Boeing reports KC-46A financial loss, rejects wider concerns

[Lyneham Lad]

Cue an outbreak of schadenfreude at Airbus Military...
Article on Flight Global (http://www.flightglobal.com/news/articles/boeing-reports-kc-46a-loss-rejects-wider-concerns-401948/)

extract:-
Boeing blames a wiring redesign on the KC-46A programme for a $272 million forward loss announced on 24 July in a second quarter earnings filing, but dismisses a government estimate predicting more delays and up to another $515 in cost overruns.

[hoodie]

...... but dismisses a government estimate predicting more delays and up to another $515 in cost overruns.

$515 ain't bad. :8

[walter kennedy]

It's a drop in the bucket compared to the problems Boeing may have if the recent disasters with 777s turn out to be the batteries.

[diginagain]

I do like a nice conspiracy-theory.

[ShotOne]

"...turns out to be the batteries??" ..eh?


What this story really highlights is that while selling mil tankers used to be a massive deal for plane makers (the KC 135 being what launched Boeing into the jet-age), this is no longer the case. Indeed with the KC 46, one gets the impression that refurbing a few out-of-production airliners is an inconvenience they'd rather do without.

[vascodegama]

In that case why were Boeing so keen to overturn the previous result of the KCX competition which favoured the Airbus solution?

[glad rag]

Some, much more wiser than myself, might say that it, possibly, demonstrates the modern, inherent contempt the airframer community in the US has for it's government customers...:8

[Rosevidney1]

Was there ever a type to enter service that didn't 'enjoy' an overspend?

[LowObservable]

RV...

http://www.atfx.org/photos/gripenb.jpg.pagespeed.ce.gWvww7jtol.jpg

[melmothtw]

Some, much more wiser than myself, might say that it, possibly, demonstrates the modern, inherent contempt the airframer community in the US has for it's government customers...

How do you work that out glad rag? Under the terms of the EMD contract (the only contract so far awarded for KC-X), Boeing has agreed to share the first billion of any overspend with the US government, and after that it is all on Boeing's head. I'm not sure how Boeing agreeing to take on the burden of any financial losses itself equates to "contempt" for its government customer.

What this story really highlights is that while selling mil tankers used to be a massive deal for plane makers (the KC 135 being what launched Boeing into the jet-age), this is no longer the case. Indeed with the KC 46, one gets the impression that refurbing a few out-of-production airliners is an inconvenience they'd rather do without.

Again, tosh. To date, only the $4 billion EMD contract has been awarded (for 4 development and 18 combat ready tankers). With options, KC-X will encompass 179 tankers and will be worth some $30 billion out to 2027. And then there are the potential follow-on KC-Y and KC-Z contracts, which could be worth upwards of $100 billion. Hardly small change, especially for a company that might lose its two fighter production lines in the next decade.

[sandiego89]

It's a drop in the bucket compared to the problems Boeing may have if the recent disasters with 777s turn out to be the batteries

Wow, where did that come from????- I am quite confident that batteries have absolutely nothing to do with the 777 loss over Ukriane, zero at San Francsico and unlikely with the loss over the Indian ocean. Primary reasons LIKELY to be shootdown in Ukraine, extreemly poor airmanship in San Fran (I'm obvioulsy not a lawyer for Asiana) and human factors in the earlier Malaysian loss. We have threads ad nasuem on all three for your reading enjoyment. 2 other hull losses were due to frozen fuel lines and a cockpit fire likely due to an electrical short. How do you get batteries out of that?

Indeed with the KC 46, one gets the impression that refurbing a few out-of-production airliners is an inconvenience they'd rather do without.

Disagree, I'm with melmothtw; they wanted the contract badly. You never make money on the first phase of the bid, as you may have to eat some developmnent costs, surprises, and you made the bid to win, not to make a huge profit- perhaps even low balled it. Usually you even get paid for overruns, especially if you can tie it to government changes or "unforseen" problems. You make the real money on subsequent orders, production and upgrades- and even more when the politicians order planes the armed service didn't ask for.

[Haraka]

You make the real money on subsequent orders, production and upgrades- and even more when the politicians order planes the armed service didn't ask for

and of course "spares and support"

[melmothtw]

You make the real
money on subsequent orders, production and upgrades- and even more when the
politicians order planes the armed service didn't ask for


and of course "spares and support"


Very true, which is precisely why the DoD has fired a shot across Lockheed's bow with the threat of opening up F-35 through-life support to tender.

That's how to hit a company in the pocket if they don't perform.

[glad rag]

So it finally sunk home <lightbulb>

[ShotOne]

"Was there ever a type to enter service that didnt enjoy an overspend"?? Well, yes; pretty much every civil airliner flying! And if there was, it wasnt funded by the customer. Perhaps its time to look at what they're doing that mil/civil service procurement types seem unable or unwilling to achieve?

[vascodegama]

787, A380 ?

[ShotOne]

Nope! Sure, they had their very well-publicised problems but none of their customers ended up out of pocket

[Bevo]

Nope! Sure, they had their very well-publicised problems but none of their customers ended up out of pocket

Number of airlines as a market for new aircraft = over 100
Number of customers for a new tanker = approximately 4

Number of major airframe manufacturers willing to gamble over $5 billion on an aircraft with no confirmed customers = 0

Ask Northrop how its F-20 fighter program turned out.

[BEagle]

Perhaps the main issue with the KC-46A programme is that ol' Bubba Boeing sitting there in the old Red Barn is just trying too hard?

The KC-767I took ages to develop, surely it wouldn't have been difficult to develop an improved version for the USAF? But no, too many bells, whistles and the 787 flight deck have ensured that the Frankentanker will be some time yet in gestation.

Whereas despite the fact that its mission system still has what one might politely term 'issues' (Hecha en España = No funciona!), the A330MRTT family is selling pretty well......:\

[ShotOne]

They were certainly trying too hard back in, what, 2004 when they won, then lost the contract in a blaze of corruption allegations -didn't some procurement guy serve jail time? This would have meant a great deal more to Boeing back then with 767 production in full swing than it does now in the type's twilight years.

Of course they were sore, I agree, to lose (briefly) the contract; no company wants to lose out, certainly not to a bunch of Frenchies. But this is tempered by the need to retain a production line which was drawing to a natural close.