Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Cost Overruns Mount As Boeing Tries To Meet Air Force Deadline On KC-46 Tanker Program

Ralph Radford
/
AP Photo

Boeing says it’s doing all it can to meet a big deadline in August of next year, when the company is supposed to deliver the first 18 KC-46 aerial refueling tankers to the Air Force, but cost overruns on the program have been mounting.

Boeing’s first-quarter earnings dropped partly because of higher costs on the tanker program. The contract with the Air Force has a fixed price, so Boeing has to bear the cost overruns, now totaling almost $1 billion after taxes.

Morningstar analyst Chris Higgins said it’s been a troubled program and he wasn’t surprised the company had to record another charge.

"They’re rushing to hit the timeline that’s in front of them right now, and so what they’re doing is they are conducting development on the aircraft, and production at the same time, and design changes," Higgins said.

The company said the additional costs in the first quarter had to do with incorporating engineering changes into planes that have already been built or are being built. But Boeing said the program has hit a number of milestones, including successfully refueling some military aircraft in flight. 

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.