The saga of the new U.S. Air Force tanker is now about 15 years old and the service has yet to receive one new plane. It took roughly 10Â years for Boeing Co. (NYSE: BA) to win the contract after a corruption scandal involving Boeing executives torpedoed the initial award to the company in 2001. It took another seven years to award the contract to EADS, the predecessor to Airbus, but that award too was invalidated following a protest by Boeing.
The final round began in 2009 and Boeing won the $35 billion contract in 2011. The company missed an important program milestone earlier this year when the new tanker, called the KC-46A, failed to transfer fuel to a C-17 cargo plane. That failure forced a delay in the delivery of the first four planes, originally scheduled for May, until January of next year.
According to a report at Defense News, the new tanker successfully refueled a C-17 on Tuesday of this week. U.S. Secretary of Defense Deborah Lee James told the publication:
I’m encouraged by these results. The KC-46 program continues to move forward, making important progress that will get this vital capability into the hands of the warfighter.
After the KC-46A flunked the refueling test with the C-17, Boeing had hoped to apply a software fix to the problem, but later decided to install a hardware solution. The fix apparently worked.
In order to clear the refueling milestone, the KC-46A must be able to pass fuel to Air Force F-16 fighter jets, Navy F/A-18 Hornets, the Marine Corps AV-8B Harrier II, the C-17 cargo plane and the A-10 Thunderbolt II, aka the Warthog. The tanker has now succeeded with the first four and the Warthog is the last remaining test.
Boeing has blown through the original award of $4.9 billion for the development phase of the new tanker program and coughed up about $1.3 billion to pay cost overruns. When the company reports second-quarter earnings later this month, we are likely to see more charges to the program.
The company’s stock closed at $130.11 on Wednesday, down about 0.5% for the day, in a 52-week range of $102.10 to $150.59.
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