Faced with financial losses, Boeing is considering selling its space division, including the Starliner program, to refocus its activities.

Boeing is going through a major financial crisis, exacerbated by delays and cost overruns in its space and defense programs. The Starliner program, designed to transport astronauts to the ISS, has suffered numerous failures, prompting Boeing to consider selling it to alleviate its financial situation. Boeing’s new CEO, Kelly Ortberg, is focusing his strategic refocus on key projects. The sale of non-priority programs like Starliner would enable Boeing to stabilize its finances and focus on core initiatives like the Space Launch System (SLS), essential for NASA’s lunar missions.

Financial crisis and strategic choices: Boeing redefines its priorities

For several years now, Boeing has been facing a major financial crisis. The company is impacted by constant delays and exponential costs in its defense and space divisions, compounded by a prolonged machinists’ strike affecting its commercial airplane production. These financial difficulties are all the more worrying given that the defense and space programs were supposed to offset the drop in sales in civil aviation, a sector already in difficulty since the COVID-19 pandemic.

The loss of competitiveness of the Starliner program epitomizes these challenges. Designed to compete with SpaceX’s Crew Dragon spacecraft, Starliner was initially launched in 2014 with the aim of a first manned mission as early as 2017. However, technical failures have been piling up: the initial cost of the project has more than doubled, reaching around 4.2 billion euros, while full mission completion still remains uncertain. This context is prompting Boeing to reassess its commitment to the space sector, and to consider selling some of its activities to improve profitability.

Putting Starliner up for sale: a strategic repositioning

To lighten its load, Boeing is considering selling off under-performing programs, notably Starliner, which was to carry up to seven astronauts to the ISS. Initially intended as an alternative to the Russian Soyuz capsules, this spacecraft has encountered numerous technical obstacles. The last major failure, in June 2023, involved a thruster failure during a test flight, making any manned mission risky. This incident cost an additional 50 million euros for repairs and additional testing, adding to the program’s negative balance sheet.

Boeing is said to be in talks to sell Starliner, notably to companies such as Jeff Bezos’ Blue Origin, which are keen to strengthen their capabilities in manned space transportation. If these negotiations are successful, they will enable Boeing to reduce its financial liabilities and alleviate part of its operating expenses, which currently reach over 5 billion euros in annual spending on space programs.

The Space Launch System: a strategic program maintained

In spite of the difficulties encountered, Boeing is maintaining projects considered as priorities, such as the Space Launch System (SLS), a super-heavy launcher developed in partnership with NASA. This program is essential for lunar exploration projects, in particular for the Artemis mission scheduled for the coming years. The SLS represents a strategic investment of around €23 billion** for Boeing and NASA, spread over several years, with the aim of launching regular missions to the Moon and potentially Mars.

Maintaining the SLS underscores the approach of Boeing’s new CEO, Kelly Ortberg**, who wants to refocus the company on priority initiatives. This strategic refocusing is accompanied by a rationalization of costs, the aim being to minimize spending on unprofitable projects and concentrate efforts on programs with high potential for profitability and innovation.

Impact on Boeing and the US aerospace industry

The divestment of Starliner and other programs could mark a turning point in the US aerospace industry, with Boeing gradually losing its leadership role in certain sectors. Abandoning non-performing programs would enable Boeing to stabilize its financial situation, but could also provide opportunities for competitors such as SpaceX and Blue Origin to strengthen their position.

The economic effect could also be felt by Boeing’s subcontractors and suppliers, particularly in the defense and space sector, where contracts are worth hundreds of millions of euros a year. For the U.S. government, a refocusing of Boeing’s priorities could require increased support for other players to ensure the continuity of space exploration programs.

A more limited but consolidated future for Boeing

Boeing’s repositioning is essential if it is to overcome its current financial difficulties and sustain its strategic activities. By concentrating its efforts on projects like the SLS, Boeing is seeking to maximize its chances of success in space exploration projects, while reducing the financial risks associated with non-performing programs.

Boeing’s future in the space sector now rests on tighter cost management and a refocusing on the most profitable programs. This choice, though difficult, could pay off in the long term, enabling the company to maintain its role as a trusted partner to NASA and to reposition itself on projects where it has a competitive advantage.

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