{"id":5139,"date":"2026-01-28T06:23:06","date_gmt":"2026-01-28T06:23:06","guid":{"rendered":"https:\/\/sawahsolutions.com\/range\/boeing-takes-565m-hit-on-kc-46-tanker\/"},"modified":"2026-01-28T06:23:06","modified_gmt":"2026-01-28T06:23:06","slug":"boeing-takes-565m-hit-on-kc-46-tanker","status":"publish","type":"post","link":"https:\/\/sawahsolutions.com\/range\/boeing-takes-565m-hit-on-kc-46-tanker\/","title":{"rendered":"Boeing takes $565m hit on KC-46 tanker"},"content":{"rendered":"
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Boeing lost $565 million on its Air Force KC-46 tanker program in the last quarter of 2025, according to a Thursday earnings call, pushing the company\u2019s total losses on the effort to roughly $8 billion.<\/p>\n

The loss on the Pegasus jet led to a $507 million loss for Boeing\u2019s defense and space business in the fourth quarter, and a minus-0.5 percent operating margin for the full year, according to a press release. Boeing\u2019s C-suite officials pointed to rising supply-chain costs and higher production support for the refueling aircraft\u2014mainly tied to the 767 aircraft that is the basis of the KC-46s design\u2014as the cause of the financial strain. But executives remained optimistic about future orders.\u00a0<\/p>\n

\u201cAs we came through our quarterly process, we revised cost estimates for elements, including the production support and supply chain,\u201d Boeing CEO Kelly Ortburg said. \u201cWhile it’s disappointing to recognize another impact on this program, we are seeing encouraging operational performance trends, which, if sustained, should enable us to meet our customer delivery commitment and set us up well for the next tanker order beyond the current program of record.\u201d<\/p>\n

Despite repeated accidents, financial hurdles, and delivery problems in recent years, the Air Force is still planning to buy 75 more KC-46s. Ortburg acknowledged those past headaches, but said the company now understands the full scope of the expenses. Negotiations on the next contracts begin in the fall.<\/p>\n

\u201cThis has been a bad contract for the last decade, this existing contract,\u201d Ortburg said. \u201cAnd as we enter into a new opportunity where we get to reprice, we want to make sure that we \u2026 underwrite that contract, to ensure it’s a fair contract and we can make money on that.\u201d<\/p>\n

Boeing Chief Financial Officer Jay Malave said on the call that increasing production and engineering support at the company\u2019s Everett, Washington, facilities led to a decrease of average factory rework levels \u201cby 20% in the fourth quarter.\u201d While those investments are paying off, he said, the increases will have to be sustained for a longer period of time to stabilize fixed-price-development programs like the KC-46.<\/p>\n

\u201cAs the tanker charge this quarter highlights, there remains risks on these programs, even if the envelope of risk has been significantly reduced over the last year,\u201d Malave said.<\/p>\n

With the improvements, company executives said they plan to deliver more of the tankers in 2026.<\/p>\n

\u201cIt is taking us more resources to make the deliveries,\u201d Ortburg said. \u201cWe delivered 14 tankers in 2025 and we are planning to deliver 19 in 2026, and we made the conscious decision that we needed to keep resources at a higher level to assure that we make those deliveries on time.\u201d\n\n<\/svg><\/p>\n<\/div>\n