Importance Score: 65 / 100 🔴
BOSTON— Boeing executives report progress in managing expenses associated with their CST-100 Starliner spacecraft, a commercial crew vehicle. However, specific details regarding the technical advancements to prepare the spacecraft for its upcoming voyage remain limited. The Boeing Starliner program aims to provide reliable transportation to the International Space Station, and cost efficiency is crucial for its long-term success.
Starliner Cost Management: Boeing’s Perspective
During an April 23 earnings discussion concerning the company’s financial outcomes for the first quarter, Boeing Chief Executive Officer Kelly Ortberg identified Starliner as one of the company’s fixed-price programs experiencing improved cost administration following substantial overruns.
In 2024, Boeing absorbed $523 million in charges related to Starliner due to launch postponements of the Crew Flight Test (CFT) mission and subsequent spacecraft malfunctions after launch. Throughout the program’s duration, charges against Starliner have surpassed $2 billion.
Despite these challenges, the firm did not declare further deficits related to Starliner in the first quarter. The company communicated in a 10-K filing with the U.S. Securities and Exchange Commission that they are persistently advancing toward crew certification and resolving propulsion system anomalies. They also cautioned that vulnerabilities persist, and additional losses could be recorded in forthcoming periods.
Progress on Fixed-Price Contracts
Ortberg stated in the earnings discussion that the company is making “real good progress” on fixed-price contracts such as Starliner as well as certain military aircraft programs.
He believes that all of the mentioned programs are now “well contained” with regard to the anticipated expenses required for their completion, also referred to as estimate to complete, or ETC. While stating that there is still much work to be done on the ETCs of many of these programs, Ortberg expressed confidence in the disciplined cost risk management and proactive engagement with customers for mutually beneficial outcomes.
Ongoing Evaluations: Starliner’s Technical Challenges
The earnings call and SEC filing did not contain further discussion regarding Starliner, specifically progress in resolving thruster issues and helium leaks encountered during the CFT mission.
The Aerospace Safety Advisory Panel was similarly reserved during an April 17 public assembly concerning progress on Starliner. According to panel member Paul Hill, the committee engaged in an “informative discussion” with NASA’s commercial crew program as part of their quarterly meeting, but specified that most of the details are not publicly available.
NASA and Boeing’s Collaborative Assessment
He explicitly expressed that NASA and Boeing are continuously investing in investigating the Starliner anomalies observed from the CFT mission and that this undertaking is expected to persist into the summer. These efforts involve multiple teams analyzing the factors that resulted in those problems not being detected sooner in design and development of the spacecraft or in analysis from its two previous uncrewed flights.
- Examination of the Starliner anomalies from the CFT mission
- Assessment of design and development processes
- Analysis of uncrewed flights data
Contract Performance Concerns
Hill raised concerns regarding NASA’s perception of companies participating in commercial service contracts, such as the commercial crew program, as “partners” rather than “vendors,” suggesting that this “leads to a very strong bias to be supportive” of the company. According to Hill, this perception might have hindered the identification of problems earlier “and could have influenced better contract performance.”
Decision Pending on Crewed Flight
Hill added that NASA has yet to determine whether astronauts will be on the next Starliner flight. In March, NASA officials suggested they planned to execute another Starliner assessment flight before utilizing the spacecraft for International Space Station crew rotation missions, but they were still analyzing the possibility of this flight being crewed. He specified that the final judgment “may well be informed by this remaining work” scheduled throughout the summer.
Strategic Review and Divestitures
The future of Starliner itself was questioned last year due to the issues encountered during the CFT mission and Mr. Ortberg’s announcement, shortly following his appointment as chief executive last year, of a strategic review of the company’s business lines that could result in divesting some business ventures outside of its core activities in commercial aviation and defense.
Boeing declared on April 22 that it would be selling a segment of its digital aviation solutions business to the investment firm Thoma Bravo for $10.55 billion. During the earnings discussion the next day, Ortberg implied there weren’t any other divestitures of comparable magnitude in the works.
He elaborated that the company is contemplating selling a “couple more” divisions, but these would be smaller than the digital aviation solutions sale. “I am done with the review, so I have our mind on what we need to do here. I think a couple more smaller activities are probably in the cards, and we’ll just have to see how those play out over time.” he said.