After a humiliating setback to its space ambitions, Boeing faces a dilemma: its commitment to the nation conflicts with tight money reserves.
The decision on the longer term of the struggling Starliner program now rests with Boeing’s newly installed CEO Kelly Ortberg after NASA announced Saturday that it might not send astronauts home from the space station on the faulty spacecraft. After weeks of testing and heated debate, the space agency decided it was safer to make use of Elon Musk’s SpaceX.
The prospect of NASA astronauts being stranded in space is just considered one of many embarrassing moments for Boeing in an epically bad yr that has seen a almost catastrophic blowout a flying 737 Max jetliner, Federal investigations and a Restructuring of the manager floor.
That leaves Ortberg, the took excessive job Earlier this month and the Senior Leadership Council, known internally as “Exco”, to deal with sensitive issues in regards to the Commitment to manned space flight and Starliner.
Before Ortberg joined Boeing, executives had promised to honor the corporate’s contract to move astronauts to the International Space Station for NASA. Bill Nelson, the agency’s top leader, said Ortberg recently advocated continuing the Starliner program after the spacecraft was sent back from the space station without humans on board.
“He expressed to me his intention that they will continue to work on the issues once Starliner has safely returned and that we will have our release certificates and our manned access to the space station,” the NASA administrator told reporters on Saturday.
But as the brand new boss tasked with getting Boeing back on target after years of turmoil, Ortberg has free rein to make sweeping changes and unpopular decisions, including potentially abandoning the human spaceflight initiative.
“Will they ultimately end the program because it is too complicated,” because Boeing isn’t getting its investment back, “and because the other company can do it better?” asks Robert Spingarn, an analyst at Melius Research. “That can happen.”
Much will rely upon how Starliner fares on its return trip to Earth next month without astronauts on board. NASA has not ruled out certifying the Boeing spacecraft, but one other test flight could also be needed before the capsule can carry astronauts again. That could cost Boeing about $400 million, based on the prices the corporate recorded for repeating an earlier test flight. Agency experts are still unsure why the engines suddenly stopped working.
Boeing’s strained balance sheet and an expected money burn of at the very least $5 billion this yr are aspects the corporate must weigh against its experience in space, which stretches back to the Apollo moon landing program. After cost overruns of about $1.6 billion, the struggling aerospace giant is unlikely to ever generate profits on Starliner.
In a filing in July, the corporate disclosed latest losses of $125 million as a consequence of delays in manned flight tests and tests of the Starliner’s faulty propulsion systems. “For Boeing, the losses are significant and would call into question the viability of such a business when viewed over the long term,” said Clayton SwopeDeputy Director of the Aerospace Security Project on the Center for Strategic and International Studies.
Starliner is considered one of several fixed-price contracts weighing on profits at Boeing’s defense and space division, which posted an operating lack of $762 million in the primary six months of 2024, barely greater than the yr before. The obstacles of a business that was once reliably profitable are more likely to be a pressing concern for Boeing’s latest CEO.
“I think it’s really important that he takes a hard look at this,” said Douglas Harned, an aviation analyst at Bernstein. “He’s coming in with a clean slate.”
Boeing declined to comment on its internal deliberations on the fate of the Starliner. In an internal message the corporate shared on Saturday, Mark NappiBoeing’s vice chairman and program manager, said employees would meet on Monday to think about next steps.
“I know this is not the decision we had hoped for, but we stand ready to take the necessary actions to support NASA’s decision. The focus remains first and foremost on ensuring the safety of the crew and the spacecraft,” Nappi said.
Even before this weekend’s setback, there have been signs that Boeing’s long-term commitment to Starliner was being questioned. Late last yr, Chief Financial Officer Brian West told a small group of investors that the corporate needed to make a call about future investments in this system after it has fulfilled its commitments to NASA for half a dozen flights to the ISS.
NASA itself is facing critical compromises in planning the longer term of business crew program.
The agency designed this system from the beginning to permit multiple U.S. spacecraft to hold astronauts and cargo into orbit. While Starliner is seven years behind schedule, SpaceX has sent nine separate crews to the space station for NASA since 2020.
Despite all of the setbacks, Boeing stays NASA’s best hope for pursuing a multiplayer strategy, Swope said. If Boeing were to tug out of the contract, “that would not be a good outcome for NASA either. They would have to start over with a commercial crew,” Swope said.
The agency could partner with Sierra Space to advance plans for a manned version of its Dream Chaser spacecraft. lost to Boeing and SpaceX in the unique bidding process a decade ago. But that continues to be years away Delays to a cargo version of the ship.
Given the danger, Swope believes NASA will try to seek out a way that keeps Boeing within the business crew program while solving a few of its financial problems. If the aerospace giant must send Starliner autonomously into space to check its failure-prone engines, perhaps the agency could convert that right into a cargo mission, he said.
Space is way from the one problem facing Ortberg. The veteran aerospace executive got here out of retirement to take over as Boeing’s CEO. He can be expected to assemble his leadership team after which tackle tougher problems, akin to the standard issues and poor execution across the Boeing corporation.
“If Boeing gets its commercial aircraft business under control, what happens in space will be far less relevant,” said Spingarn of Melius Research.
