The Air Force finally takes ownership of its first Boeing tanker – with serious misgivings

The U.S. Air Force on Thursday finally accepted and took ownership from Boeing of its first KC-46A air-to-air refueling tanker, though it pointed to flaws in the aircraft’s refueling systems that must be fixed.

Rather than celebrate the tanker milestone – which has been such a long time coming – the Air Force issued a short statement critical of the remaining shortfalls in the tanker’s capability. And actual delivery of the jet to McConnell Air Force Base in Wichita, Kansas, is weeks away.

Air Force officials are particularly dissatisfied with problems that have surfaced during flight tests of the new camera system Boeing has installed for operating the tanker’s refueling boom. With this new “remote vision system,” designed to work even in total darkness, the boom operator sits at a terminal behind the cockpit and guides the boom toward a jet approaching to accept fuel by watching it on a computer screen.

During flight tests, operators have had difficulty seeing the approaching jet with sufficient precision in certain lighting conditions — when the sun is low and glare reflects off the receiving aircraft, and also when the sun is behind the tanker and casts deep shadows on the receiver.

“We have identified, and Boeing has agreed to fix at its expense, deficiencies discovered in developmental testing of the remote vision system,” the Air Force said, adding that it “has mechanisms in place to ensure Boeing meets its contractual obligations while we continue with initial operational testing and evaluation.”

Capt. Hope Cronin, USAF spokeswoman, said the Air Force is withholding up to $28 million from the final payment on each aircraft until Boeing makes the necessary fixes.

She said that in recent months the Air Force and Boeing have worked closely on five major KC-46 system deficiencies and in November downgraded two of those to a less serious status.

The deficiencies included a problem with aircraft refueling using the hose from the center fuselage, which has occasionally disconnected during the process.

Cronin said “the toughest challenges” were the remote vision system and the boom actuators, which extend the refueling boom.

“Each required significant engineering work,” she said.

A joint Air Force-Boeing team developed fixes “that fully meet mission requirements” but involved “operational workarounds.” Cronin said Boeing agreed to make further improvements to the remote vision system so that it will operate properly without the workarounds.

“The Air Force will update the boom to meet more stringent requirements,” Cronin said. “Corrective actions (to fix the flawed systems) are in work and are expected to take approximately 3-4 years to complete.”

The Air Force will nevertheless continue to take delivery of the planes in the meantime, as it has determined the remaining deficiencies “do not prevent the tanker from carrying out its primary mission,” she added.

In the past six months, Boeing has twice taken multimillion-dollar write-offs for the tanker program, bringing the budget overrun to date to $3.6 billion, all of which has to be covered by the manufacturer.

According to a person familiar with the plans, Boeing and the Air Force will hold formal delivery events in the coming weeks at both Everett, where the tanker is built, and at McConnell AFB. The Air Force said this will be no earlier than late January.

Boeing issued a much more positive news release Thursday, but one that lacked a single supportive quote from any Air Force official.

Boeing Chairman and CEO Dennis Muilenburg declared it an “exciting and historic day for the Air Force and Boeing.”

And Leanne Caret, head of Boeing’s Defense and Space division, thanked “the men and women of the Air Force and across the Boeing tanker team who made this happen.”

Last May, contradicting open pessimism at the Defense Department about the tanker timetable, Caret confidently predicted that Boeing would deliver 18 tankers to the Air Force by the end of 2018. “We are on the cusp of delivery,” Caret said then.

But delays to the first delivery mounted, even as Boeing continued building planes. Some 40 tankers are either in advanced stages of production in Everett or are parked at Boeing Field. About 4,000 Boeing employees in the state work on the tanker program.

Boeing said the first four KC-46 aircraft, destined to go to McConnell to begin operational testing, are all “ready for delivery,” as are four more that will go to Oklahoma’s Altus Air Force Base for aircrew and maintenance training “beginning as early as next month.”

The Air Force has been waiting 17 years for its new tankers.

A 2001 sole-source leasing deal for 100 Boeing 767 tankers was canceled after heavy criticism in Congress, including allegations of corruption in the procurement process that led to the jailing of Boeing’s then-chief financial officer, Mike Sears.

Seven years ago, Boeing secured the replacement KC-46 contract after a long saga of protests that wrested it away from Airbus, which had earlier been awarded the contract.

The government estimates it will spend $41 billion on development of the KC-46 and the purchase of a total of 179 tankers. Of that, approximately $30 billion will go to Boeing, according to the company’s annual report.

However, the contract has a fixed price, with costs for this development stage capped at $4.9 billion, a figure long surpassed. All further development costs beyond that have been coming out of Boeing’s pocket.

Boeing is scrambling to fix the remaining issues and keep the cost overruns from climbing toward $4 billion.

A person familiar with the plans said Boeing hopes to deliver at least a dozen tankers in the first quarter of the year.