Boeing Considers Future of Starliner Space Program

Boeing is currently evaluating the future of its troubled Starliner space capsule program amidst a comprehensive review of its business portfolio, driven by the new Chief Executive Officer, Kelly Ortberg, as reported by a source familiar with the situation.

This review is still in the early phases, and no concrete decisions regarding the potential divestment of the Starliner program have been finalized, according to the source, who requested anonymity when discussing private information. There remains a possibility that Boeing may choose to retain the Starliner business.

At this moment, Boeing is not looking to sell its overall space operations or offload its NASA contracts related to the International Space Station (ISS) and the Space Launch System (SLS), a massive rocket designed to eventually transport American astronauts back to the moon, the source added. Earlier reports from The Wall Street Journal suggested that Boeing was considering a sale of its NASA business.

A spokesperson for Boeing stated via email that the company does not comment on market rumors or speculation.

Divesting from the Starliner program would allow Boeing to step away from a program that has faced significant challenges, leading to over $1.8 billion in costs. This includes $250 million incurred during the third quarter due to a failed flight test, which has resulted in two American astronauts being stranded at the space station for several months.

The evaluation of Starliner comes as Ortberg is also navigating through a disruptive six-week labor strike that has halted the production of essential jetliners, including the profitable 737 Max. This labor disruption is further straining the company's finances, pushing its credit ratings close to junk status, with worsening cash burn projected to continue into 2025.

Ortberg has conveyed a desire to focus resources on Boeing's main commercial aircraft and defense sectors, aiming to simplify a complex portfolio. He has initiated a review of Boeing's business units, which he anticipates concluding by year-end.

“We’re better off doing less and doing it better than doing more and not doing it well,” Ortberg stated during Boeing’s earnings call on October 23.

Prior to the most recent setbacks, the prospects for Starliner seemed uncertain, with only a plan for a handful of additional missions to the ISS on the horizon for NASA. While Starliner faced multiple delays, SpaceX's competing Crew Dragon capsule successfully completed 43 missions to the ISS since 2019, transporting both crew and cargo for NASA.

Stepping away from its space endeavors would represent a significant change for Boeing, a company that has played a pivotal role in America’s aeronautical history. Boeing’s legacy extends back over 50 years to its involvement with the Saturn V rocket, which initially transported humans to the moon, and also includes contributions such as building satellites, the covert X-37B space plane, the SLS moon rocket, and managing the ISS.

However, in the past decade, Boeing has fallen behind in technological advancements compared to emerging players like SpaceX and other new space companies that have pioneered reusable rocket technology. As the ISS approaches retirement, Boeing and Lockheed Martin have also been exploring potential buyers for their United Launch Alliance joint venture throughout the past year.

As of 3:01 PM in New York on Friday, Boeing’s shares remained relatively stable.

Boeing, Starliner, NASA