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Boeing has revealed it expects to lose another AU$380 million on its Starliner program.
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However, the aerospace giant’s CEO, Kelly Ortberg, appeared to commit to the commercial crew program, arguing that it wouldn’t be “a viable option” to walk away from so-called fixed-price programs.
NASA awarded Boeing a US$4.2 billion contract in 2014 to create a vehicle to carry astronauts to the International Space Station, alongside a similar US$2.6 billion contract to SpaceX.
The capsule’s first crewed mission, though, was forced to return without its astronauts in September following issues with its thrusters, in one of the most high-profile NASA safety incidents in decades.
Late last week, in a filing with the US Securities and Exchange Commission, Boeing disclosed it would take another charge against earnings of $250 million, in addition to the $125 million loss the company recorded in the second quarter.
“We’ve got some tough contracts and there’s no magic bullet for that. We’re going to have to work our way through some of those tough contracts,” Ortberg said on an earnings call.
“We’ve been carrying risks with these programs and I don’t think we’ve been doing enough work with our customers to figure out how to de-risk these things before it turns into an EAC (estimate at completion) overrun.”
The news comes shortly after Boeing revealed it would cut 10 per cent of the company’s overall workforce, or around 17,000 roles, within months.
In a sombre memo to staff, Ortberg said its defence and space division, in particular, would record “substantial new losses” this quarter, and the company would delay the launch of its new flagship aircraft, the 777X, until 2026.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” he wrote.
He added that the defence and space’s performance on fixed-price programs was “simply not where it needs to be”.
“We expect substantial new losses in BDS (Boeing Defence and Space) this quarter, driven by the work stoppage on commercial derivatives, continued program challenges and our decision to complete production on the 767 freighter. I will be providing additional oversight of this business and these programs.”
Despite Starliner returning uncrewed, the capsule itself returned safely in what many saw as a vindication for Boeing’s engineers.
Crucially, NASA reported no issues with its manoeuvres, with all 27 working thrusters performing as expected and the spacecraft following a “perfect trajectory” home.
Later, Steve Stich, manager of NASA’s commercial crew program, even hinted the spacecraft could still have a future despite its technical problems, declaring the “important” test flight would set up “future missions”.
Ken Bowersox, a NASA associate administrator, also praised the team for bringing Starliner back safely.
“Even though it was necessary to return the spacecraft uncrewed, NASA and Boeing learned an incredible amount about Starliner in the most extreme environment possible,” he said.
“NASA looks forward to our continued work with the Boeing team to proceed toward certification of Starliner for crew rotation missions to the space station.”
