NASA Ditches Boeing's Starliner for SpaceX 

Boeing Co. (BA)is facing a challenging decision that balances its national responsibilities against its strained financial resources. Boeing’s newly appointed CEO, Kelly Ortberg, now controls the future of the troubled Starliner program following NASA’s announcement over the weekend that it would not bring astronauts back from the space station using the faulty spacecraft. 

Instead, the space agency decided, after weeks of testing and intense debate, that it would be safer to rely on Elon Musk’s SpaceX.

The possibility of NASA astronauts being stranded in space is just one of many embarrassing moments for Boeing in a year marked by multiple crises, including a near-disastrous incident involving a 737 Max jetliner, federal investigations, and upheaval in the executive ranks.

Ortberg, who took over earlier this month, and the senior leadership team, known internally as “exco,” now face tough questions about the company’s commitment to human spaceflight and the Starliner program.

Boeing’s Starliner Losses and Stock Impact

On Monday, JPMorgan analyst Seth Seifman warned that the decision “could result in further Starliner losses for Boeing.”

Boeing’s shares slipped 1% in premarket trading at 7:44 a.m. in New York. The stock has lost roughly a third of its value since the start of the year.

Before Ortberg’s arrival, Boeing executives had committed to honoring the company’s contract to ferry astronauts to the International Space Station for NASA. Bill Nelson, the head of NASA, mentioned that Ortberg recently expressed support for continuing the Starliner program after it returns from the space station without crew on board. 

He assured me they would address the issues once Starliner is back safely, ensuring we maintain redundancy and crewed access to the space station.

Nelson

In a July filing, Boeing reported $125 million in additional losses due to delays in the crewed flight test and issues with Starliner’s propulsion systems. Clayton Swope, deputy director of the Aerospace Security Project, noted that the losses are substantial for Boeing and could raise questions about the viability of such a business in the long term.

According to Swope, Boeing remains NASA’s best hope for maintaining a diversified strategy despite its setbacks. If Boeing were to withdraw from the contract, “It wouldn’t be a good outcome for NASA either. They’d have to start over with the commercial crew program,” Swope said. The agency could turn to Sierra Space Corp. to accelerate plans for a crewed version of its Dream Chaser vehicle, which lost out to Boeing and SpaceX in the original bidding a decade ago. However, that’s still years away, given delays in developing a cargo version of the spacecraft.