By Niraj Chokshi

Sept. 7, 2024

Space programs are a small part of Boeing’s business, which is dominated by sales of commercial and military planes and equipment. But the work is a point of pride: Boeing has long been involved in spaceflight, going back to the first mission to take an American to space.

Boeing’s efforts to add to that space heritage are in doubt.

The company’s Starliner capsule returned to Earth safely from the International Space Station on Friday night, but without the two astronauts it took up there in June because NASA was concerned about thrusters on the capsule that had malfunctioned before it docked at the station.

A decade ago, NASA chose Boeing and an upstart rival, SpaceX, to ferry astronauts to and from the space station. SpaceX has since carried out seven of those missions and will bring home the astronauts Starliner left behind, while Boeing has yet to complete one. And with the station set to retire as soon as 2030, time is running out.

“It’s unclear if or when the company will have another opportunity to bring astronauts to space,” Ron Epstein, an aerospace and defense analyst at Bank of America, said in a research note last month. “We would not be surprised if Boeing were to divest the manned spaceflight business.”

On Thursday, asked to comment on Starliner’s problems and the future of its space business, Boeing responded with this statement: “Boeing continues to focus, first and foremost, on the safety of the crew and spacecraft. We are executing the mission as determined by NASA, and we are preparing the spacecraft for a safe and successful uncrewed return.”

Boeing’s troubles could be a setback not only for the company but for the U.S. space program more broadly, which wants multiple private companies available to ably support its efforts.

The commercial space sector is thriving, driven in part by SpaceX, which is led by Elon Musk and has made launches cheaper and more frequent; Blue Origin, which was founded by Jeff Bezos of Amazon; and others. But only a few companies like Boeing and SpaceX are technically and financially capable of supporting NASA’s most ambitious, expensive and difficult projects.

In addition to Starliner, Boeing built the major U.S. portions of the International Space Station, makes government and commercial satellites, is contributing crucial components to NASA’s mission to return astronauts to the moon and runs a rocket launching business with Lockheed Martin.

Space programs are extremely difficult, especially when they involve transporting people. The work is exacting. Repairs are arduous. And unexpected problems and missed deadlines are common, said Jason Gursky, an aerospace and defense analyst at Citi.

“Death, taxes and delayed space programs — those are things that you know are going to happen,” he said.

But for Boeing, such delays have proved costly. Starliner is one of five big programs in Boeing’s defense unit that the company agreed to develop at a fixed price but have ended up costing the company more than expected. Starliner alone has suffered at least $1.5 billion in cost overruns, including $125 million in the first half of this year — extra costs that will fall solely on Boeing, not NASA. A 2019 test flight could have ended in disaster because of software errors. The capsule has faced various other problems over the years, including with its parachute system, corrosion and a helium leak.

Still, NASA’s administrator, Bill Nelson, said at a news conference last month that he had “100 percent” faith that the capsule would carry astronauts again.

And on Saturday, the agency acknowledged that it could have used Starliner to bring back the astronauts aboard the space station, given the capsule’s smooth return trip.

“It would have been a safe, successful landing with the crew on board,” Steve Stich, manager of the commercial crew program at NASA, said at a news conference.

Problems elsewhere in the company may be driving some of the concerns with Boeing’s space programs. The company’s reputation was badly damaged by two fatal crashes of the 737 Max plane in 2018 and 2019. Then, in January, a panel blew off another 737 Max, renewing concern about the company’s commitment to safety and quality. But Boeing’s space work bears little connection to its commercial airplane unit.

SpaceX has pushed the industry forward, but has had its share of problems. Its Falcon 9 rocket suffered a rare but catastrophic failure in July. The Federal Aviation Administration also briefly grounded the rocket late last month because of a problem with one of its boosters.

In June, Airbus, Boeing’s main rival in the commercial plane business, announced a nearly $1 billion charge for the first half of the year because of technical challenges related to the company’s satellite programs. That company’s chief executive, Guillaume Faury, said Airbus would conduct a “bottom-up assessment” of its main space programs.

Last month, NASA’s inspector general raised concerns about another Boeing program that is building a core part of the agency’s ambitious plan to open a new era of lunar exploration, the Space Launch System rocket.

A Defense Department auditor had found that Boeing’s process to address quality control issues was “ineffective” and that the company had “generally been nonresponsive” in fixing repeated quality problems, the inspector general said in a report.

Boeing also did not have enough trained and experienced employees working on the program at NASA’s Michoud Assembly Facility in New Orleans, according to the report, which attributed those deficiencies to difficulty finding skilled workers in that region and failing to pay competitive wages. Boeing had tried to provide additional training, but the report described that effort as “inadequate.”

As a result, costs related to building an upgraded version of the rocket for a future mission are expected to be $700 million more than an initial $5 billion estimate. Its first flight, scheduled for September 2028, may also be delayed, the report concluded.

Boeing took issue with those conclusions, saying in a statement that it “disagrees with many of these assertions, including any suggestion that our Michoud work force is unqualified.”

Boeing and Lockheed Martin are also exploring a sale of their joint rocket-launching venture, the United Launch Alliance, according to Reuters and Bloomberg. Both companies declined to comment on those reports.

The space sector is thriving for a variety of reasons, including SpaceX’s role in making launches commonplace and more affordable, the miniaturization of technology and rising interest in smaller satellites that can be replaced more often.

For decades, satellite launches remained relatively steady at about 150 per year, according to the United Nations. But they began to increase in 2013, reaching nearly 2,600 last year, mostly from the United States and many of those by SpaceX. Several legacy aerospace companies — including Boeing, Lockheed and RTX, formerly Raytheon — have bought up makers of small satellites in recent years.

The size of the global space economy, most of it commercial, has nearly doubled over the past decade to about $570 billion last year, according to a report from the Space Foundation, a nonprofit that promotes space exploration, education and industries.

That thriving market has also contributed to rising competition for a limited pool of skilled workers, many of whom are attracted to jobs at newer companies where they have the opportunity to do interesting work right away, said Elliott Bryner, a professor of mechanical engineering at Embry‑Riddle Aeronautical University in Prescott, Ariz. In recent years, his students have gone to work at SpaceX and smaller rocket companies such as Ursa Major, Stoke Space and Firefly Aerospace.

For many students, NASA and more established aerospace companies hold less appeal these days, Dr. Bryner said. “What I’m hearing from my rocket students is they want to go to SpaceX, they want to go to Blue Origin, they want to go to one of these start-ups.”

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