Air Force Awards $2.1 Billion Contract for Next Batch of KC-46A Tankers

Published January 30, 2017

The Air Force has awarded Boeing a $2.1 billion contract for the next batch of KC-46A refueling tankers, known as the Pegasus.

The service on Friday announced a contract for 15 KC-46A aircraft, "spare engines and wing air refueling pod kits," according to a statement from Boeing.

"This award is great news for the joint Boeing-Air Force team and reinforces the need for this highly efficient and capable tanker aircraft," Mike Gibbons, Boeing KC-46A tanker vice president and program manager, said in the statement.

"Our Boeing industry team is hard at work building and testing KC-46 aircraft, and we look forward to first delivery."

The announcement comes days after Boeing, the world's largest aerospace company, said the tanker program added a $312 million charge in the last quarter of 2016, bringing the total program cost overrun to $2.3 billion.

"We are disappointed with the tanker charge we took in the fourth quarter, but it's well understood and defined," CEO Dennis Muilenburg told reporters during a conference last week.

"I will say that the nature of the risk on the program is clearly changing as expected, and we moved now from the development program into the initial production program," he said.

The Air Force awarded Boeing a fixed-price $4.9 billion contract in 2011. The company is responsible for any cost overruns.

In August, the service awarded Boeing a $2.8 billion initial production contract for 19 KC-46 refueling tankers, as well as spare parts.

The latest contract would bring the production total to 34 of the modified 767-based aircraft.

The service announced earlier this month it hopes to move 24 KC-46A tankers to Joint Base McGuire-Dix-Lakehurst, New Jersey, and Travis Air Force Base, California, to replace current tanker fleets.

Yet without a solid timeline for when the first KC-46 may be delivered, the Pegasus won't even begin to join the Air Force's fleet until at least 2019.

Boeing plans to build 179 tankers for the service at its Everett, Washington, facility.

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