Shares of Boeing Co. climbed 2.8% on Thursday after a Government Accountability Office review credited the company with tangible progress on the technical obstacles that have pushed back delivery of two jets configured to serve as Air Force One.
The GAO's annual assessment of high-cost Pentagon programs said the contractor is likely to hand over the first of the modified pair by 2028. Inspectors cited advances in several discrete engineering areas, including completion of the environmental control system design and resolution of cabin decompression issues. The report also highlighted Boeing's efforts to hire and retain a larger pool of qualified mechanics.
While the Air Force One work drew attention because of the stock-market reaction, the GAO placed the program in a broader context. Its review covered 104 of the Department of Defense's most expensive programs, a portfolio the auditors valued at about $2.4 trillion. Within that sweep, the report said the United States' inaugural hypersonic weapon - already delayed by at least two years from its planned field deployment - is encountering additional delays tied to unresolved production problems.
One of the report's central findings was a lengthening timeline for capability delivery across major acquisition programs. The GAO said the overall average time to field a new capability has climbed to more than 12 years. The Department of Defense plans to invest at least $49 billion across 23 of what it classifies as its most expensive middle-tier acquisition programs; the auditors said the cost of that subset rose mainly because a larger share of the biggest and most time-consuming efforts used that acquisition pathway this year.
In response to the findings, the GAO recommended that the Defense Department require programs that aim to rapidly deliver capabilities to either begin with mature technologies or isolate development of immature technologies outside of the rapid-delivery program. The Defense Department indicated it concurred with that recommendation.
For market participants, the combination of program-specific improvement at Boeing and persistent, systemic delays across the defense acquisition landscape underlines the mixed signals facing defense contractors and investors. Progress on engineering design and workforce stability at Boeing produced an immediate positive reaction in the company's shares, even as the GAO's wider review underscores ongoing production, scheduling, and cost pressures across the Pentagon's most expensive programs.