Defense Department Clears Boeing Airborne Tanker for Production
August 12 2016 - 8:50PM
Dow Jones News
By Jon Ostrower
The Pentagon on Friday cleared Boeing Co.'s new aerial fueling
tanker for production, a major milestone as the plane maker seeks
to move past delays and heavy financial losses.
The declaration by the Defense Department clears the way for a
$2.8 billion initial contract.
The milestone, which was expected in 2015, has slipped several
times as Boeing has worked through design and manufacturing issues
with the aircraft.
Troubles developing the KC-46 program, which is based on a
heavily modified 767 airliner, has generated about $2 billion in
write-offs by the plane maker.
"The KC-46 is ready to take the next step," said Gen. Dave
Goldfein, Air Force Chief of Staff in a statement. The Air Force
said it would award Boeing contracts over the next 30 days for 19
KC-46 aircraft and their spare parts.
Boeing has been flying the tanker with its specialized refueling
equipment for nearly 11 months, demonstrating the aircraft's
capability passing fuel to Air Force, Marines and Navy jets. It ran
into technical issues earlier this year while testing its refueling
boom.
That forced a redesign of parts of the system and partially
contributed to delayed first deliveries of the tanker by five
months, pushing the first 18 jets scheduled arrival to the Air
Force to early 2018. The company completed the initial round of
testing on the revised design in July, clearing the way for the
green light from the Pentagon.
Despite the delays, technical hiccups and the belated approval
from the Defense Department, Boeing has continued to produce
production KC-46 aircraft at its factory in Everett, Wash., which
will be fitted with refueling equipment and other military hardware
once as certification testing is completed before first deliveries
in August 2017.
Write to Jon Ostrower at jon.ostrower@wsj.com
(END) Dow Jones Newswires
August 12, 2016 20:35 ET (00:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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