Aircraft Major Boeing Discloses New Loss of $ 565 Million Pertinent To KC-46 Tanker.

Washington; January 2026: Aircraft major Boeing has reported a financial loss of $ 565 million on the KC-46 tanker in the last quarter of 2025, driving margins for its defence business to the red, the company announced today. After years of staggering losses on fixed-price development programs, Boeing’s defence business showed signs of improvement through most of 2025, with only one minor charge before the KC-46 loss this past quarter.

During an earnings call today, Boeing CEO Kelly Ortberg emphasised that the latest charge on the beleaguered tanker does not reflect larger issues across its defence business, with executives attributing it to higher production support and supply chain costs.

“The predominance of the charge is increased cost on the actual 767 commercial airplane production”, Ortberg said, referring to the Boeing 767 jetliner that forms the basis of the KC-46 design. “We delivered 14 tankers in 2025 and we are planning to deliver 19 in 2026, and we made the conscious decision that we needed to keep resources at a higher level to assure that we make those deliveries on time”.

Ortberg’s assertions were further vetted by the CFO Jay Malave added that the production support costs involved “keeping higher levels of quality and engineering support” at the company’s facility in Everett, Wash., which has helped improve production quality.

“For example, as compared to the first half of the year, we saw average factory rework levels decrease by 20% in the fourth quarter”, he said. “So, while these investments are starting to evidence progress, we need to sustain them for longer than previously planned to promote stability”.

For the larger part of a decade, the KC-46 has been rife with technical and schedule issues that have driven up costs on the $4.9 billion fixed-price contract. Under the terms of its agreement with the Air Force, Boeing is responsible for paying any costs over that ceiling, which has led to the company spending more than $7 billion out of pocket on its development.

Despite the program’s struggles, the Air Force in 2025 announced that it would move forward with a second buy of up to 75 KC-46s. Negotiations on pricing will commence this fall, Ortberg said, adding that Boeing is ensuring that it understands the full cost of building the tanker ahead of those discussions.

“Obviously, you know this has been a bad contract for the last decade, this existing contract”, Ortberg said, while further adding – “As we enter into a new opportunity where we get to reprice, we want to make sure that we underwrite that contract, to ensure it’s a fair contract, and we can make money on that”.

Due to the losses on KC-46, Boeing’s defence business ended up with negative operating margins of -0.5% for the year, which is still a major improvement from 2024 when operating margins were at -22.6%. Boeing executives expect to see “sequential improvement” in its defence business from 2025 to 2026, with “gradual improvements” thereafter, Malave said.

“Obviously, this is predicated on successfully completing these programs without taking additional charges and leveraging the active management playbook to continue to de risk these programs”, Malave said. “The tanker charges this quarter highlights there remains risk on these programs, even if the envelope of risk has been significantly reduced over the last year”.

Seth Seifman, an analyst with JP Morgan, said in a note to investors that the KC-46 charge was “a bit disappointing, but this program has taken far bigger charges and while costs are up, the key thing at this point is to maintain execution”.

Boeing is also engaged with the Air Force on a multiyear contract for the PAC-3 seeker, Ortberg said.  The Defence Department recently announced plans to ramp PAC-3 production over the next seven years, with prime contractor Lockheed Martin making investments to enable that increase. Because Boeing has already made capital expenditures (Capex) to increase production capacity for the PAC-3 seeker, Ortberg said he didn’t “see a big step up in Capex” for the multiyear contract.

Team Maverick.