Despite 311 Pages of Criticism, NASA Still Won't Cancel the Boeing Starliner

NASA is not happy with Boeing (BA +2.50%).

A little over six years ago, Boeing flew the first uncrewed Orbital Flight Test of its new CST-100 Starliner, attempting to dock the spacecraft with the International Space Station (ISS) – and failing. Two years later, Starliner did successfully reach ISS (albeit with some glitches along the way). But when Boeing went for three in 2024 – this time with astronauts on board – it ended up stranding the astronauts on ISS for months longer than planned until they were finally rescued by a SpaceX spacecraft.

Starliner hasn’t flown since… and a new NASA report raises doubts about whether it should ever fly again.

Image source: Boeing.

What NASA says about Starliner

This new NASA report, titled the “Starliner Propulsion System Anomalies during the Crewed Flight Test Investigation Report,” runs to 311 pages and describes how “technical, organizational, and cultural contributors” all added up to a failed Crewed Flight Test (CFT) for Boeing in 2024.

NASA identified four key hardware defects with the Boeing spacecraft: Five thrusters failed on the service module and one on the crew module. Seven of eight helium manifolds had leaky seals. Finally and perhaps most critically, redundancy was lacking in the spacecraft’s propulsion system, such that more than one material failure might have been enough to prevent a safe return to Earth. As NASA associate administrator Amit Kshatriya commented, “[W]e almost did have a really terrible day.”

NASA further faulted Boeing for inadequate testing of the hardware and misdiagnosis of anomalies in Starliner’s previous flights. This was worsened by NASA’s poor oversight of Boeing’s work.

Ultimately, NASA decided to classify the CFT mission as a “Type A mishap,” which can encompass disasters such as the loss of a spacecraft and even crew fatalities. In the instant case, NASA chose “mission failure” as the best description of the incident, based on Starliner losing flight control when docking.

Citing “critical vulnerabilities” discovered with the spacecraft – as well as in how Boeing built it and how NASA oversaw its construction – NASA issued 61 separate formal recommendations for next steps to address the problems it revealed.

And yet, NASA did _not _cancel the Starliner program outright.

Starliner wins a reprieve

New NASA administrator Jared Isaacman explained that “America benefits from competition and redundancy.” In so doing, he highlighted two reasons NASA might want to give Starliner (yet another) chance to work:

First, so that SpaceX doesn’t become NASA’s sole source of transportation to and from ISS – leaving the space agency with no alternatives if SpaceX’s Falcon 9 rockets are grounded for some reason. And second, so that SpaceX cannot charge whatever it wants for this service. So long as Boeing is even just _technically _a rival in this race, SpaceX must compete on price to win its contracts.

But this does not mean NASA is happy with the situation.

“NASA will not fly another crew on Starliner until technical causes are understood and corrected, the propulsion system is fully qualified, and appropriate investigation recommendations are implemented,” says Isaacman. At best, this means the Boeing spacecraft might be used only for uncrewed cargo runs to and from ISS – or not at all – until the anomalies have been addressed.

That said, there’s still a potential worst-case scenario that investors need to anticipate.

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Time’s running out for Starliner

When Boeing was first awarded its $4.2 billion Commercial Crew contract to shuttle astronauts to and from ISS back in 2014, the contract terms envisioned Boeing flying six crewed missions. SpaceX was also awarded six missions (but only $2.6 billion) and has actually flown 13 (with one more scheduled).

At NASA’s current launch rate of two crewed missions per year, with ISS scheduled for retirement after 2030 (although that date may be extended to 2032), there’s really only time left for perhaps nine more flights total (or 13 if ISS retires in 2032). Assuming future flights are divided evenly between the two contractors, the only way I see Boeing running all six flights it’s been allotted (and collecting all $4.2 billion it was awarded) is if ISS _does _get extended through 2032.

Conversely, if ISS goes away in 2030, Boeing’s going to miss out on at least $1 billion in expected revenue – maybe even more if it takes too long to get Starliner fixed.

Granted, Boeing’s a giant company, doing nearly $90 billion in annual revenue. If its Starliner troubles cost it $1 billion in lost revenue, I think the company will survive just fine. Still, $1 billion is not nothing; the loss is still going to sting.

And the biggest loss of all will be to Boeing’s reputation as a space company.