Boeing’s defense unit recorded $222 million in losses in the first quarter of 2024 on the KC-46A Pegasus refueling tanker and T-7A Red Hawk trainer programs. The KC-46 suffered a loss of $128 million due to supply chain constraints, while the T-7’s loss came from higher-than-expected production costs. This marks the second quarter in a row of losses for Boeing on these programs, bringing the KC-46’s cumulative losses to at least $7.1 billion.

Boeing Defense, Space, and Security performed stronger than the rest of the company in the first quarter of 2024, despite a decline in total revenue. The company’s commercial airplane sector saw a significant drop in revenue, leading to an overall loss of $355 million for Boeing.

Boeing’s defense sector brought in nearly $7 billion in revenue, up 6% from a year earlier, with $151 million in profits. The company aims to return the defense sector to high single-digit profits by 2025 or 2026. The Air Force’s flight tests on the T-7 are progressing well, with strong demand for Boeing products in the Pentagon’s fiscal 2025 budget proposal.

Boeing is working to address quality concerns in its commercial airplane sector, with CEO Dave Calhoun emphasizing the need to strengthen quality and safety management systems for a more stable future. The company is also making progress on its fixed-price programs, including the VC-25B Air Force One program.