US Air Force agreement granted respite to Boeing amid COVID-19 crisis

The US Secretary of the Air Force Public Affairs’ agreement with Boeing on the release of withheld KC-46A Pegasus contract payments will be felt as a welcome relief by the plane maker. Boeing was already in trouble since the grounding of the B737 Max last year, after two successive crashes of the aircraft, freezing a significant part of the company’s commercial backlog. However, the COVID-19 outbreak is currently taking the biggest toll on Boeing, says GlobalData, a leading data and analytics company. 

Nicolas Jouan, Defense Analyst at GlobalData, commented: “Boeing had to pause work temporarily at its Puget Sound (WA) and Ridley Township (PA) facilities, while dividends were suspended on March 20 until further notice. With the defaults of an increasing amount of airlines, sources of cashflow are now looking scarce for the company.

“Defense is currently a refuge for Boeing, in contrast to its commercial aviation business and the troubles of the B737. But even then, the picture is not so bright.”

The acquisition of upgraded F-15EX aircrafts to complement the F-35 program was debated in Congress even before the COVID-19 crisis, which is likely to add more budgetary constraints to the mix and endanger the project. Technical blunders are still haunting the KC-46 program, and a parallel agreement requires the company to redesign and retrofit the remote vision system at no additional cost for the Pentagon. Despite this, the announcement will be a welcome respite this time.

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