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AEW&C problems cost Boeing dearly

By Peter La Franchi in Canberra

Damages to be paid to customers Australia and Turkey to compensate for late delivery of 737 airborne early warning and control (AEW&C) aircraft form part of the $300-500 million in financial charges to be taken by Boeing after it revealed an 18-month delay in the programme. The delay, caused by hardware and software integration problems, was forced after Boeing completed analysis of initial flight tests of the 737 AEW&C equipped with its Northrop Grumman Mesa electronically scanned radar.

The tests in late May revealed the estimate of time required to develop the 737 AEW&C was “flawed”, says Boeing. The company is replanning the programme, but says delivery of all six of launch customer Australia’s Wedgetail aircraft will now be completed by late 2008, instead of beginning this year as originally planned. Discussions continue with Turkey on a schedule for delivery of its four Peace Eagle aircraft, Boeing says.

Australian Department of Defence sources say the problems being experienced include lower than required radar performance, radar signal processing anomalies, software anomalies in the airborne mission system and ground support and training systems, and issues with overall system integration. “Technical challenges at the subsystem level and integration level were revealed by detailed analysis of recent flight-test data,” says Boeing Integrated Defense Systems president and chief executive Jim Albaugh.

Albaugh says schedule estimates based on development experience with the 707 and 767 airborne warning and control system proved flawed. “This is a new radar, and new platform and a commercial venture,” he says, citing hardware and software challenges with the radar, new command and control system and communications suite.

Australian defence minister Brendan Nelson says the problems were first brought to his attention in May, and were the focus of top-level discussions with Boeing in June. “Until recently, Boeing was advising that this project was running well,” he says, adding that the government has made clear it is “very disappointed the project will not be delivered on schedule”. The exact delay will be determined over the next two months, he says.

Wedgetail was originally scheduled to be released for service in December 2007, but the 18-month delay will push that to mid-2009. The project is capped at A$3.5 billion ($2.56 billion), with A$2.5 billion expected to have been spent by the end of June. Including a $100 million charge taken in 2002, mainly to cover radar problems, Boeing has written off up to $600 million against two fixed-price contracts valued at around $4 billion.

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