Boeing landed a $2.9 billion order from the Air Force on Monday for 18 KC-46 jets, the new refueling tankers based on its commercial 767 wide-body that completed Federal Aviation Administration certification last week.
The price includes two spare engines and five wing-refueling pod kits, the U.S. Defense Department said in a statement, and Everett, Wash.-based production is scheduled for completion by January 2022. The order marks the fourth production lot for the tanker, bringing the total number on contract to 52, the Chicago-based planemaker said.
“This is another big milestone for the team and we look forward to delivering this next-generation, multi-role tanker for years to come,” said Mike Gibbons, Boeing’s program manager for the aircraft. The company plans to build 179 of the tankers to replace the Air Force’s existing fleet of KC-135s, which make up the core of the service’s mid-air refueling capability and have been flown for more than 60 years.
Boeing, which won the contract to design and develop the next-generation tanker during former President Barack Obama’s first term, expects to being deliveries later this year. The final stages of KC-46 development forced the planemaker to take a $307 million charge in the three months through June, for tweaks to resolve issues identified during testing and certification.
“While there is still a lot of work ahead of us, we now have a very clear line of sight on what is needed to deliver these highly mission-capable aircraft,” Chief Executive Officer Dennis Muilenburg told investors in late July. “We remain confident in the long-term value of this franchise, a program that is going to have a production run measured in hundreds of airplanes and decades of follow-on support and training.”
Boeing has climbed 16 percent this year to $341.86, more than twice the gains of the broader S&P 500, as President Trump and congressional Republicans ramped up investments in the U.S. military. A two-year agreement ratified by lawmakers in March raised the cap for defense spending to $700 billion for fiscal 2018, which ends Sept. 30, and to $716 billion for 2019.
Late last month, Boeing won an $805 million contract to develop the first unmanned plane for Navy aircraft carriers, a tanker drone that can refuel fighter jets in mid-air.
The initial agreement covers development of four aircraft, which are expected to be complete in August 2024, the Defense Department said. The Chicago-based planemaker, which intends to do the work in St. Louis, was one of three companies that submitted bids for the project; its rivals were General Atomics and Lockheed Martin.
The Navy wants the Stingray drone not only to stretch the combat range of fighters from Boeing’s own F/A Super Hornet to rival Lockheed Martin’s F-35 but also to enable carriers to launch them farther away from targets. The service envisions the unmanned aircraft as a crucial component of its force, supporting missions that would have been impossible otherwise.
