Can Boeing’s Breakthrough Plan Bring it More Good News?

Boeing‘s (NYSE:BA) design for an aerial tanker that can refuel other aircraft mid-air will undergo a major design review by July, according to the U.S. Air Force.

The development brings more good news for Boeing; its struggles with the 787 Dreamliner craft’s lithium ion battery system have been resolved and the new jet has been re-approved for commercial use around the world. Boeing stock soared after engineers solved the problems that were causing batteries in the innovative 787 to overheat. The new Dreamliner craft is made of a lighter material and so is more fuel efficient than other commercial jets, and airlines can now reap the benefits of their investments in the 787 after the plane was grounded for 3 months.

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The Air Force design review will begin the production process for the first planes in the $52 billion KC-46 tanker program. The planes will be based on Boeing’s 767 commercial jets. The future of the project was looking uncertain after mandatory funding cuts and the 2005 scandal that resulted in the firing and imprisonment of Boeing Chief Financial Officer Michael M. Sears and Pentagon official Darleen Druyun.

The order from the Air Force for the KC-46 tankers is another victory for Boeing over rival European aircraft maker Airbus. The tanker program is one of the Pentagon’s biggest weapons projects, and there was a decade’s worth of competition between Boeing and Airbus over the project.

The Air Force has ordered 179 of the new planes and is set to receive the first 18 of them from Boeing by 2017. The Air Force will use the Boeing planes to replace its current fleet of 50-year-old KC-135 tankers. Major General John Thompson, who oversees the Air Force tanker program, said that the KC-46 project is in “a really good place” because Congress and the Air Force have provided it with sufficient funding and kept stable requirements. Boeing has also met its goals under the program’s fixed price contract.

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Although the project is currently looking optimistic, Thompson was careful to note that it is still in its development phase and no production, flight-testing, or critical-component demonstrations have yet taken place. If successful, this project will only bolster Boeing’s ego in regards to competition from Airbus.

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