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Boeing Says KC-46 Tanker Program Is On Track Even After Fuel System Rework

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Dennis Muilenburg, Boeing's new chief executive, says the KC-46 tanker program is on track

Boeing says it’s confident the company will still be able to deliver 18 tanker aircraft to the U.S. Air Force two years from now in spite of problems that emerged in the most recent quarter. 

The KC-46 tanker program was the focus of a big fight between Boeing and Airbus for years before the contract finally went to Boeing. Now, the first tankers are being built in Everett.

Boeing discovered during tests in recent weeks that the company would have to rework the plane’s fuel system. That resulted in an after-tax charge of $536 million in the June quarter.

Boeing’s new CEO, Dennis Muilenburg, says this is not a major setback.

"We have our arms around this, we understand the work that has to be done, we have found a way to execute that work and keep the program on schedule for our customer, and we’re confident that we’re going to do that," Muilenburg said on an earnings call with analysts and reporters. 

Still, this is a fixed-price contract, and that means Boeing has to absorb any cost overruns.

But Muilenburg says long term, getting into this business is a good move for Boeing. He says there’s a potential market of as many as 400 aircraft valued at $80 billion. The Air Force has said it wants a total of 179 tankers. 

In July 2017, Ashley Gross became KNKX's youth and education reporter after years of covering the business and labor beat. She joined the station in May 2012 and previously worked five years at WBEZ in Chicago, where she reported on business and the economy. Her work telling the human side of the mortgage crisis garnered awards from the Illinois Associated Press and the Chicago Headline Club. She's also reported for the Alaska Public Radio Network in Anchorage and for Bloomberg News in San Francisco.
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