It should have been triumphant. It ended in an "anomaly."

On December 20, 2019, at 6:36 a.m. EST, NASA contractor Boeing (BA -0.87%) launched its Starliner spacecraft atop a United Launch Alliance Atlas V rocket, aiming to send the spacecraft on an uncrewed test flight to dock with the International Space Station (ISS).  

"A lot of things went right" with that flight, emphasized NASA Administrator Jim Bridenstine in a post-action news conference. But one important thing didn't.  

Boeing Starliner crew capsule after landing at White Sands

Image source: NASA.

What went wrong

After separating from its Atlas V carrier rocket (which performed "nominally"), Starliner's engines failed to ignite at the correct time, and as a result, the spaceship failed to enter the correct "insertion" orbit for docking with the ISS. As of today, Boeing and NASA are still not 100% certain what went wrong, but initial indications are that the spacecraft's internal "mission-elapsed" clock was off, leading Starliner to fire its engines at the wrong time.

Further complicating matters, at the time when the engines should have fired, the spacecraft was out of coverage from communications satellite. This prevented override commands from NASA from reaching the spacecraft, correcting the error, and salvaging the mission. By the time NASA was able to reestablish communication, Starliner lacked sufficient fuel to correct course and dock.

The mission was aborted, and NASA instructed Starliner to come back home, never having reached the ISS. At 7:58 a.m. EST, the spacecraft parachuted to a safe landing at the White Sands Test Facility in New Mexico.  

What happens next

NASA and Boeing tried to put a brave face on things, but there's no denying this was a disappointment.

Bridenstine reminded space fans, taxpayers -- and Boeing investors -- that "this is why we test." He emphasized that the anomaly that ended Starliner's mission would not have endangered passengers, had any been aboard: "If we had crew in there they would have been safe." Indeed, as astronaut Nicole Mann (scheduled to fly on the first crewed Starliner mission) averred: "Had we been on board there could have been actions that we could have taken [to right the ship]. ... That's our job. That's what we're trained to do."

And indeed, that may be the next step -- to put astronauts on board right away, rather than rerun the uncrewed test. Asked by reporters whether Boeing's failure would necessitate a second uncrewed attempt before a crewed flight is possible, Bridenstine said that while it is possible to skip a successful uncrewed result and proceed directly to crewed flight, it's too early to make that decision.

"I'm not saying yes and I'm not saying no," hedged the Administrator.

What it means for investors

And that decision could become key for Boeing investors.

With Boeing already reeling over its ongoing 737 MAX debacle, and the penalties it must pay airlines for selling them airplanes they're still unable to fly, Boeing really needed a win this week. Instead, the failure of its first Starliner test for NASA is being blamed as one of the reasons CEO Dennis Muilenburg lost his job this week.  

Pundits are meanwhile pointing out that NASA paid Boeing $4.3 billion to build a spaceship capable of human spaceflight, while paying SpaceX only $2.5 billion -- to do exactly the same work. Yet SpaceX successfully launched, docked, and recovered its uncrewed Crew Dragon spacecraft nine months ago, and is preparing for a crewed launch attempt in 2020.

Boeing, with nine more months and $1.8 billion more to work with, failed.

Should NASA require that Boeing postpone a crewed flight of Starliner until the company can rerun its uncrewed test, it would delay the crewed mission by months. The decision to pay Boeing more than SpaceX, for worse results, would become increasingly indefensible for NASA. Politically speaking, I could see Congress insisting, for example, that future contracts with Boeing be conducted on a fixed-fee basis that would require the company to eat any costs incurred from further delays. "Space" already isn't a huge profit-driver for Boeing, contributing only $147 million in operating income last year, or about 9% of profits from Boeing's Defense and Space unit (BDS) according to S&P Global Market Intelligence. But any further squeeze on profits could endanger the viability of the division.  

On the other hand, if NASA and Boeing are willing to roll the dice, and proceed with a crewed mission to the ISS without redoing the uncrewed test, there's the potential for Boeing to reset the table and (partially, at least) catch up with SpaceX. It would be a risky move for both actors -- and would perhaps attract criticism from space fans, who might accuse NASA of gambling with astronauts' lives to benefit a favored contractor. On the other hand, as astronaut Mann pointed out, having humans in the cockpit might be key to preventing a second failure for Boeing.

It might also be Boeing's best chance of getting its space program back on track.