NASA’s decision to forgo using Boeing’s troubled Starliner capsule for the return of two astronauts marks yet another blow for the aerospace giant. While the financial hit might be relatively minor, the damage to Boeing’s reputation looms large. Once celebrated as a leader in American engineering, Boeing’s standing has diminished since the twin tragedies of the 737 Max crashes, which claimed 346 lives. Heightened scrutiny over safety concerns, particularly after recent malfunctions with the 737 Max, has only added to the company’s woes. In a move reflecting NASA’s cautious approach, the agency opted to keep the astronauts in orbit until February, rather than risk a potentially hazardous return on the Starliner, which continues to grapple with propulsion system issues. NASA Administrator Bill Nelson stressed that safety remained the top priority, prompting the decision to send the Starliner back to Earth without crew. Despite Boeing’s assurances following recent thruster tests, its continued setbacks serve as a stark reminder of the high stakes involved when human lives are at play.
Boeing’s Financial Woes
Boeing’s troubles extend beyond reputation, with the company suffering losses exceeding $25 billion since 2018 due to its ailing aircraft division. Initially, Boeing’s defense and space sectors helped offset the downturn in its commercial aircraft operations. However, in 2022, those divisions began to struggle as well, posting a staggering $6 billion loss—outpacing even the declines seen in Boeing’s aviation sector. Much of this financial strain is tied to fixed-price contracts with NASA and the Pentagon, where unforeseen cost overruns have led to substantial losses, including a recent $1 billion setback.
The Starliner’s Struggles
Back in 2014, NASA awarded Boeing a significant $4.2 billion contract to develop a vehicle capable of transporting astronauts to the International Space Station (ISS). Despite Boeing’s strong industry reputation at the time, the Starliner program has faced numerous delays and technical problems, including helium leaks and thruster failures. Meanwhile, rival SpaceX successfully flew astronauts to the ISS in 2020, beating Boeing to the punch. Boeing’s persistent technical issues have now resulted in a $125 million loss, bringing the total cost overruns for the Starliner program to over $1.5 billion.
Boeing’s Future
While Boeing’s space division struggles, aerospace analyst Richard Aboulafia believes that the Starliner program’s financial impact on Boeing’s broader business will likely be limited. The $4.2 billion NASA contract represents a relatively small portion of Boeing’s $78 billion annual revenue. However, the program’s delays and setbacks still tarnish Boeing’s reputation. There is some optimism on the horizon, though: Boeing’s new leadership team, led by CEO Robert “Kelly” Ortberg, has brought a fresh wave of accountability and client engagement, especially with government contracts. Additionally, the company’s defense division has secured key contracts for Apache helicopters and F-15 fighter jets, which could aid in stabilizing Boeing’s profitability moving forward.
