Boeing Faces Additional Financial Setbacks for Starliner Program in Q4

Boeing Starliner Program Faces Financial Setbacks in Q4 | Mr. Business Magazine

Boeing has announced that it expects to face further financial setbacks related to its Boeing Starliner Program when it releases its fourth-quarter financial results for 2024.

In a statement issued on January 23, the company provided preliminary financial projections for the fourth quarter. These included an estimated $1.7 billion in charges against earnings across five programs within its Defense, Space, and Security division.

Significant Charges for Key Programs

The largest portion of the charges will be allocated to two major programs: $800 million for the KC-46A tanker and $500 million for the T-7A trainer aircraft. The remaining $400 million in charges will cover the Boeing Starliner Program as well as the VC-25B presidential aircraft and the MQ-25 drone.

Similar guidance was issued for the third quarter in October 2024, where Boeing initially projected $2 billion in charges. Of this amount, $1.6 billion was assigned to the KC-46A and T-7A programs, with $250 million in charges attributed to the Starliner program in that quarter.

The company has not provided further details on the anticipated charges for the fourth quarter. The full financial report is scheduled for release on January 28.

Starliner Updates Remain Limited

Boeing and NASA have offered few updates on the status of the Starliner spacecraft since its uncrewed return to Earth in September 2024, marking the completion of the Crew Flight Test mission. During the mission, NASA raised concerns about malfunctioning thrusters that occurred while the spacecraft was en route to the International Space Station (ISS). Despite these issues, Starliner landed safely in White Sands, New Mexico.

In October, NASA announced it was postponing the first operational Starliner mission to beyond 2025. In the meantime, the agency has opted to use SpaceX’s Crew Dragon spacecraft for upcoming ISS missions. The Crew-10 mission is now scheduled to launch in March, followed by Crew-11 in late summer.

NASA stated that the timeline and configuration for Starliner’s next flight would depend on Boeing’s progress toward system certification. The agency has kept various options open, including potential Starliner flight windows in 2025, but no further updates on its status have been provided since October.

Boeing’s Strategic Review and Industry Speculations

Boeing has also not released any new information regarding its ongoing review of business operations, which was last discussed during its October earnings call. At that time, CEO Kelly Ortberg mentioned that the company was exploring ways to streamline its business by potentially discontinuing non-core activities in areas outside of commercial aviation and defense. Ortberg emphasized the importance of focusing on Boeing’s main objectives and eliminating distractions.

A report issued on January 23 by venture firm Space Capital predicted that both Boeing and Airbus might divest their space divisions this year. According to the report, such divestitures could represent a pivotal moment for the space industry, reshaping the competitive landscape and creating new risks and opportunities for government space capabilities.

Challenges Ahead for Starliner

Boeing Starliner program faces mounting financial challenges and operational delays, making its future uncertain. NASA and Boeing must work together to ensure the spacecraft meets the necessary certification requirements, but the delays have already shifted focus to other providers like SpaceX.

With significant changes projected in its upcoming financial results and ongoing scrutiny of its space operations, Boeing is navigating a critical period that could influence its role in the evolving space industry.

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