The U.S. Air Force will issue $882 million in payments to Boeing that had been held back due to glitches in the KC-46 air refueling tanker, a Pentagon official stated Thursday.
The release of the payment to Boeing is a part of a broader recommendation sent to Air Force contracting officers geared toward sustaining the financial health of suppliers to the Division of Defense (DoD).
Will Roper, the Air Force’s prime buyer, told reporters the initiative would release billions of dollars in funding for numerous contractors, not only Boeing.
Boeing’s financial condition has become more and more precarious as an economic downturn from the coronavirus has frozen vital lending markets and cut off demand for Boeing’s commercial plane.
The Air Force could hold back nearly $28 million of the cost of each of the first 52 KC-46 Pegasus jetliners on order to ensure Boeing delivers absolutely functional tankers. With 33 aircraft delivered to date, the Air Drive may have withheld up to $924 million.
The Air Force aims to purchase 179 of the jet, which refuels other jets mid-air; however, this system has been plagued with problems, along with overseas object debris found onboard the aircraft and points with a digicam system used during the refueling process.
Besides the release of funds, the Air Force and Boeing have a memo of a contract that would allow the flying tanker jet to enter service for refueling missions. Thus far, the aircraft has merely been flying cargo missions.