ANALYSIS: Boeing tackles issues as KC-46A flight nears

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Two 767-2Cs now stand in the 40-32 bay of Boeing’s final assembly centre in Everett, Washington. Another two are located elsewhere in the sprawling complex. All four future US Air Force tankers are structurally complete, but still weeks or months away from being ready for first flight.

Three years after winning the arduous KC-X in-flight refuelling tanker contract, Boeing is now in the final, complicated stages of integrating the systems that transform a commercial 767-2C freighter into the first militarised KC-46A Pegasus.

As workers continue to struggle with the minutiae of completing a new derivative – encountering supplier bottlenecks, system breakdowns and bad seals on fuel tanks – Boeing vice-president of air force programmes Chuck Johnson avoids making bold promises.

“Is there a major thing that’s happened and we’re all trying to figure out what to do? No,” he says, rhetorically. “Are there many things that have come up in testing and manufacturing the jet? Yes, but there’s fixes.”

Boeing is on a tight timeline, with little margin for error. The $4.3 billion, fixed-price development contract signed in February 2011 requires it to deliver 18 operational KC-46As in fiscal year 2017, meaning there is less than three years to assemble test vehicles, complete the flight test programme and pass an initial operational evaluation.

Boeing is developing the KC-46A in two stages. First, pieces of various Boeing models – including the fuselage of the 767-200ER, the wings of the 767-300, the stabilisers and flightdeck of the 767-400ER and the cockpit displays of the 787 – are combined to create the 767-2C. Then, Boeing adds military hardware – a fly-by-wire refuelling boom, a remote aerial refuelling operator station, military avionics and self-protection systems – to create the KC-46A.

The first- and third-numbered prototypes will fly initially as 767-2Cs. The second and fourth-numbered test aircraft will fly first as KC-46As. As soon as the US Federal Aviation Administration grants an amended type certificate for the 767-2C, the first two aircraft will be modified as military tankers and join the air force’s flight test programme.

To stay on track, Boeing needs to get the first 767-2C in the air in the third quarter of this year, followed by first flight of the KC-46A in January 2015. Johnson says the company’s target remains the third quarter, but the timeline is not rigid.

“I would say we’ll fly when it’s time to fly,” Johnson says. “That’s a lesson learned from the 787.”

The US Government Accountability Office, which evaluates taxpayer-funded programmes for the US Congress, warned in April that the KC-46A development schedule could slide by six to 12 months. That report echoes previous alarm raised by the Pentagon's chief weapons tester, Michael Gilmore, who wrote in 2012 that the KC-46A could be delayed by eight months.

Johnson answers questions about potential delays cautiously, noting that the programme is still on track. “You’re trying to get me to say something in a crystal ball,” Johnson says, “but you’re smart people. You know things can happen. It hasn’t happened yet.”

Integrating the electric systems and flight control software are among the “bigger concerns” within the programme right now, Johnson adds.

The nature of Boeing’s contract shifts the risk of any cost overruns caused by programme delays from the air force to the supplier. Boeing won the contract by under-bidding Airbus by $2 billion, setting a target price of about $4.4 billion. The contract allows Boeing to recoup expenses up to $4.9 billion, but absorb the cost of all overruns afterwards.

As of December 2013, Boeing was within $75 million of running into the red on the development programme, and the GAO projected the company would deplete management reserves by this September. That means Boeing could be exposed to losses on the programme if any significant problems arise afterward.

“We signed a fixed-price contract. We bid aggressively. We’re at ceiling,” Johnson says. “We’ve got to deliver.”

Although the fixed-price deal carries risk, Johnson urges a long-term view of the programme. The USAF plans to buy 179 KC-46As through 2027. Boeing is also bidding for export deals in South Korea and Japan. In the long-term, Boeing plans to offer the KC-46A to emerging requirements in Poland and among a consortium of European militaries, Johnson says.