Investing in Space

Boeing takes $410 million charge to redo failed astronaut flight test if NASA requires

Key Points
  • Boeing revealed on Wednesday that it took a $410 million charge last quarter in case NASA requires another uncrewed flight test of the company's Starliner capsule.
  • "NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required," Boeing said.
  • NASA has awarded Boeing nearly $5 billion to develop Starliner, which is built to carry as many as five people.

Boeing revealed on Wednesday that it took a $410 million charge last quarter in case NASA requires the company to re-fly last month's failed astronaut test mission.

"NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required," Boeing said in its earnings release.

The $410 million charge caused Boeing's Defense, Space & Security unit to see a 0.5% decrease in fourth-quarter operating margin.

Although Boeing successfully landed its Starliner spacecraft after the mission, the flight test was cut short and did not achieve its objective of docking with the International Space Station. The capsule was supposed to fly to the space station, deliver cargo and return – to demonstrate its capabilities and safety. But, after an issue with its autonomous flight control system during the launch, Starliner's engines fired at the wrong time and the capsule ended up in a different orbit than planned.

No one was on board Starliner, as this flight was intended to be one of the final tests before NASA flies astronauts. NASA has awarded Boeing nearly $5 billion to develop Starliner, which is built to carry as many as five people.

NASA administrator Jim Bridenstine wrote in a blog post earlier this month that the agency and Boeing had formed an independent task force to investigate the issues from Starliner's orbital flight test. He said the investigation will likely take about two months, with a final assessment expected in March.

Here's what went wrong with the Boeing Starliner spacecraft
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Here's what went wrong with the Boeing Starliner spacecraft

Although Boeing has set aside the funds for a second uncrewed flight, NASA spokesperson Joshua Finch said the agency has not yet decided whether it will require Boeing repeats the test.

"NASA and Boeing still are working through a joint investigation into the primary anomalies experienced during the company's Orbital Flight Test ... at this time, no decision has been made," Finch told CNBC in a statement.

Starliner's mission in December lasted just over two days in total. Boeing told press that the company was able to still conduct tests of many parts of the spacecraft while in orbit, saying the vehicle's systems such as flight control and life support were all working well in orbit. But, due to Starliner's software issues, NASA said it will review the flight test's data "to determine if another uncrewed demonstration is required."

In 2014, NASA awarded development contracts for the commercial crew program to SpaceX and Boeing. Future commercial crew contracts will be up for grabs, as NASA would look to buy seats on Boeing's Starliner capsule and SpaceX's Crew Dragon.