Japanese Deliveries On Hold, May Spell Trouble For KC-X Bid

The Federal Aviation Administration has not yet fully certified Boeing's KC-767 aerial refueling tanker... and that means the aircraft's first customer is still waiting for its first plane.

The Mobile (AL) Press-Register obtained a copy of the FAA airworthiness certificate for the tanker, which is a variant of the commercial 767 airliner. The document places limitations on how the aircraft may be used -- and restricts some areas from carrying passengers and cargo, according to the paper. Under terms of a contract with the Japanese Ministry of Defense, Boeing and its Japanese business partner -- Itochu Corp. -- were required to obtain full FAA certification by February 28, 2007 before the first of four tankers was delivered.

Technically, that certification isn't required for a military aircraft... but Japan has insisted on it, and it is also a requirement in the bid to replace the US Air Force's current fleet of aging KC-135 tankers. As ANN reported, the KC-767 is duking it out against the Airbus-based KC-30, being offered by a team comprised of EADS and Northrop Grumman.

According to media reports, the primary issue with the KC-767 concerns a relatively minor part -- an air circulation distribution valve, which regulates air flow and pressurization. That shouldn't be a deal-breaker... but so far, a fix hasn't been presented to the FAA.

"It's a minor component. There's no way Boeing isn't going to fix it," said Leeham Co. aerospace analyst Scott Hamilton. "But there's no question it's an embarrassment for them."

The FAA agrees. Agency spokesman Les Dorr implies the FAA is waiting for Boeing to get back to them on the issue.

"There were a couple of areas where the tests were lacking and we asked them to come back and provide more data," said FAA spokesman Les Dorr. "We fully expect that, once they demonstrate that to us, the limitations will be removed. But it's up to Boeing as to when they do that."

Until the part is replaced, the first Japan Air Self Defense Force (JASDF) KC-767 sits at Boeing's modification center in Wichita, KS... reportedly racking up fines of about $82,000 for each day the plane's delivery is delayed.

Boeing maintains the issue has been blown out of proportion.

"The assertion that the FAA would not certify the aircraft is inaccurate," Boeing spokesman Bill Barksdale told Bloomberg. "Boeing did not submit Japan's first KC-767 for full certification. Rather we followed the normal precedent of certifying this new tanker through a robust military qualification and limited FAA certification. From the beginning, we have worked closely with our customers and have followed contractual requirements."

Difficulty in obtaining FAA certification was a sticking point with another recent military aircraft acquisition program. As ANN reported, Lockheed Martin's C-130J was eliminated from the Air Force's Joint Cargo Aircraft contract last year, over the lack of FAA approval. Lockheed fought the move, but the Government Accountability Office sided with the USAF.

The Air Force has said it will factor in past performance as it decides between the KC-767 and KC-30... meaning the USAF is watching Boeing's response to the FAA certification delay very closely.

FMI: www.boeing.com, www.faa.gov, www.af.mil