The latest announcement from NASA that it will no longer rely on the troubled Boeing Starliner capsule to bring back two stranded astronauts has dealt a significant blow to the company's reputation. The financial impact, although less severe, is likely to be substantial.
A Legacy of Safety Concerns
Boeing's woes began in 2018 and 2019 when two 737 Max airliners crashed, resulting in the loss of 346 lives. This catastrophic failure raised serious questions about the safety of Boeing's products. A panel blowing out of a 737 Max during a flight this January further compounded the company's issues.
Starliner Capsule Faces Safety Concerns
The Starliner capsule, designed to carry astronauts to and from the International Space Station, has been plagued by problems with its propulsion system. Despite recent tests showing improved performance, NASA administrators have deemed it safer for the astronauts to remain in space until February rather than risk using the troubled capsule.
Aerospace Industry Analyst's Perspective
Richard Aboulafia, an aerospace industry analyst, has termed the latest development as another "black eye" for Boeing. He believes that the reputational harm caused by this incident will linger longer than any financial losses. According to Aboulafia, the $25 billion loss incurred by Boeing since 2018 is a clear indication of its struggles.
A Shift in Leadership
Boeing has welcomed Robert "Kelly" Ortberg as its new CEO, replacing David Calhoun. As an outsider with experience leading Rockwell Collins, Ortberg may bring a fresh perspective to the company's leadership. Aboulafia is optimistic that this change will provide Boeing with a chance to redeem itself.
Defense and Space Business on the Rise
Despite its recent setbacks, Boeing's defense division has secured significant contracts. The company is set to deliver Apache helicopters to foreign governments, sell F-15 fighter jets to Israel as part of a $20 billion deal, and develop surveillance planes for the Air Force under a $2.56 billion contract.
Time to Rebound?
Aboulafia believes that Boeing's defense division will eventually return to profitability. The company's shift in leadership and recent wins may provide it with the necessary momentum to overcome its current challenges.