NASA含羞草研究社檚 announcement Saturday that it won含羞草研究社檛 use a troubled Boeing capsule to return two stranded astronauts to Earth is a yet another setback for the struggling company, although the financial damage is likely to be less than the reputational harm.
Once a symbol of American engineering and technological prowess, Boeing has seen its reputation battered since two 737 Max airliners crashed in 2018 and 2019, killing 346 people. The safety of its products came under renewed scrutiny after a panel blew out of a Max during a flight this January.
And now NASA has decided that it is safer to keep the astronauts in space until February rather than risk using the Boeing Starliner capsule that delivered them to the international space station. The capsule has been plagued by problems with its propulsion system.
NASA administrator Bill Nelson said the decision to send the Boeing capsule back to Earth empty 含羞草研究社渋s a result of a commitment to safety.含羞草研究社� Boeing had insisted Starliner was safe based on recent tests of thrusters both in space and on the ground.
The space capsule program represents a tiny fraction of Boeing含羞草研究社檚 revenue, but carrying astronauts is a high-profile job 含羞草研究社� like Boeing含羞草研究社檚 work building Air Force One presidential jets.
含羞草研究社淭he whole thing is another black eye含羞草研究社� for Boeing, aerospace analyst Richard Aboulafia said. 含羞草研究社淚t含羞草研究社檚 going to sting a little longer, but nothing they haven含羞草研究社檛 dealt with before.含羞草研究社�
Boeing has lost more than $25 billion since 2018 as its aircraft-manufacturing business cratered after those crashes. For a time, the defense and space side of the company provided a partial cushion, posting strong profits and steady revenue through 2021.
Since 2022, however, Boeing含羞草研究社檚 defense and space division has stumbled too, losing $6 billion 含羞草研究社� slightly more than the airplane side of the company in the same period.
The results have been dragged down by several fixed-price contracts for NASA and the Pentagon, including a deal to build new Air Force One presidential jets. Boeing has found itself on the hook as costs for those projects have risen far beyond the company含羞草研究社檚 estimates.
The company recorded a $1 billion loss from fixed-price government contracts in the second quarter alone, but the problem is not new.
含羞草研究社淲e have a couple of fixed-price development programs we have to just finish and never do them again,含羞草研究社� then-CEO David Calhoun said last year. 含羞草研究社淣ever do them again.含羞草研究社�
In 2014, NASA awarded Boeing a $4.2 billion fixed-price contract to build a vehicle to carry astronauts to the International Space Station after the retirement of space shuttles, along with a $2.6 billion contract to SpaceX.
Boeing, with more than a century of building airplane and decades as a NASA contractor, was seen as the favorite. But Starliner suffered technical setbacks that caused it to cancel some test launches, fall behind schedule and go over budget. SpaceX won the race to ferry astronauts to the ISS, which it accomplished in 2020.
Boeing was finally ready to carry astronauts this year, and Butch Wilmore and Suni Williams launched aboard Starliner in early June for what was intended to be an 8-day stay in space. But thruster failures and helium leaks led NASA to park the vehicle at the space station while engineers debated how to return them to Earth.
The company said in a regulatory filing that the latest hitch with Starliner caused a $125 million loss through June 30, which pushed cumulative cost overruns on the program to more than $1.5 billion. 含羞草研究社淩isk remains that we may record additional losses in future periods,含羞草研究社� Boeing said.
Aboulafia said Starliner含羞草研究社檚 impact on Boeing business and finances will be modest 含羞草研究社� 含羞草研究社渘ot really a needle-mover.含羞草研究社� Even the $4.2 billion, multi-year NASA contract is a relatively small chunk of revenue for Boeing, which reported sales of $78 billion last year.
And Aboulafia believes Boeing will enjoy a grace period with customers like the government now that it is under new leadership, reducing the risk it will lose big contracts.
Robert 含羞草研究社淜elly含羞草研究社� Ortberg replaced Calhoun as CEO this month. Unlike the company含羞草研究社檚 recent chief executives, Ortberg is an outsider who previously led aerospace manufacturer Rockwell Collins, where he developed a reputation for walking among workers on factory floors and building ties to airline and government customers.
含羞草研究社淭hey are transitioning from perhaps the worst executive leadership to some of the best,含羞草研究社� Aboulafia said. 含羞草研究社淕iven the regime change underway, I think people are going to give them some slack.含羞草研究社�
Boeing含羞草研究社檚 defense division has recently won some huge contracts. It is lined up to provide Apache helicopters to foreign governments, sell 50 F-15 fighter jets to Israel as the bulk of a $20 billion deal, and build prototype surveillance planes for the Air Force under a $2.56 billion contract.
含羞草研究社淭hose are some strong tailwinds, but it含羞草研究社檚 going to take a while before they get (Boeing含羞草研究社檚 defense and space business) back to profitability,含羞草研究社� Aboulafia said.
David Koenig, The Associated Press
