23 March 2023
Boeing to take another KC-46A tanker charge
by Marc Selinger
A Boeing KC-46A tanker touches down during a visit to Japan. (US Air Force)
Boeing expects to take another earnings charge on its long-troubled KC-46A Pegasus tanker because of a “supplier quality issue” with the centre fuel tank, according to an official at the US aerospace manufacturer.
The amount will be far smaller than the KC-46A's third quarter 2022 charge of USD1.2 billion, which Boeing blamed on labour and parts shortages, Boeing's chief financial officer, Brian West, said on 22 March at the Bank of America Global Industrials Conference. Asked whether the new charge would be USD1 billion, West replied, “Not billion, not even half of that.”
The KC-46A is a variant of the 767 commercial aircraft, which is also affected by the tank issue. West said Boeing has identified a fix for the problem and is working to implement it on planes that are in production and in service.
“We will deliver airplanes as we complete rework, and we are not changing our overall delivery plans for the year,” a Boeing spokesperson said in a statement. “Our engineering analysis to date shows that the issue is not an immediate safety-of-flight concern.”
Not counting West's revelation, the KC-46A programme has recorded USD6.9 billion in charges because of years of technical problems and schedule overruns. Boeing developed the KC-46A for the US Air Force (USAF) under a fixed-price contract that makes Boeing responsible for cost overruns.
Boeing has delivered 68 KC-46As to the USAF and is on contract to provide the service with another 60. On the international front, Boeing has delivered two KC-46As to Japan, of six on contract, and is on contract to provide four KC-46As to Israel.
A USAF spokesperson declined to comment on West's remarks.
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Boeing expects to take another earnings charge on its long-troubled KC-46A Pegasus tanker because of...
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