{"id":16135,"date":"2018-07-26T16:37:09","date_gmt":"2018-07-26T16:37:09","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/07\/26\/boeings-kc-46-penalties-now-up-to-34b-thanks-to-new-426m-charge\/"},"modified":"2026-08-07T21:34:45","modified_gmt":"2026-08-07T21:34:45","slug":"boeings-kc-46-penalties-now-up-to-34b-thanks-to-new-426m-charge","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/air\/2018\/07\/26\/boeings-kc-46-penalties-now-up-to-34b-thanks-to-new-426m-charge\/","title":{"rendered":"Boeing\u2019s KC-46 penalties now up to $3.4B thanks to new $426M charge"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">CLUJ-NAPOCA, Romania \u2014 Another financial quarter meant <a href=\"https:\/\/www.defensenews.com\/air\/2018\/05\/04\/boeing-pushes-back-on-its-bad-reputation-on-kc-46-tanker-program\/\" target=\"_blank\">another financial hit for Boeing<\/a>, which disclosed $426 million in cost overruns to the KC-46 tanker program during an earnings call Wednesday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The newest charge brings Boeing up to $3.4 billion in <a href=\"https:\/\/www.defensenews.com\/air\/2017\/10\/25\/boeing-hit-with-another-kc-46-cost-overrun-this-time-worth-329m\/\" target=\"_blank\">pretax overruns on the program<\/a>, and \u2014 due to its fixed-price contract with the U.S. Air Force \u2014 the company is <a href=\"https:\/\/www.defensenews.com\/air\/2017\/01\/25\/boeing-takes-another-201m-hit-on-kc-46-tanker\/\" target=\"_blank\">required to foot the bill<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The price growth was attributed to delays in the certification process as well as \u201chigher estimated costs\u201d for incorporating needed modifications to six flight test and two early-build aircraft.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/digital-show-dailies\/farnborough\/2018\/07\/16\/us-air-force-completes-tests-of-troubled-kc-46-vision-system-but-is-it-fixed\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/636045173926440334-tanker-refueljpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">US Air Force completes tests of troubled KC-46 vision system, but is it fixed?<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">There is some evidence that Boeing has improved the KC-46&#039;s remote vision system&#039;s performance, but the Air Force isn&#039;t ready to hail it a success just yet.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">After tax, the charges come down to about $334 million, said Boeing CEO Dennis Muilenburg during the July 25 earnings call.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe continue to make steady progress towards final certification for the KC-46 tanker and recently completed all flight tests required to deliver the first aircraft, which is expected to be in October of this year, as now agreed upon with the U.S. Air Force,\u201d he said. \u201cThis is a significant milestone for us and our customer, representing the culmination of three years of testing and over 3,300 flight hours.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Now that the flight testing needed for first delivery is complete and the final configuration of each KC-46 has been defined, Boeing can move ahead on wrapping up the manufacture of the first eight aircraft, Muilenburg said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWhile there is still a lot of work ahead of us, we now have a very clear line of sight what is needed to deliver these highly mission-capable aircraft to our customers,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Air Force plans to buy 179 KC-46s, with the first 18 aircraft under a contractual obligation to be delivered in October. Boeing will likely miss that \u201crequired assets available\u201d deadline because the earliest it can deliver the first tanker is October, and the Air Force is not capable of accepting 18 aircraft at a time. However, it is unclear whether Boeing will weather another financial penalty should that happen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although Boeing has incurred massive costs over the KC-46\u2019s development, which was capped at $4.9 billion, Muilenburg said Wednesday that the company \u201cremain[s] confident in the long-term value of this franchise\u201d due to a projected program that will number hundreds of planes, as well as associated training and follow-on support.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The charge was due to certification delays and the cost of modifying early production aircraft.<\/p>\n","protected":false},"author":7,"featured_media":29478,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":7,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[7,160,12,36],"tags":[],"coauthors":[3384],"class_list":["post-16135","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-air","category-daily-news-roundup","category-industry","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"YMVUVZNA5NECJNLMTCYMXZ52PI","arc_canonical_url":"\/air\/2018\/07\/26\/boeings-kc-46-penalties-now-up-to-34b-thanks-to-new-426m-charge\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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