US Air Force’s new Boeing KC-46A Pegasus tanker garnered some minor attention lately.

In mid-June 2021, the USAF announced that it found two deficiencies with the airplane. There was a bug in the flight software, increasing the risk of the aircraft becoming unstable in flight; in addition to that, the airplane's receptacle drain line, which would drain water from the refueling system, was prone to cracking at low temperatures. 

Both deficiencies were designated as Category I, meaning that they pose a serious safety risk and will definitely have an impact on the aircraft’s operations.

For any other military gadget that would constitute a scandal. But not for the KC-46. 

A parade of failures

In January 2019, just before the delivery of the first aircraft to the USAF, it turned out that the remote vision system (RSV), which allows the refueling operator to control the refueling boom, tends to distort the image under certain light conditions. This led boom operators to routinely scraping the expensive stealth coating of state-of-the-art jets.

A couple of months later it turned out that the refueling boom itself was not really compatible with the USAF’s slower airplanes, such as the Fairchild Republic A-10 Thunderbolt II. In July 2019 excessive fuel leaks were discovered on 16 of the delivered KC-46s. In September 2019 fasteners in the floor of the Pegasus’ cargo bay were found to be prone to unlocking themselves mid-flight, potentially setting the cargo loose. 

In addition, the auxiliary power unit (APU) of the aircraft, produced by Honeywell, was nothing but unreliable. Its drain mast was not properly welded and would get loose during flight; its duct clamps would crack and get loose too.

All of these were critical Category I deficiencies. Eight of them were found thus far. Some got fixed: Boeing redesigned the failing APU parts and replaced them on all delivered aircraft. Some were partially fixed, downgrading them to Category II: meaning that the deficiency is still there, but it has a workaround. 

An example of Category II deficiency would be incorrect boom movement presets for certain aircraft. The software of the KC-46 tends to think that the General Dynamics F-16 fighter jet flies a lot smoother than it actually does, and would freak out when confronted with its actual characteristics during a refueling procedure. To avoid that, an operator has to override the settings and input presets manually each time before another F-16 gets refueled.

In February 2021, the KC-46 had 608 remaining Category II deficiencies, meaning that there are hundreds of workarounds its crew had to memorize and perform if needed. If that sounds like a lot, in mid-2020 there were 730 such deficiencies. To be fair, that was not particularly relevant, as the aircraft had too many Category I deficiencies to operate at any sufficient scale anyway. 

The cherry on top were foreign objects found in aircraft’s closed compartments. Soon after the first deliveries, it turned out that Boeing workers were leaving all manner of debris, from metal shavings to tools in places where they have no business being. As an aircraft maneuvers, such objects could be hurled around damaging whatever they bump into.

This, coupled with deficiencies, prompted the USAF to briefly stop accepting the Pegasus. Twice. In March 2019, three months after the first delivery, and then again in April, as it turned out that the issues are pretty far from being solved. In addition to that, the military withheld payments for delivered aircraft. The situation was not resolved before April 2020, meaning that it spilled into the financial nightmare of the COVID-19 crisis.

New requirements

But why was it like that? Boeing has a long history of building aerial refueling aircraft. The KC-46 was intended to replace the KC-135 Stratotanker, which has been working admirably for decades. Also, the new jet was based on the Boeing 767 – wide-body airliner with an excellent operational record. Couldn’t Boeing just put a proven refueling system on a newer, but also proven platform? 

No, not really. The thing is, building a modern tanker aircraft is difficult. It can’t be just a transporter with additional fuel tanks and a hose to dispense fuel. USAF has a lot of those already – from McDonnell Douglas KC-10 Extenders adopted in the 80s to aerial refueling pods that can be attached to some transport aircraft. 

The USAF (and NATO as a whole) sees aerial refueling not only as a way to extend the range of its tactical aircraft, but as a central part of its operations: the legs on which the whole combat fleet stands. This means operating constantly, at great ranges, under any conditions, in close conjunction with other assets. Such a way was tested time and time again in past operations, from Desert Storm to the bombing of ISIS militants; the success of almost every mission depended on the refueling aircraft working at the edge of their capabilities. 

Sometimes those aircraft were the only communication nodes for the attacking jets. Sometimes they were the only available way to evacuate injured personnel or transport essential cargo. Continuing to use them in the same way meant that the upcoming tankers had to have multi-mission capability, becoming exponentially more complex than their predecessors. 

On top of that, they would have to operate in a contested environment. With the upcoming generation of long-range Chinese and Russian air-to-air missiles – such as the hypersonic R-37M – staying out of trouble would not always be possible. Part of the reasoning behind the development of those missiles was an understanding of how much NATO air forces rely on their AWACS and refueling aircraft, and an attempt to target them first and foremost.

So, it was paramount for the new tanker to contain every conceivable gizmo from reduced visibility features to electronic countermeasures to cockpit armor. Putting a refueling boom operator in a glass box under the belly of the aircraft was no longer an option. The boom – an incredibly complex system in itself – had to be controlled remotely; the cargo bay had to be quickly reconfigurable; the APU had to work in environments KC-46’s civilian counterpart has nightmares about. Everything had to become much more complex, and everything contained a potential for a failure.

The context

Boeing was not the only manufacturer that had to learn the cost of such a development. KC-46’s main rival, the Airbus A330 MRTT, went through a similar phase too. The deliveries of the aircraft had to be delayed for three years, and an additional three years passed before it reached its initial operational capability – meaning that all the systems on the delivered aircraft worked to a satisfactory degree over half a decade later than Airbus’ customers expected. The program drew sharp criticism from all parties involved, primarily MRTT’s first customer – the Royal Australian Air Force, which was left with no aerial refueling capability for years due to those delays. 

Airbus did not have problems with workers leaving wrenches inside wings, but it relived pretty much every other hardship experienced by Boeing. Some of the problems were connected with the conversion of a civilian aircraft into a military one; some appeared due to the technologies being way beyond anything that was tried before. The electronics did not want to work, the software was full of bugs, the refueling boom kept failing for years. 

And while both the development and the hardships that followed it were very similar for the KC-46 and the A330 MRTT, Boeing’s situation had an additional layer of complexity. The KC-X program, which ran between 2006 and 2011 and resulted in the acquisition of the Pegasus, was not the first attempt to offer a 767-based tanker to the USAF. The replacement for the KC-135 was already planned in 2001, but turned into one of the biggest corruption scandals both the company and the US military ever had. 

The story of Darleen A. Druyun is well known, and this is not the place to recite it; suffice to know that she was a high USAF official and operated on behalf of Boeing, trying to influence certain decisions that would result in the force grossly overpaying for the company’s aircraft. The scheme was uncovered, the top management of Boeing ended up losing their jobs, and the KC-767, as it was called back then, was dumped.

A new acquisition program followed, and was won by the A330 MRTT which was prepared for the American market jointly by EADS (Airbus before its 2014 rebranding) and Northrop Grumman. Boeing disputed the decision claiming that the selection process was flawed; a governmental inquiry found that it was indeed so; bidding was reopened, and this time, after offering a lower price, Boeing won. 

The corruption scandal was still fresh in the public memory, so, saying that the decision was unpopular with the masses would be an understatement. For many it was clear that Boeing won the contract thanks to playing dirty once again. Conspiracy theories persist to this day, playing into the widespread hatred of the KC-46 that could be rivalled only by the unpopularity of the Lockheed Martin F-35 Lightning II.

Maybe those theories have some basis, maybe not. As a matter of fact, the A330 MRTT was not particularly well suited to the way USAF wanted to operate its tankers: it was a bit too big, a bit too inflexible, and if adopted, would require rethinking the entire USAF’s strategy of aerial refueling. But the main point behind Boeing’s proposal – and according to some prominent analysts, the main reason why the KC-46 won – was the cost. 

Boeing moved with incredible aggression, offering its aircraft for the price that was simply unsustainable. The initial development cost of $4.9 billion was less than many of Boeing’s shareholders were comfortable with. On top of that, it was a fixed-price contract – meaning that all cost overruns would have to be covered by the company. 

Such a move was probably seen as necessary to wrestle the initiative away from Airbus, and to get rid of the negative image that formed following the corruption scandal. What could be a better way to convince everybody that Boeing is no longer interested in stealing taxpayers' money. And so, Boeing sealed its fate.

No silver lining

There were several prominent milestones in the story of the KC-46. The first flight, the first delivery, the first successful refueling. 

The latest of such milestones was passed in late 2020. It was related not to the aircraft itself but to its development program, and wasn’t exactly a press release material.

With KC-46 cost overruns reaching over $1.3 billion in the pandemic year alone, the total of those overruns surpassed $5 billion. The amount of additional money Boeing had to pay to fix Pegasus’ problems exceeded the amount USAF agreed to pay for its development. Essentially, at this point, only half of an actual KC-46 development cost will be paid by the USAF, while another half has to be covered by Boeing.

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In its Q4 2020 earnings Boeing reported a new $275 million charge on KC-46 Pegasus, the troubled aerial refueling aircraft.
 

The hole Boeing has put itself in was entirely of its own making: the corruption, the shortsightedness, the unwillingness to learn from Airbus’ experience, all played the part. 

And the USAF got dragged into the same hole too. It has no alternative, having to expand the order as the delivered aircraft continue to be unusable. It has agreed to pay for some of aircraft’s problems itself, all the while admitting that there is no way to employ the KC-46 for regular operations, and such a possibility won’t present itself for years – being pushed away again and again as yet another Category I deficiency gets discovered. 

Sure, all the troubles with the KC-46 amount to merely a fraction – both money- and image-wise – of what Boeing had to pay for the 737 MAX disaster.  And sure, at some point, all the deficiencies will run out, and all the issues will get fixed, and the USAF will have a modern, perfectly working tanker on its hands. 

But that point is still very far away, all the while other important deadlines are nearing. The KC-X was just the first part of the large-scale USAF tanker fleet modernization: the KC-Y and the KC-Z programs are already being worked on, the first of them intended to replace already ancient KC-10s and the second one – to develop a new generation of an aerial tanker altogether. 

Airbus and Lockheed are preparing to exploit the situation to their best abilities. The USAF might be unwilling to trust Boeing once again. Boeing itself might rethink entering the competition, having so many failures on top of a highly disadvantageous financial situation.

Whatever happens, the consequences of the Pegasus’ story will reverberate through the USAF aerial refueling programs for decades.