Boeing Explores Future of Starliner Space Program Amidst Challenges
Boeing is currently evaluating options for its Starliner space capsule program, which has faced numerous challenges. This review is part of a larger assessment of the company’s business portfolio initiated by the new Chief Executive Officer, Kelly Ortberg, according to a source familiar with the situation.
The evaluation is still in its early phases, and no definitive decisions regarding the potential divestment of the Starliner program have been made as of yet. The source, who requested to remain anonymous due to the confidential nature of the information, indicated that the company might choose to retain the Starliner business.
As of now, Boeing is not actively pursuing a sale of its entire space operations or seeking to offload its NASA contracts related to the International Space Station (ISS) or the Space Launch System (SLS), a significant rocket that aims to help transport American astronauts back to the Moon. This clarification follows earlier reports stating that Boeing could be considering a sale of its NASA business.
In response to queries about the situation, a spokesperson for Boeing stated via email that the company does not comment on market rumors or speculation.
If Boeing opts to part with the Starliner program, it would relieve itself from an initiative that has accumulated over $1.8 billion in financial losses. This includes a significant charge of $250 million logged in the third quarter, which followed a problematic flight test that left two American astronauts stranded at the space station for an extended duration.
The reevaluation of the Starliner program coincides with Ortberg's efforts to address a prolonged six-week labor strike, which has halted the production of critical jetliners, including the profitable 737 Max. This work stoppage is further straining the company's financial resources, with credit ratings nearing junk status and an increasing cash burn rate anticipated to persist into 2025.
During a recent earnings call on October 23, Ortberg expressed his intent to concentrate on Boeing’s core areas of commercial aircraft and defense, aiming to streamline the company's expansive portfolio. He noted, “We’re better off doing less and doing it better than doing more and not doing it well.”
Even before recent setbacks, the future of Starliner seemed uncertain, which included planning for just a handful of additional missions to the ISS for NASA. As Starliner experienced multiple delays, SpaceX’s competing Crew Dragon capsule has successfully completed 43 flights to the ISS since 2019, delivering both crew and cargo for NASA.
The decision to distance itself from the space sector would represent a substantial change for Boeing, a company that has played a pivotal role in America's achievements in space exploration for over 50 years. Its historical influence includes contributions to the Saturn V rocket that first carried humans to the Moon, as well as involvement in satellite development, the secretive X-37B space plane, and the management of the ISS.
However, over the last decade, Boeing has lagged behind significant advancements made by other companies, such as SpaceX, which have focused on reusable rocket technology. With the ISS nearing its retirement and with Boeing and Lockheed Martin actively seeking a buyer for their joint venture, United Launch Alliance, the company's direction in the space market appears increasingly uncertain.
As of 3:01 PM New York time on Friday, Boeing's stock showed little movement.
Boeing, Starliner, Space