August 12, 2016 / 9:50 PM / 2 years ago

Boeing's KC-46 program approved for production: U.S. Air Force

WASHINGTON (Reuters) - Boeing Co’s KC-46A refueling plane has been approved for production, with work underway for the first two low-rate initial production lots to be awarded in the next 30 days, the U.S. Air Force said on Friday.

The Boeing logo is seen at their headquarters in Chicago, in this April 24, 2013 file photo. REUTERS/Jim Young/File Photo

“The KC-46 program has made significant strides in moving the Air Force toward the modernization needed in our strategic tanker fleet,” Air Force Secretary Deborah Lee James said in a statement announcing the approval.

The Air Force added it would soon award Boeing contracts for the first two batches, 19 aircraft in total, with a pre-negotiated combined value of $2.8 billion.

Last month the KC-46 refueled an A-10 Thunderbolt II aircraft in flight, passing the final test needed to begin initial low-rate production.

The Air Force said in June that it was seeking compensation from Boeing for delays in the program. Boeing already has taken $1.3 billion in pretax charges for cost overruns.

Boeing expects to deliver a first batch of 18 tankers in January 2018 instead of August 2017.

“Production approval is an important, positive step for the program, and the Boeing/Air Force team has worked extremely hard to get to this point,” Boeing spokeswoman Caroline Hutcheson said.

Reporting by Idrees Ali; Editing by Chris Reese and Leslie Adler

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