Boeing recently disclosed an additional financial hit for its troubled Starliner Commercial Crew Program, pushing the company’s total losses on the project to a staggering $1.6 billion.
In its quarterly earnings report, Boeing reported a $125 million loss attributed to the new capsule program. The delay in the Crew Flight Test, the spacecraft’s maiden mission to carry astronauts into orbit, was cited as the primary cause. This recent charge contributes to the nearly $1.6 billion total loss Boeing has incurred on the Starliner program since 2016.
These financial setbacks have largely been due to schedule delays and the necessity for extra work to resolve issues with the spacecraft. Initially, when NASA awarded Boeing a $4.2 billion contract to develop the Starliner spacecraft a decade ago, the goal was to have the capsule ready to fly astronauts by the end of 2017. However, the Crew Flight Test did not occur until June 5, 2024, seven years later.
Simultaneously, Boeing announced a leadership change, with Kelly Ortberg set to take over as CEO on August 8, succeeding Dave Calhoun, which carried the company since the 737 Max’s troubled aftermath.
Ortberg previously led Rockwell Collins, now known as Collins Aerospace, a major aerospace industry supplier.
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Fixed-Price contracts: not for Boeing
When NASA selected Boeing and SpaceX to develop the Starliner and Crew Dragon spacecraft, respectively, for astronaut missions, both companies entered into fixed-price contracts agreements. But what does it mean fixed-price contract?
To make it simple: under these agreements, contractors are responsible for covering any cost overruns. Consequently, each delay in the Starliner program since 2016 has translated into financial losses for Boeing. Notably, the company will also need to found any work and fix for issues identified during the ongoing crew test flight.
Boeing warned investors that further losses could occur in the future due to Starliner’s continued challenges. Not a surprise for those following the program…
Including the latest financial charge, NASA and Boeing have collectively invested at least $6.7 billion in the Starliner program since 2010. This figure encompasses costs for spacecraft development, testing, and NASA’s payment for six operational crew flights with Starliner.
Boeing’s leadership attributes the program’s financial losses to the fixed-price contract structure. Similar contracts with the Pentagon for developing new Air Force One aircraft, tankers, drones, and trainer airplanes have also resulted in reported losses for Boeing.
Conversely, SpaceX has thrived under fixed-price contracts, which NASA employs for various Artemis program elements aimed at lunar exploration. One example? The Starship Human Landing System.
To have a complete overview of those costs, SpaceX’s Crew Dragon, which began flying astronauts in 2020, has cost NASA ~$3.1 billion for a comparable scope of work.
However, SpaceX’s expenses remain undisclosed since it is a privately held company. The comapny has completed all six of its initial crew flights for NASA, whereas Boeing’s first operational service with Starliner is at least a year away.
Due to Boeing’s delays, NASA has extended SpaceX’s commercial crew contract to cover eight additional flights to the ISS.
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A doubtful future for Starliner
The current test mission of the Starliner spacecraft is expected to conclude in August, with NASA astronauts Butch Wilmore and Suni Williams returning from the International Space Station. A successful test flight conclusion would enable Boeing to begin its backlog of six operational crew missions to the Station.
However, the mission has encountered complications. Initially planned to remain at the space station for at least eight days, the Starliner test flight has extended nearly two months due to issues with the spacecraft’s propulsion system. Engineers are investigating helium leaks in the service module and overheating in the small maneuvering thrusters that occurred during docking.
Recent tests, conducted by Boeing and NASA on a separate module on Earth, showed that 27 of the 28 maneuvering thrusters functioned normally despite previous overheating. Moreover, despite the leaks, there is sufficient helium to maintain propulsion system pressure. A readiness review by senior NASA officials will finalize the decision to undock Starliner and return it to Earth.
According to a press release dated July 31 from Boeing, teams are preparing for the Starliner’s return to Earth. Boeing’s and NASA teams participated in a practice undocking simulation, while Butch and Suni monitored the simulation from aboard Starliner.
Additionally, Boeing and NASA teams collaborated to update data parameters and fuel quantities. The crew also refilled the spacecraft’s water systems, pressure-checked their spacesuits, and conducted an exterior inspection using the Canadarm.
NASA hopes that a flawless test flight will allow the agency to certify Starliner for regular six-month expeditions to the space station. This would pave the way for the first operational Starliner flight, Starliner-1, now scheduled for August 2025 to allow more time to resolve the identified issues.
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