Cost to Boeing of Starliner Delays Now Total Nearly $600 Million
by Douglas Messier
Managing Editor
Boeing said on Wednesday that it was taking an additional $185 million charge against earnings due to additional delays to its CST-100 Starliner spacecraft, which it is developing to take astronauts to the International Space Station (ISS).
The charge, announced as part of the company’s third quarter financial results, brings the total charges against earnings related to the troubled Starliner program to $595 million. Boeing took a $410 million charge in January 2020 to cover costs due to continuing delays.
The earlier $410 million charge against was due to the need to redo an uncrewed flight to ISS. Boeing first attempt to reach the station failed in December 2019 due to software and communications problems. A Starliner flew an abbreviated two-day mission in Earth orbit before landing at White Sands Missile Range in New Mexico.
Boeing had planned to launch an uncrewed Starliner on a second flight to the space station in August. However, engineers discovered that 13 of 24 valves controlling the use of oxidizer were stuck due to moisture seeping in and causing corrosion.
The investigation into the problem is continuing. Boeing is now hoping to complete the second uncrewed flight test to ISS during the first half of 2022. A crewed flight test to the station would follow about six months later.
Boeing won a $4.2 billion contract from NASA in 2014 to develop Starliner for crewed flights to the station. Because the contract was firm fixed cost, Boeing cannot pass on costs to NASA in the form of additional charges.
Boeing reported that it lost $132 million in the third quarter that ended in September. That amounted to a loss of 19 cents per share. The company cited quality control issues with its 787 Dreamliner jetliner.
5 responses to “Cost to Boeing of Starliner Delays Now Total Nearly $600 Million”
Leave a Reply
You must be logged in to post a comment.
Wonder how long Boeing is going to be able to sustain the losses given their other financial problems.
https://finance.yahoo.com/n…
Boeing (BA) Reports Q3 Loss, Misses Revenue Estimates
Zacks Equity Research
Wed, October 27, 2021, 7:55 AM
“Boeing (BA) came out with a quarterly loss of $0.60 per share versus the Zacks Consensus Estimate of a loss of $0.17. This compares to loss of $1.39 per share a year ago. These figures are adjusted for non-recurring items.”
I guess the question is, at what point does the Boeing board of directors feel the financial pain is too much to bear and pulls the plug. My bet is if Starliner losses reach $2.5 billion dollars before CFT happens. 🙂
Though Boeing would have to screw up really, REALLY badly to reach that level I think, so likely it won’t happen. More to the point, if Boeing pulls the plug on Starliner, they will likely never win any future NASA contracts ever again.
That ship may have sailed a while ago. They never even got to serious consideration for HLS, for example.
NASA might be the least of Boeing’s troubles given the campaign to reduce CO2 output. Then add in China is still a big customer and its economy is starting to crack from the demographic in-balance and high deb load…
https://www.bbc.com/future/…
How the rich are driving climate change
By Laura Paddison 27th October 2021
“Take aviation. “As soon as you fly, you belong to a global elite,” says Gössling. More than 90% of people have never flown and just 1% of the world’s population is responsible for 50% of emissions from flying. From the business elite crisscrossing the globe to the celebrities who have made travel part of their personal brands, their behaviour has helped make a high carbon lifestyle aspirational and desirable, says Gösslin”
“The last few years, however, have seen social norms start to shift. In Sweden, Thunberg’s activism helped inspire flygskam (the Swedish word for “flight shame”), a concept which led people to question how much they should be flying. The movement was linked to a 4% drop in the number of people flying from Sweden’s airports in 2018 – a rare fall at a time when global passenger numbers were increasing.
Covid-19, which dramatically curtailed business travel, proved that video
calls can replace in-person meetings. A Bloomberg survey found 84%
of businesses plan to spend less on work travel post-pandemic.”
The losses pale in comparison to the losses incurred with the screwups from the 787 and 737MAX. It’s almost noise compared to those programs. I would imagine that Starliner’s real revenue stream will be operations and MRO.