KC-46

Credit: U.S. Air Force

Hefty cost overruns continue for Boeing’s Defense and Space business as the company has announced another $1.7 billion in charges for five of its troubled programs.

The company on Jan. 23 announced its preliminary earnings for the fourth quarter of 2024, with total revenues of $5.4 billion and an operating margin of 41.9%. The company will report its full earnings on Jan. 28, but previewed the $1.7 billion in losses on the KC-46A, T-7A, Commercial Crew, VC-25B and MQ-25.

The latest charges bring the total reach-ahead losses on the company’s fixed-price defense and space programs to $18.1 billion since 2014.

The KC-46 tanker program reported a pretax charge of $800 million, reflected in higher estimated manufacturing costs, including the impacts of the International Association of Machinists strike and subsequent agreement. The company delivered 10 tankers in all of 2024, and none in the fourth quarter. The latest charge means the company has lost $8.928 billion on the program.

Boeing is also reporting a pretax charge of $500 million on the T-7A, “primarily driven by higher estimated costs on production lots in 2026 and beyond.” This brings the total charges on the program to $3.194 billion.

The U.S. Air Force announced on Jan. 15 that it would push back production of the T-7A following extended delays throughout the program. But the service is buying four production-representative test vehicles in the meantime to keep the testing program at pace ahead of an expected initial operational capability in 2027.

Brian Everstine

Brian Everstine is the Pentagon Editor for Aviation Week, based in Washington, D.C. Before joining Aviation Week in August 2021, he covered the Pentagon for Air Force Magazine. Brian began covering defense aviation in 2011 as a reporter for Military Times.