After months of bedeviling technical challenges and scaling back the scope of work on the Blue Devil II airship project, the U.S. Air Force has finally shot the program down.

The service has notified prime contractor MAV6 — a fledgling company managed by two retired general officers — that it must cease work on the program owing to poor performance. Originally envisioned for quick deployment to Afghanistan in February, 18 months after contract award, the program had yet to reach first flight.

The team also encountered problems overseeing development of the massive tail fins for the airship and software for unmanned operation. The Air Force’s frustration with this performance has not been a secret, and the service slowly eroded MAV6’s work scope as a result.

Blue Devil II was originally envisioned as an airship capable of carrying 2,500 lb. of intelligence-collecting payload, including the Defense Advanced Research Projects Agency’s Autonomous Real-Time Ground Ubiquitous Surveillance Imaging System (Argus), a version of which is optimized for use in Afghanistan on the A160T Hummingbird unmanned aircraft.

The Air Force also planned to put two separate Axsys video balls on the airship, capable of providing high-definition video feeds. The “Pennant Race” signals-intelligence collector, an upgraded version of a system that now flies on the Reaper, also was eyed for Blue Devil II, according to Air Force sources.

Blue Devil II was one of several airship efforts that recently garnered interest — and money — from senior Pentagon officials hoping to improve intelligence-collection efforts in the permissive airspace over Afghanistan. The infatuation was largely owing to the vision of parking an airship over an area to collect intelligence for a day or more with what officials thought would be little manpower and operational expense.

But in reality, the airship vision — at least for Blue Devil II — has fizzled like a slow leak in a balloon. The system’s cost has grown substantially. The price was originally pegged at $86 million, but service officials last year estimated it could cost double that amount to execute the original contract.

In March, the Air Force rescoped MAV6’s work on the project, taking the intelligence payload integration off the contract. An Air Force source also noted that the service backed off of plans to integrate software to make the system unmanned in its original deployment, owing to development issues. The goal simply became to prove the airship would fly, this source says, because it became evident that a fully integrated system would not materialize.

“Since that time, the prime contractor has continued to struggle with technical problems to include flight control software, tailfin design and electrical system wiring,” according to an Air Force message sent to Capitol Hill. “Neither airship completion nor first flight is possible within the remaining contract period of performance, which ends 30 June 2012.” The service requested no funding for Blue Devil II in the fiscal 2013 budget proposal.

Remaining funds will now be used to disassemble, pack and ship existing hardware. The Air Force estimates that less than 100 employees will be impacted by the decision.

Blue Devil II was the second phase of a two-phase effort. The original system, Blue Devil I, has been flying in Afghanistan and includes a wide-area camera and signals-intelligence collection capability optimized to track individuals on the ground, mounted on a King Air 90. SAIC is the prime contractor.