NATIONAL HARBOR, Md. (Reuters) - Boeing (NYSE:BA) Co's first fully equipped KC-46A refueling plane is scheduled to complete its first flight on Sept. 25, the Air Force general in charge of tanker programs said Tuesday.
Brigadier General Duke Richardson, executive officer for Air Force tanker programs, said the tanker program was doing well overall, despite earlier schedule delays.
"We are definitely struggling with schedule. We are not struggling with performance," he told the annual Air Force Association conference.
Richardson said it was remarkable that the first flight was still set to take place within the target range first set in April, despite two technical issues that arose afterwards. He said Boeing had devoted significant resources to ensuring the program stayed on track.
Sources familiar with the program had predicted that a chemical mix-up involving the plane's fuel tank could delay the first flight by up to a month.
Richardson said he was "cautiously confident" that Boeing would meet its commitment to deliver 18 tankers to the Air Force by August 2017, despite a series of issues that have eroded any margin in the program's schedule.
He said the program was working through testing required for a key milestone review to be completed around April that would pave the way for an initial production contract for seven jets.
A second deal for 12 planes should follow shortly thereafter, but could get held up if Congress fails to pass a budget for fiscal 2016, which begins Oct. 1, and imposes a resolution limiting funding to fiscal 2015 levels, Richardson said.
That could cause "a very large problem" for the program, given the terms of the Air Force's contract with Boeing, which set stringent requirements for funding stability.
Air Force officials have repeatedly said they cannot afford to breach the fixed-price Boeing contract, since any renegotiation of the deal would likely result in far less positive terms for the government.
Boeing in July announced a second charge on the tanker program, bringing its total pre-tax charges to nearly $1.3 billion.