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.