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US Air Force says Boeing KC-46 tanker passes final test for initial production

(Adds Boeing comment, share price)

By Alwyn Scott

NEW YORK, July 19 (Reuters) - The U.S. Air Force said on Tuesday that a Boeing Co KC-46 Pegasus aircraft had refueled an A-10 Thunderbolt II aircraft in flight, passing the final test needed to begin initial low rate production.

"The successful A-10 mission was the last of six in-flight refueling demonstrations required before the tanker program can request approval...to award production Lots 1 and 2, totaling 19 KC-46A aircraft," the Air Force said in a statement. The test of the A-10, also known as the "Warthog," was completed Friday, the Air Force said.

The Air Force said the low rate initial production contracts are expected to be awarded shortly after the decision to proceed is made. The decision is expected in August, the Air Force said.

Boeing shares were up 0.4 percent at $133.91 in early trading on the New York Stock Exchange.

"We're proud of the great work the Boeing-Air Force team has done to accomplish this important milestone," Boeing said in a statement. The company declined to respond to questions about how the successful test might affect Boeing's costs and timetable for delivering initial aircraft to the U.S. military.

The Air Force said in June that it was seeking compensation from Boeing for delays in the program. Boeing already has taken $1.3 billion in pretax charges for cost overruns on the program, expected to be worth $48.2 billion. It said any charges would be accounted for in the second-quarter results, which are due to be released next week.

(Reporting by Alwyn Scott; Editing by Chizu Nomiyama and W Simon)