Delay to Boeing's KC-46 tanker raises risk of further costs

(Adds details on cause of delay, comment by U.S. military official, stock price)

By Alwyn Scott

NEW YORK, May 27 (Reuters) - The U.S. Air Force said on Friday that Boeing Co will miss its deadline for delivering an initial batch of KC-46 Pegasus aerial tankers, potentially raising the cost to Boeing of a program already behind schedule and $1.3 billion over budget.

Boeing's $49 billion contract calls for it to supply 179 KC-46A tankers, with the first group of 18 aircraft due by August 2017. Those will now be delivered by January 2018, and will lack some capabilities until October 2018, the Air Force said.

"Technical challenges with boom design, and issues with certification" of some of the systems led to the delays, Brigadier General Duke Richardson, program executive officer for tankers, said in a statement on Friday.

During development, "the Air Force remained cautiously optimistic that Boeing would quickly address these issues and meet the original goal," he said. But major procurement programs always pose risks, he added, noting the government faces no additional costs.

Boeing did not disclose any new tanker charges but said any costs would be tallied in second-quarter results and "take into account remaining management reserves, along with our ongoing cost mitigation efforts."

Boeing has taken $1.3 billion in charges on the program, and said a month ago it would meet the August 2017 deadline. At that time it also announced a $156 million tanker charge.

The company's stock dipped 7 cents to close at $129.22 on Friday.

Some analysts expect Boeing to lose money on each KC-46 aircraft, which is made from a modified Boeing 767 jetliner, but earn it back through sales of spare parts and upgrades.

In January, a test KC-46 successfully refueled an F-16 fighter jet flying at 20,000 feet, setting the stage for refueling tests with other military aircraft. Boeing had planned to complete the first refueling test last year.

The KC-46 tankers will replace the current fleet of KC-135 aircraft, which allow other planes to fly longer missions by refueling them in mid-air.

The Air Force said the first few in the batch of KC-46 tankers are now due to arrive in late summer or early autumn of 2017, and that all 18 should be delivered by January 2018.

The latest delays involve the centerline drogue system and wing air refueling pods, the Air Force said. Boeing said qualification and certification of the systems is taking longer than expected.

(Additional reporting by Idrees Ali in Washington; Editing by Diane Craft and Matthew Lewis)