Boeing Takes Another Charge Against Earnings for Starliner

Boeing revealed today that it is taking another charge against earnings for its Starliner commercial crew program for taking NASA astronauts to and from the International Space Station. Starliner is a Public-Private Partnership with NASA through a fixed price contract, so Boeing must absorb any cost increases due to technical problems and resulting delays. Starliner’s Orbital Flight Test-2 succeeded in May, but it was far behind schedule.

In a second quarter 2022 financial earnings call this morning, Boeing officials said they took a $93 million charge for Starliner this quarter. An accompanying press release said:

“The Commercial Crew program also recorded a $93 million charge, primarily driven by launch manifest updates and additional costs associated with OFT-2.”

This is on top of $410 million in the fourth quarter of 2019 and another $185 million in the third quarter of 2021. All together, Boeing has had to cover $688 million in cost growth.

Boeing and SpaceX won contracts from NASA in 2014 to develop space transportation systems to take crews to and from the International Space Station — the Commercial Crew Program. The companies own the systems and sell services to NASA, whose intent is to be just one of many customers for these services.

NASA wanted two contractors to ensure redundancy and competition. Boeing was awarded $4.2 billion, while SpaceX received $2.6 billion.

SpaceX’s Crew Dragon has been operational since 2020. It is getting ready for its sixth NASA mission to ISS in September and also has flown two non-NASA crews to orbit with more non-NASA flights on the books.

Boeing has yet to launch a mission with a crew.

Its first attempt at an uncrewed Orbital Flight Test (OFT) of Starliner in December 2019 was less than successful. It decided to refly the uncrewed mission before putting astronauts aboard and was ready to fly OFT-2 in August 2021, but had to scrub just about two hours before launch due to the failure of 13 valves in the propulsion system.

OFT-2 finally made a successful flight in May. In the press call today Boeing President and CEO Dave Calhoun said the flight of OFT-2 was “an emotional up for all of us at Boeing to get back on track.”

Boeing and NASA are hoping the next step, the Crewed Flight Test, will happen at the end of this year or early next.  NASA said last month a schedule assessment would be made by the end of July on a date for CFT.