Boeing U.S. tanker program seen $1B over budget

|About: The Boeing Company (BA)|By:, SA News Editor

The U.S. Air Force on Friday estimated that Boeing's (BA) development of the new KC-46A refueling plane will cost $1B more than initially planned, but the terms of the government's contract mean the company must cover the added costs, according to a Reuters report.

The latest estimate from the Air Force office that runs the aerial tanker program puts the total development cost at $5.85B, $250M over last year's projection; the Air Force says the government's liability is capped at the contract ceiling price of $4.9B despite the increase.

Boeing says it remains on track to meet its initial $5.1B estimate for developing the new military tanker, which will replace some of the Air Force's aging fleet of KC-135 tankers, and expects to make a profit on the overall program.