BA Boeing Co

Company warns of potential charge as it pushes back its plans another six months

By Doug Cameron and Andy Pasztor 

Boeing Co. said Tuesday that it has delayed the first manned flight of its new space taxi for the second time this year and could take a financial charge against the program as early as its third-quarter results.

The company has pushed back the first crewed flight of its CST-100 Starliner capsule by another six months to mid-2018 because of supplier and technical issues and said there were cost implications to the move.

A Boeing spokesman declined to quantify the potential amount. "We are assessing the financial impacts of the schedule change as part of the quarterly earnings process," he said.

The potential charge would upset analysts' expectations for Boeing to have a "clean" third-quarter earnings report on Oct. 26. The company has taken a succession of charges against its military tanker program and the 747-8 jumbo jet because of design problems and slow sales, respectively.

Boeing and Elon Musk's Space Exploration Technologies Corp. are vying to be the first to resume crewed flights with U.S. spacecraft since the end of the space shuttle program in 2011.

The Starliner was originally due to fly with crew by the end of next year, but Boeing defense and space chief Leanne Caret revealed at its investor day in May that this would slip into 2018, with the company later flagging February as the likely first date.

Boeing said technical issues, some of which emerged just last month, would push back the first unmanned flight to June 2018, with a crewed flight following in August.

The new delay was reported earlier by Aviation Week.

Boeing's admission of a further delay comes weeks after a government agency warned that both Boeing and SpaceX would likely have to push back their first crewed flights. The Office of Inspector General last month said any delays could force the National Aeronautics and Space Administration to buy more seats on Russian Soyuz flights to and from the international space station.

SpaceX hopes to fly its Crew Dragon capsule for the first time next year, though it is still investigating the launchpad explosion of one of its Falcon 9 rockets last month.

"We continue to review and analyze data from the anomaly," said a spokesman. "We expect to stay on track with our Commercial Crew milestones with NASA, but we'll better know how our schedule will be impacted once the investigation is complete and we get back to flying."

Boeing in 2014 received a contract worth as much as $4.2 billion for its capsule, with SpaceX winning a separate pact valued at up to $2.6 billion to develop, test and fly space taxis to carry U.S. astronauts into orbit.

Even before Tuesday's announcement, Boeing officials signaled that engineering challenges -- particularly the crucial test of the crew emergency escape system -- could upset flight schedules. The test escape system is vital for the project, because it is the only way astronauts can survive a rocket failure from before launch all the way to cutoff of the main engine during ascent. NASA has to sign off on the test results before crew transportation can begin.

Chris Ferguson, Boeing's deputy program manager, told a space conference in Long Beach last month that a so-called emergency pad abort test, which blasts a stationary capsule off the launch pad, was slated for late 2017. But he said Boeing intended to use simulations to demonstrate that the emergency escape system will work later in the mission, when the rocket is climbing toward orbit.

"We're pedaling as quickly as we can," Mr, Ferguson told the conference, calling it "a very aggressive schedule." He also said "we'll fly when we're ready." If it ultimately "takes a couple of extra months" to certify a safe vehicle, he added, "then we'll do just that" because "that's what the country wants, and specifically what the astronauts want."

The revised schedule means Boeing now likely won't start regular manned missions until close to the end of 2018. Since the pad abort test has been slated as one of the last big steps before the capsule's inaugural flight, any major design or operational problems with that system are bound to translate into further delays.

Write to Doug Cameron at doug.cameron@wsj.com and Andy Pasztor at andy.pasztor@wsj.com

(END) Dow Jones Newswires

October 12, 2016 02:53 ET (06:53 GMT)

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