Boeing wins $2.1 billion Pentagon contract for 15 KC-46 refueling aircraft

27 January 2017

Boeing Co (BA.N) has been awarded a $2.1 billion U.S. defense contract for 15 KC-46 aerial refueling aircraft, the Pentagon said on Friday.

The new agreement is in addition to the initial $4.2 billion contract awarded by the Air Force to develop and test the aircraft, and an earlier $2.8 billion award for 19 planes.

Boeing expects to build a substantial business from the tanker, which is based on its twin-aisle 767 commercial jet. Boeing plans to deliver 179 tankers to the U.S. Air Force and expects to sell about 400 in total worldwide.

The fixed-cost contract has incurred about $2.4 billion in cost over runs, including a $201 million after-tax charge Boeing announced on Wednesday. Boeing said it expects to deliver the first tankers to the Air Force in late 2017.

On Wednesday, Boeing posted fourth quarter profits and operating cash that beat analysts' estimates and said it expected to generate a record $10.75 billion in operating cash this year.