by Trump by putting a crazy idea out there to cancel the program in order to set the bounds of the negotiation as broad as possible so he can negotiate a better deal. What will really happen is Trump will talk to the Air Force who will tell him about the mission requirements and what they’re asking Boeing to do and he’ll understand that most of it is actually needed. He probably already understands, but he’s posturing and needs Boeing to think he’s willing to axe the whole program. Then Trump will say they don’t need to be able to shoot satellites out of space from Air Force One, and the price will drop from $900m each to $800m each. Then he’ll order two instead of three, which actually makes sense, and the final price tag will be $1.6b instead of the $2.7b in the current budget (or the $4b number Trump just made up out of thin air). Then he’ll claim he slashed the budget by 60% (again compared to his made-up number) when he really just huffed and puffed and ordered one less spare plane.

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