By Joey Roulette

WASHINGTON (Reuters) – NASA’s decision to send Boeing’s Starliner capsule home without astronauts follows years of missteps by the planemaker in its space business and raises doubts over the future of the unit, analysts and industry sources said.

Taking NASA astronauts Butch Wilmore and Suni Williams to the International Space Station (ISS) was to have been a turning point for Starliner after years of delays, technical glitches and supply chain mishaps. Starliner has cost Boeing $1.6 billion in overruns since 2016, according to a Reuters analysis of securities filings.

The astronauts were to stay at the ISS for about eight days, but problems with Starliner have extended that to eight months.

Starliner’s propulsion system malfunctioned and NASA deemed the troublesome thrusters unsafe for the return journey. So Wilmore and Williams will be brought home in a SpaceX Crew Dragon capsule next year, the latest humiliation for Boeing at the hands of Elon Musk’s dominant space company.

The mission was meant to be a final test before NASA could certify Starliner for routine flights. Boeing’s new CEO Kelly Ortberg now must decide whether to keep pouring money into Starliner, which analysts doubt will ever be profitable, or to unravel the capsule business and focus on rebuilding the tarnished reputation of its core planemaking division.

Elsewhere in its space business, U.S. government watchdogs have repeatedly reported Boeing is years behind schedule and several billions of dollars over budget as main contractor on NASA’s giant Space Launch System (SLS) rocket, a centerpiece vehicle of America’s moon program.

And the aerospace giant is already trying to sell a separate rocket launching firm it jointly owns with Lockheed Martin, Reuters reported last month.

NASA administrator Bill Nelson said he spoke to Ortberg on Saturday and left that conversation 100% sure Starliner would fly astronauts again. But that is no guarantee of a long-term commitment if Starliner’s troubles persist.

Asked whether Boeing would stay in the program after Starliner’s current mission, a Boeing spokeswoman declined to comment, telling Reuters the company is focusing on getting the spacecraft back safely.

“I am not sure the decision will ultimately be NASA’s. Boeing is going to have to foot much of this bill, as they have been,” said Lori Garver, former NASA deputy administrator who was a key architect of NASA’s Commercial Crew Program.

Ortberg, who started as CEO this month, is busy trying to convince Boeing workers, investors, airline customers and the flying public that safety issues are under control after a panel dramatically flew off a 737 MAX jet in midair in January.

Analysts said Boeing will probably keep Starliner alive, partially because Boeing has experienced worse in other programs in its defense business. In the future, Starliner could serve customers other than NASA, such as private space stations meant to replace the ISS after 2030, but those efforts could change.

NASA’S BIND

NASA sees Boeing as a crucial backup to Musk’s SpaceX, the only entity capable of putting humans in orbit other than U.S. rivals Russia and China.

Boeing has spent more than half of its $4.5 billion NASA contract awarded in 2014 and Starliner has yet to be certified. The contract, which has swelled by $300 million despite its fixed-price structure, includes six post-certification Starliner missions that will fall farther behind schedule with each mishap.

SpaceX’s Crew Dragon was certified in 2020 and has flown 10 crewed missions for NASA since signing a contract initially worth $2.6 billion. NASA has bought more Crew Dragon missions to make up for Boeing’s delays, boosting SpaceX’s contract to $4.9 billion.

Boeing may have to re-do the astronaut mission to the ISS in order to get the space capsule certified by NASA. The company already had to repeat an uncrewed 2022 mission at a cost of nearly $500 million.

“I wouldn’t rule anything out. We have options for how we move forward,” NASA’s space operations chief Ken Bowersox, a former astronaut, told reporters on Saturday when asked if Starliner can be certified without a do-over. He did not specify the options.

It has been five years since the Starliner’s first uncrewed test failed because of several critical software glitches. Since then, SpaceX has outpaced Boeing in rocket launches, crewed space flight and satellite manufacturing.

NASA’s inspector general has estimated Crew Dragon’s mission price as around $55 million per seat, while Starliner’s is around $90 million.

DEEP PROBLEMS

For years, Boeing’s space unit has suffered an exodus of skilled staff; many have joined SpaceX and Jeff Bezos’ Blue Origin. Boeing’s clunky supply chain makes designing spacecraft more complicated than for Musk’s more nimble, largely vertically integrated operation, according to 10 people who have worked with Boeing’s space unit.

Boeing, in a statement to Reuters, said the company is proud of its Starliner workforce and noted that it has acknowledged the workforce and supply chain challenges on earnings calls.

Throughout Starliner’s development, the hardware and sometimes the software of the propulsion system have been persistent issues. New problems were found just hours before the spacecraft made an initial attempt to launch this summer. Helium, used to pressurize the propellant, was leaking through a small seal in a flange.

NASA saw the leak as low-risk and allowed Starliner to launch. Yet officials said the propulsion system had a “design vulnerability” Boeing must address before its next mission.

The Space Launch System (SLS) rocket is another problem for Boeing’s space unit. An August report by NASA’s inspector general cited deep issues with quality control, while saying Boeing’s SLS workforce in Michoud, Louisiana “lacks sufficient aerospace production experience, training, and instruction.”

A Boeing spokeswoman said the company disagrees with many of the report’s “assertions, including any suggestion that our Michoud workforce is unqualified.”

Unlike Starliner, NASA foots the bill for delays and development problems with SLS. The extent of cost overruns are unclear because NASA does not accurately track them, inspector general reports have repeatedly said.

NASA is trying to hand ownership of SLS to Boeing and co-contractor Northrop Grumman to bring the costs down, but that appears unlikely.

“Boeing’s other businesses aren’t terribly vulnerable to disruption. But space? That’s another story,” said Richard Aboulafia, an aerospace analyst.

Aboulafia believes Ortberg will crunch the numbers and negotiate with NASA to make Starliner viable, although he is not convinced that is the right step.

“If I were an advisor to Kelly Ortberg, which I’m not, I’d say… for space, well boss, you might want to consider selling it,” said Aboulafia.