US aerospace manufacturer Boeing has recorded an AUD19 billion loss for calendar 2024, helped in part by problems within its beleaguered space program.
“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” CEO Kelly Ortberg told employees.
Boeing’s space portfolio includes a legacy satellite program, the secret X-37B space plane, the SLS rocket, and the Starliner space vehicle. Starliner alone has resulted in AUD2.9 billion in cost overruns for Boeing since its inception. Since stepping into the CEO’s role in August 2024, Kelly has indicated the company may drop non-core programs.
“Think of it as more pruning the portfolio, not cutting down the tree,” he said during an earnings call this week.
Latest quarterly Starliner charge remains unknown
Starliner hit the headlines in 2024 when technical problems on its first crewed test flight prevented it from bringing the astronauts home from the International Space Station. It was another setback for Boeing and its space program.
This week, newly installed US President Donald Trump asked SpaceX to bring the “abandoned” astronauts home. SpaceX founder and CEO Elon Musk cheerily agreed to do so, even though NASA organised astronaut’s February return six months ago.
Ortberg had told former US President Joe Biden that Boeing wouldn’t walk away from Starliner, which NASA wants to see developed as an alternative to SpaceX’s Dragon space vehicles. However, he has not made the same promise to the new administration in Washington.
Boeing’s defence and space program, which includes conventional military aircraft ordered by the US Air Force, incurred an AUD2.73 billion charge for the last quarter of 2024. It is yet to say how much of that was due to the Starliner program. However, Boeing booked a USD401 million charge to its NASA Commercial Crew Program in the third quarter of 2024. Analysts expect the company to book a similar amount, or more, for the most recent quarter.
“We acknowledge that these are disappointing results,” Boeing CFO Brian West told the earnings call. “These are complicated development programs, and we remain focused on retiring risk each quarter, and ultimately delivering these mission critical capabilities to our customers.”
Space Capital predicts Boeing and Airbus will quit space
Space Capital, an early-stage venture capital firm that invests in promising space-related technologies released its latest investment trends report last week. The report predicts both Boeing and Airbus, which it describes as “entrenched government contractors,” will sell their space programs this year.
The venture capital firm says the divestitures would prove a “pivotal moment” in the space economy, change the competitive landscape, and create new opportunities.
However, Boeing involvement in space exploration dates back to the 1960s, building spacecraft and rockets for NASA. Ending that would sever seven decades of involvement with the US space program.
The Trump administration is expected to emphasise the space economy and greater integration of commercial space programs into government programs. At the moment, Musk, a close Trump ally and Boeing competitor, is shaping up as the key beneficiary. While Starliner flatlines, SpaceX’s rival vehicle, Starship, is likely to move from test to operational space flights this year.
