Boeing Losses $125 Million Amid CST-100 Starliner Program Delays

In a filing with the U.S. Securities and Exchange Commission (SEC) on July 31 regarding its second-quarter financial results, Boeing revealed an additional $125 million charge on its CST-100 Starliner commercial crew program. This charge is attributed to delays in completing the ongoing Crew Flight Test (CFT) mission, which has faced multiple setbacks.

Boeing has endured approximately $1.6 billion in charges related to the Starliner program, the majority of which have accumulated since a flawed initial uncrewed test flight in late 2019. Notably, the company incurred a $288 million loss on Starliner in 2023, including $257 million in the second quarter of last year after the CFT mission was delayed to 2024.

During a July 31 earnings call, Boeing did not discuss the specifics of the Starliner program. However, the company acknowledged that the losses were part of $1 billion in charges on fixed-price programs within its Defense and Space business unit. These charges included work on the KC-46A tanker aircraft and VC-25B aircraft, which will serve as the next Air Force One.

“Clearly, the results this quarter are disappointing...We expected the fixed-price development programs to remain bumpy until we complete the development phase and transition to mature long-term franchise programs.” - Dave Calhoun, Outgoing Chief Executive of Boeing

This experience has made Boeing cautious about undertaking future fixed-price work in its Defense and Space business unit.

“Based on the lessons that we’ve learned in taking on these fixed-price development programs, we have maintained contracting discipline for all future opportunities,” - Dave Calhoun, Outgoing Chief Executive of Boeing

Boeing has not dismissed the possibility of further losses on the Starliner program, particularly as the first operational mission, Starliner-1, has been postponed from February 2025 to no earlier than August 2025.

“Risk remains that we may record additional losses in future periods,” - Company SEC Filing.

The latest loss comes as Boeing and NASA work to conclude the CFT mission, anticipated to occur sometime in August. On July 27, controllers ignited 27 reaction control system (RCS) thrusters on the spacecraft while it remained docked to the International Space Station (ISS). These tests aimed to verify the thrusters' performance after nearly two months in space, following reports of degraded performance from several RCS thrusters during the spacecraft’s approach for docking in June.

“Preliminary results show all the tested thrusters are back to preflight levels based on thrust and chamber pressure,” - NASA

As of now, NASA and Boeing have not scheduled a specific date for Starliner’s return. NASA noted in its statement that engineers are still reviewing data from ground tests of the RCS thrusters. Following this analysis, NASA will conduct an agency-level review before selecting a return date for Starliner.

In a statement released on July 31, Boeing mentioned that preparations for Starliner’s return are in progress. This includes an “integrated simulation” involving ground controllers and CFT astronauts Butch Wilmore and Suni Williams. Additionally, the ISS’s robotic arm inspected Starliner’s exterior, a standard procedure for visiting vehicles before their departure. Boeing indicated that this work supports “potential returns throughout August.”

As Boeing continues to navigate the challenges of the Starliner program, the company remains focused on completing the CFT mission and addressing any further issues that may arise.