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Why SpaceX Will (Probably) Put People in Space Before Boeing

By Rich Smith - Apr 19, 2020 at 7:13AM

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Will Boeing still be able to charge premium prices after a second-place finish?

On December 20, 2019, Boeing (BA 1.58%) flubbed one of its most important missions ever.

The test flight in question aimed to send an uncrewed CST-100 "Starliner" spacecraft to the International Space Station and back, laying the groundwork for a crewed mission to carry honest-to-goodness astronauts to ISS early this year.

Unfortunately, a computer glitch on the spacecraft failed to fire the Starliner's engines at the correct time. As a result, Starliner never made it to ISS, and had to return to land ignominiously back on Earth, its mission largely a failure. For months afterward, Boeing negotiated with NASA, arguing back and forth about whether the company should be allowed to proceed with a crewed mission in hopes that having astronauts aboard this time will prevent a recurrence. Ultimately, though, NASA decided that Boeing would have to re-do its initial test flight, and prove its spacecraft is capable of glitch-free automated flying.

Last week, Boeing finally agreed. At a cost of $410 million, it will refly the uncrewed "Orbital Flight Test," probably in October or November this year. 

So what does this mean now for Boeing -- and for SpaceX, its archrival in spaceflight?

Artist's rendering of SpaceX Crew Dragon docking with ISS last year.

Image source: SpaceX.

SpaceX wins

Barring some unforeseen event, it means that SpaceX is going to win the "race to space" against Boeing.

You see, SpaceX was also asked by NASA to run an uncrewed mission to ISS first, to ensure that its equipment works right, then follow that up with a crewed mission. On March 2, 2019, SpaceX accomplished the first half of this plan without a hitch, flying a Crew Dragon space capsule to ISS atop a Falcon 9 rocket, docking successfully with the space station, and then, 27 hours later, returning to Earth.

SpaceX ran into difficulties afterwards -- most notably an April 20 "anomaly" that destroyed its first test vehicle in an explosion during an engine test -- but there were other issues as well. The fact is, if none of those had happened, SpaceX would probably already have sent astronauts to ISS once or twice by now. But with most glitches presumably ironed out today, SpaceX looks all-systems-go to attempt its first crewed spacecraft launch -- ever -- probably next month. 

According to the space watchers at SpaceflightNow.com, SpaceX is scheduled to fly its "Demo-2" Crew Dragon mission in late May, carrying NASA astronauts Doug Hurley and Bob Behnken to the International Space Station and then returning to Earth under remote control after depositing them there for their assignments. 

If all goes as planned, SpaceX will write itself into the history books as the first privately owned space company to ever send humans into orbit -- and the company that gave NASA back the ability to launch U.S. astronauts into space from U.S. territory.

As for Boeing, however, even if its uncrewed Starliner mission goes off without a hitch later this year, and even if it follows that up with a successful crewed mission, Boeing will forever after be a runner-up to SpaceX.

SpaceX wins, Boeing loses ... profits?

Nor is pride of place the only thing Boeing might lose if SpaceX beats it to ISS again. When NASA originally awarded "Commercial Crew" contracts to Boeing and SpaceX back in 2014, it promised to pay SpaceX $2.6 billion to run "at least two, and as many as six, crewed missions to the space station," but promised to pay Boeing $4.2 billion to do exactly the same thing.

Presumably, NASA paid Boeing a premium because of its hard-won reputation as one of America's go-to space companies (alongside Lockheed Martin), and as one half of the Boeing-Lockheed joint venture United Launch Alliance, which has successfully launched 138 rockets in a row into orbit without suffering a single failure. (Even in the abortive December 2019 Starliner mission, it was only the Boeing spaceship that failed to operate correctly. The ULA Atlas V rocket that launched the spacecraft performed flawlessly.) Back then, SpaceX was the unknown quantity, and Boeing the presumed expert in spaceflight -- an expert worth paying a premium to, to ensure that at least one spacecraft could fulfill the mission. 

Now, however, if SpaceX ends up beating Boeing to ISS not just once, but twice, on both its uncrewed and its crewed missions, the arguments in favor of paying premium prices to Boeing for doing the same work SpaceX is doing could fall short. Going forward, Boeing may be forced to compete much more with SpaceX on the price of missions, and won't be able to lean as heavily on its reputation to justify pricing its missions at a premium. One has to imagine the loss of its ability to charge premium prices will show up on the company's income statement in the form of reduced profit margins.

Long story short: May could be a brilliant month for SpaceX. It could also mark a decline in profitability for Boeing's space division -- and the beginning of the end for Boeing's reputation as America's premier space company.

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