Defense

Boeing May Be Responsible for Air Force Tanker Overrun Costs

Maybe have to absorb $700 million as they go over budget on contract

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Boeing Co. may have to absorb as much as $700 million in cost overruns on the refueling tanker the company is developing for the U.S. Air Force, about $300 million more than previously estimated, according to the service.

Boeing, which is developing the KC-46A tanker using its 767 commercial airliner, is responsible for all costs exceeding the development-stage contract's $4.9 billion ceiling, the Air Force said.

The new, higher estimate was disclosed in response to an inquiry about the latest cost projections for what's planned as a 179-aircraft, $51.7 billion program including research, production and aircraft support.