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Boeing defense unit reports $139M loss across three major programs

Boeing’s defense unit reported $139 million in total losses on three of its key fixed-price development programs in the last quarter of 2023, the company reported Wednesday.

The firm confirmed to Defense News on Thursday that the losses were on the KC-46A Pegasus refueling tanker, the T-7A Red Hawk jet trainer and the MQ-25 Stingray refueling drone. Boeing declined to say how much each program lost, noting the amounts were small enough that the company did not have to publicly report them.

In a year-end report, Boeing said its defense unit racked up nearly $1.6 billion in charges on its five major fixed-price programs throughout 2023.

The company’s work on the next pair of Air Force One presidential aircraft, which falls under the VC-25B program, incurred the highest of those charges at $482 million.

The KC-46A saw the next-highest charges at $309 million.

And the Commercial Crew, T-7A and MQ-25 Stingray incurred charges of $288 million, $275 million and $231 million, respectively, throughout 2023. Under the Commercial Crew effort, Boeing makes space capsules for NASA.

While those losses were steep, Boeing had somewhat stemmed the bleeding from 2022, when those five programs incurred charges totaling more than $4.4 billion.

Boeing’s defense sector in recent years has struggled with cost overruns, quality problems and delays on key programs that led to steep losses for the company. Overall, Boeing’s defense business lost $1.8 billion in all of 2023, though that was less than the $3.5 billion in losses from 2022.

Brian West, Boeing’s chief financial officer, said the company expects its defense sector to improve as its fixed-price programs mature and operate under tighter discipline.

Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.