Friday, May 24, 2024

Boeing Reports Massive Losses, Major Defence Projects Lagging

By Staff Correspondent

Boeing faced a loss to the tune of $3.3 Billion in the third quarter of 2022. The (approximately) $1.2 Billion charge on the KC-46A Pegasus and other major defence programs have been seen as contributing factors. The company believes that atleast $2.8 Billion in quarterly losses resulted from higher manufacturing and supply chain costs along with technical challenges associated with the KC-46 Pegasus, VC-25B Air Force One, MQ-25 Stingray and T-7A Red Hawk programs, further coupled with NASA’s Commercial Crew program. Reports indicate that performance issues in other programs have also affected the company’s quarterly results.

It has been reported that Boeing’s Chief Financial Officer Brian West spoke to investors in an earnings call on Wednesday, telling them that charges on the Air Force One and KC-46 programs accounted for nearly $2 billion in losses. West had further highlighted that the VC-25B came with a $766 million charge. Officials however reassured investors that the company is working to stabilise the two underperforming programs and deliver them to the United States Air Force (USAF). 

Dave Calhoun, Boeing’s president and chief executive, reportedly told investors on the call, “Our objective is to make sure these [KC-46] tankers are doing the job for our military customer. That is it, that’s all we’re focused on, and they are doing that.” He highlighted the positive developments made by the KC-46 in mission expansion. Earlier this year, USAF had cleared the KC-46 Pegasus to conduct global refuelling missions on all aircraft barring the A-10 Thunderbolt II.

However, the KC-46 has faced significant challenges, particularly concerning its refuelling vision system. These longstanding issues have amounted to billions of dollars in cost overruns. USAF revealed earlier this month that the release of the KC-46′s redesigned vision system, dubbed the RVS 2.0, would see a 19-month delay owing to supply chain issues. The RSV 2.0 is likely to be operational by October 2025 now. These KC-46 charges bring its total to around $6.8 Billion.

These developments show a steep decline from how the company performed in the same quarter last year when Boeing lost $132 million. However, the company’s defence sector reported a profit of $436 million during that time. Boeing is now facing approximately $4.4 billion in losses this year, and the company’s defence sector has already lost about $3.7 billion during the first nine months of this year.

Most Popular

Subscribe to our newsletter

To receive the latest news on Indian aviation and defence.