Boeing has incurred another $148 million in losses for its KC-46 program due to higher than expected manufacturing costs, as the company works with the Air Force to address continued deficiencies in the tanker’s capabilities.
The company disclosed the loss in a Jan. 31 filing with the Securities and Exchange Commission, stating the “reach-forward losses” of $148 million follows $736 million last year, and $445 million the year before. Boeing has already absorbed more than $3 billion in losses on the fixed-price KC-46 contract.
Boeing, in the filing, says it expects the full contract value, for all 179 aircraft and options exercised, will be about $30 billion. To date, 30 aircraft have been delivered.
The same day as the SEC filing, the Pentagon’s Department of Operational Test and Evaluation released its 2019 annual report on the program, detailing the deficiencies still impacting the fleet.
The KC-46 still has problems with the lack of visual acuity in the remote vision system, there is no indication of a high boom radial load presented at the boom operator’s station, boom stiffness in refueling lightweight aircraft, as well as issues with cargo locks. Air Mobility Command recently announced it has approved a fix for the cargo lock issue, but the other three deficiencies will linger. The service has said it does not expect the remote viewing system (RVS) issue to be fixed or the aircraft to be deployable for three-to-four years.
“Boeing and the Air Force offices are identifying solutions to remediate the deficiencies,” the report states. “Until these deficiencies are resolved, the KC-46A will not be fully mission capable.”
In the report, DOT&E recommends the Air Force ensure that changes necessary to the RVS will make it “mission capable under all expected air refueling conditions.” USAF leaders have continued to express frustration with Boeing’s pace of addressing flaws with the RVS. Bloomberg reported recently that Air Force Chief of Staff Gen. David Goldfein wrote to new Boeing CEO David Calhoun to demand the company focus more on the KC-46 because the service “continues to accept deliveries of a tanker incapable of performing its primary operational mission.”