Showing posts with label KC-46. Show all posts
Showing posts with label KC-46. Show all posts

Friday 27 October 2023

Boeing struggles to steer defence unit in another year of losses.....


Boeing's defence business is proving harder to turn around than executives initially predicted, with supplier errors and high manufacturing costs contributing to $1.7 billion in losses this year on programs like the next Air Force One and NASA's Starliner capsule, reports Valerie Insinna from Reuters.


Despite absorbing $4.4 billion in losses in 2022 – which executives said would lower the risk of future cost overruns – the unit has seen little improvement this year.  Excluding last year, losses on Boeing's defence programs in 2023 exceed those from all years since 2014, according to a Reuters review of Boeing’s regulatory filings.

Boeing is unique among its defence contractor peers, as companies like Lockheed Martin, General Dynamics and RTX are seeing higher revenues due to demand from the war in Ukraine.  Unlike those companies, however, Boeing is locked into a handful of contracts that force the planemaker to take a loss when technology development goes over budget. The defence unit's losses this year include $933 million in charges in the third quarter, mostly comprising a $ 482 million loss in building two Air Force One planes and a $315 million charge on an unidentified satellite program that had not previously lost money.

Boeing's executives said they are putting in place new training and deploying resources to suppliers to ensure the unit moves from negative margins to high-single-digit margins by 2025-2026, when its most troubled programs are slated to be past flight testing and on more stable footing.  

“We're driving lean manufacturing, program management rigour and cost productivity consistently across the division,” Chief Financial Officer Brian West said during a Wednesday earnings call. Boeing declined to comment beyond executives' comments on the call.

Byron Callan, a defence analyst with Capital Alpha Partners, said Boeing's 2025-2026 timeline to get to positive margins is feasible but questioned why it took the company years to institute programs to improve execution. "Someone really dropped the ball on all of this," he said.

Boeing shares have lost 6% this year, compared with the broad-market S&P 500's 9% gain.

Fixed Price Contracts

Analysts also say there is little Boeing can do to offset the financial burden of its long list of fixed-price development contracts with customers like the U.S. Defense Department and NASA, which lock the planemaker into paying all costs above an agreed-upon threshold.

These deals, which make up 15% of Boeing's defence program revenue, were reached before Boeing's commercial aeroplane business was decimated by the MAX crisis and before the pandemic and high inflation caused costs to spike for materials and labour. Other headaches include a recent manufacturing snafu where a supplier improperly coated KC-46 fuel tanks.

The losses suggest Boeing lacks a true understanding of costs as each new charge “is an upward revision to cost expectations, versus only three months prior,” said Seth Seifman of JP Morgan, in a Wednesday note to investors. “Even after excluding charges, BDS (Boeing Defense Space and Security) still did not generate a real profit.”

Boeing has been adamant it won't enter into new fixed-price contracts for the development stage of weapons because the unpredictability associated with designing and testing a new product often brings unforeseen costs.

However, the company's current fixed-price development efforts, which include the U.S. Air Force's KC-46 refuelling tanker and T-7 training jet, new Air Force One planes, the Navy's MQ-25 tanker drone, and NASA's Starliner have all continued to run over budget this year.

The latest charge for Air Force One brought total losses to $2.4 billion on a $3.9 billion contract to develop two planes. The program’s current schedule calls for the first jet to be delivered by September 2027.  West also noted $136 million in additional losses taken during the quarter, including a $ 71 million charge for the MQ-25 program.

While KC-46 appears to be stabilizing and T-7 will eventually make a profit, there's “not much you can do” for costly, low-volume programs like Air Force One or MQ-25, said Richard Aboulafia of AeroDynamic Advisory.

A better bet and one Boeing's defence segment is aggressively pursuing, is inking future contracts for next-generation fighter jets and cutting-edge drones.  “It's a target-rich environment,” Aboulafia said.

Reporting by Valerie Insinna;

Friday 2 September 2022

Israel to buy four KC-46 tankers from Boeing

A KC-46 in action  Photo Boeing


Israel will buy four Boeing KC-46A refuelling tankers for its air force, the Israeli government and the U.S. defence contractor said on Thursday, a $927 million deal with delivery of the first planes expected in 2025, writes Dan Williams from Reuters. 

The tankers would replace the decades-old, repurposed Boeing 707s that Israel currently uses for mid-air refuelling and may help it signal seriousness about the possibility of a long-threatened strike against Iran's nuclear facilities and aid Israel's growing agression to neighbouring states. 

Thanking the Pentagon for what he described as its expedited approval of the KC-46A purchase, Israeli Defence Minister Benny Gantz said the tankers would "enable the IDF (Israel Defence Forces) to face security challenges near and far".
A KC-46 in action  Photo Boeing

Writing by Dan Williams - Reuters. 





Monday 16 August 2021

Boeing KC-46A Tanker for Japan Completes First Refueling Flight

First KC-46A for a non-US customer gives and receives fuel with another KC-46A
Boeing will deliver tanker to Japan Air Self-Defense Force this year

The first Boeing KC-46A tanker built for the Japan Air Self-Defense Force (JASDF) recently refuelled another KC-46A aircraft in the skies over Washington state. The Japan-bound tanker also successfully received fuel in return.

“Refueling with the first Japan KC-46A is an important milestone for the Japan Air Self-Defense Force,” said Jamie Burgess, KC-46 program manager. “KC-46A is the world’s most advanced air refuelling aircraft and has already transferred more than 42 million gallons of fuel to other aircraft globally through its boom and drogue systems.”

Japan is the KC-46 program’s first non-U.S. customer and is scheduled to receive its first aircraft this year.

Sunday 17 January 2021

12 more KC-46A tankers for U.S. Air Force


Last week the U.S. Air Force pushed forward an order for 12 KC-46A tanker aircraft from Boeing. With this sixth production lot, Boeing is now on contract for 79 KC-46A tankers. 

The company delivered the first KC-46A to the Air Force in January 2019. Since then, Boeing has delivered 42 tankers to four different bases. The next-generation KC-46 brings new capabilities and operational flexibility to the U.S. Air Force and international customers.

Monday 2 November 2020

Japan to get two more KC-46 tankers.


The U.S. Air Force has exercised the option for the Japan Air Self-Defense Force’s (JASDF) third and fourth Boeing KC-46 tanker through the Foreign Military Sale (FMS) process.

 “Japan’s new tankers will play an invaluable role in the security alliance between our two countries,” said Col. Jason Lindsey, U.S. Air Force KC-46 System program manager.

Boeing’s KC-46 will be a force multiplier in the U.S.-Japanese defence alliance. It can refuel U.S., allied and coalition military aircraft compatible with international aerial refuelling procedures, any time, on any mission, and can carry passengers, cargo and patients whenever and wherever needed.

Sunday 19 July 2020

US KC-46 Completes Its First Aeromedical Evacuation Mission

KC-46A Pegasus Completes It's First Aeromedical Evacuation Mission
U.S. Air Force photo by Airman 1st Class Nilsa Garcia

Airmen from the 931st Air Refueling Wing and 22nd Aircraft Maintenance Squadron participated in a Total Force mission to test capabilities of the KC-46A Pegasus during its first aeromedical evacuation on July 10, 2020.



Over the course of six flights and 17 hours, the mission, which originated at Joint Base Andrews, Maryland, transited five patients and two attendees to Naval Station Norfolk, Virginia; Patrick AFB, Florida; and Travis AFB, California. The mission was evaluated by the Air Force Operational Test and Evaluation Center.

“I don’t think most people realize the amount of training and dedication the team has when they come out and do a mission like this,” said Maj. Michael Murphy, 905th Air Refueling Squadron pilot. “Everyone really performed well and at a high level.”

Tuesday 17 September 2019

Boeing begins assembling first KC-46A tanker for Japan

The Boeing KC-46 team on Friday began assembling Japan’s first next-generation tanker, loading a 82.4-foot (25 metres) long wing spar in the company’s 767 production facility.

“This is an exciting day for the program and we look forward to building and delivering these multi-role tankers to the Japan Air Self-Defense Force (JASDF),” said Jamie Burgess, Boeing vice president and KC-46 program manager. “From the enhanced flight deck to the modernized boom, this tanker will provide unmatched capabilities for Japan.”

Boeing was awarded a Foreign Military Sale contract for one KC-46A aircraft and logistics services in December 2017. The U.S. Air Force exercised an option for Japan’s second aircraft in December 2018.