Boeing Co. (NYSE:BA) faces significant challenges in its ambitious space endeavors, particularly with its Starliner program. Following NASA’s decision to favor SpaceX over Boeing’s Starliner for astronaut transport back from the International Space Station, Boeing’s newly appointed CEO, Kelly Ortberg, must navigate a difficult financial landscape and make critical strategic decisions. The future of the Boeing Starliner program, once a key component of the company’s space strategy, hangs in the balance as Ortberg assesses the costs and benefits of continuing this troubled initiative.

NASA’s Decision and Its Impact

NASA’s recent decision to use SpaceX for astronaut transport, instead of Boeing’s Starliner, delivered a major blow to Boeing’s space division. This choice came after extensive testing and deliberations, with NASA ultimately concluding that SpaceX offered a safer alternative. This setback adds to the difficulties Boeing has faced this year, including challenges with the 737 Max and leadership changes. The Starliner program, already delayed by seven years, has become a major source of concern amidst Boeing’s ongoing financial struggles.

Kelly Ortberg, who recently assumed the role of Boeing’s CEO, now faces the daunting task of deciding the future of the Boeing Starliner program. With Boeing’s stock having already declined by approximately one-third since the beginning of the year, Ortberg’s decisions in the coming months will be crucial in shaping the company’s trajectory. The question on many analysts’ minds is whether Boeing can continue to justify the costs associated with the Starliner program or if it will ultimately withdraw from the venture.

Financial Strain and Strategic Dilemmas

The Boeing Starliner program has been plagued by cost overruns and technical issues, with the company incurring an additional $1.6 billion in costs due to delays and problems with the spacecraft’s propulsion systems. These challenges have raised questions about the long-term viability of the program, especially as Boeing faces an expected cash burn of at least $5 billion this year.

While NASA hasn’t completely ruled out Boeing’s Starliner, the agency has indicated that another test flight might be necessary before the spacecraft is certified for crewed missions. This additional testing could cost Boeing another $400 million, further straining the company’s finances. For Ortberg, who has been tasked with turning Boeing around, these financial pressures make it increasingly challenging to justify continued investment in the Starliner program.

Analysts like Robert Spingarn of Melius Research have pointed out that the decision to proceed with Starliner is not solely about finances but also about Boeing’s broader commitment to human spaceflight. The possibility that Boeing might abandon the program due to its complexity and inability to recoup its investment is a real concern. This decision would have significant implications, not just for Boeing but also for NASA’s commercial crew strategy, which was designed to provide multiple spacecraft options for transporting astronauts and cargo.

The Future of the Starliner Program

As Boeing’s leadership confronts these challenges, the future of the Starliner program remains uncertain. Ortberg’s ability to assess the program’s viability and make tough decisions will be crucial. While some within Boeing and NASA still see value in the Starliner as part of a multiplayer strategy for space exploration, the financial realities cannot be overlooked.

Boeing’s role as NASA’s primary contractor for the ISS and other space missions, such as the development of the moon rocket and the operation of the X-37B spaceplane, adds another layer of complexity to this decision. Exiting the Starliner program could weaken Boeing’s position in the space sector, but continuing with the program could further strain its already challenged balance sheet.

Conclusion

The Boeing Starliner program represents a significant crossroads for Boeing under the leadership of Kelly Ortberg. As the company navigates its financial and strategic challenges, the decisions made about Starliner will have far-reaching implications for Boeing’s future in the aerospace industry. Whether Boeing can overcome these hurdles and continue its commitment to human spaceflight or whether it will need to make the difficult choice to step back from the Starliner program remains to be seen. As Ortberg faces these tough choices, the outcome will be pivotal in determining Boeing’s role in the next chapter of space exploration.