Tuesday, September 19, 2017

Boeing ‘Unlikely’ to Deliver First Tanker in 2017: Further delay to tanker program would only have a modest impact on Boeing’s closely-watched cash flow



The Wall Street Journal
By Doug Cameron
Updated Sept. 19, 2017 3:42 p.m. ET


Boeing Co. is unlikely to meet its target of delivering the first of a new fleet of aerial refueling tanker jets by the end of the year, according to a person familiar with the military program.

A further delay to the tanker program would dent Boeing’s recent turnaround in executing new programs on time though only have a modest impact on its closely-watched cash flow.

The KC-46A Pegasus tanker is a heavily modified version of the Boeing 767 passenger jet that’s been hit by design and production problems, triggering more than $1.5 billion in charges.

“Given where the program is today, it appears unlikely first delivery will take place in 2017,” said the person familiar with the company’s progress.

The U.S. Air Force had previously said it didn’t expect Boeing to provide a combat-ready KC-46A tanker to refuel fighter jets and transport planes until next year, even though company executives continued to target a delivery this year.

Gen. Carlton Everhart, head of Air Mobility Command, said at an industry conference on Tuesday that the first “war ready” aircraft is expected in the spring, part of an initial batch of 18 due to enter service by June.

“The Boeing timeline of December does not appear likely from an AMC perspective,” added an Air Force spokesman.

While Boeing has resolved production issues that dogged some of its recent commercial jetliners, delivering the first 737 Max ahead of schedule, some military programs continue to cause issues. Aside from the tanker, it’s also pushed back the first flight of its new manned space capsule and taken a charge on that program.

Senior Boeing executives at the company’s investor day on Tuesday didn’t address the timing of the initial tanker delivery, but said the first 18 would arrive by June, according to people at the event, which wasn’t webcast.

Original article can be found here ➤ https://www.wsj.com

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