Boeing's (BA 0.25%) attempt to compete with SpaceX in the field of manned spaceflight is turning out to be an expensive gamble -- and verging on fiasco.

Since winning its $4.2 billion 2014 NASA contract to provide "Commercial Crew" spaceflights to and from the International Space Station, Boeing has racked up nearly $900 million in losses. The losses began with a failed test flight in 2019, causing a huge delay to Boeing's manned spaceflight program, with an uncrewed Starliner finally limping in to dock with the International Space Station two-and-a-half years later. Boeing was supposed to be back on track with Starliner at that point, and had planned to launch Starliner in July 2023. 

But now it seems Boeing isn't going to proceed as planned.

Boeing calls it quits...for now

Citing issues with Starliner's parachute system (used to return the space capsule and its astronaut occupants to Earth after a mission), and a potential fire risk with the "P-213 glass cloth tape" used to wrap wiring within the spacecraft, Boeing announced earlier this month that it is postponing its July attempt to send Starliner to ISS with crewmembers aboard for the first time. "Safety is always our top priority, and that drives this decision," said Boeing Starliner program manager Mark Nappi.

That's a commendable philosophy, but it's now uncertain when Boeing will be able to conduct Starliner's first crewed test flight, dubbed the "Crew Flight Test" mission. Although Nappi demurred that Boeing has not yet had any "serious discussions" about canceling its Starliner program outright, he "wouldn't want to commit to any dates or timeframes" for attempting a launch. 

Will Boeing call it quits forever?

Boeing's reluctance to name even an optimistic date to restart its Starliner program, however, sounds ominous -- and already the vultures are circling.

Earlier this week, Congressional news source The Hill ran an opinion piece asking "is it time to cancel the Boeing Starliner?" Calling the program "snake bit" after its first flight test failed, its second only barely succeeded, and now its third has been canceled and postponed indefinitely, space policy writer Mark Whittington points out that if Boeing had gone ahead with its July test flight as planned, either of the identified problems could have ended in "catastrophe" for the crew as it attempted to reenter Earth atmosphere for a landing. 

What's more, Starliner is already kind of a catastrophe for Boeing stock. Not only has the program cost the defense and aerospace giant nearly $1 billion in losses already, the short duration of the Starliner program means it's unlikely Boeing will have enough time to make back those losses and earn a profit on Starliner. Recall: Although in 2014 NASA awarded an equal number of six Commercial Crew missions to both Boeing and SpaceX, SpaceX's success with its Crew Dragon program -- and Boeing's failures with Starliner -- have resulted in every single Commercial Crew mission since being awarded to SpaceX.

In 2021, NASA upped SpaceX's Commercial Crew contracts from six to nine missions. In 2022, NASA awarded SpaceX five more missions. As a result, NASA has now awarded all the crew missions it will ever need to keep ISS fully staffed with astronauts through the space station's expected 2030 retirement date. There's literally no possibility at this point for Boeing to win more Starliner contracts -- even assuming it is able to fix its problems with Starliner, and perform the six missions it was originally awarded.

Boeing's only hope

Granted, there's a slim possibility Boeing uses Starliner to transport astronauts to private space stations after ISS is retired. However, this would require that Boeing first fixes Starliner (assuming it can, and assuming the cost isn't too great). It would also require that the space station consortium that Boeing is part of, led by start-up space company Orbital Reef, succeeds in winning permission to build a replacement space station -- which is hardly assured.

That's an awful lot of "ifs" to ask Boeing's rickety Starliner to carry into orbit. And because Starliner was awarded to Boeing on a fixed-price basis, this means that Boeing (and its investors) bear the risks entirely on their own. Any further failures or delays with Starliner could push Boeing's losses on the program well past the $1 billion mark.

The upshot for investors

Sad to say, when you weigh the obvious risks versus the limited potential for gains, Boeing's best bet at this point is probably to call it quits on Starliner, write off the losses, and move on to other projects.

As a space company, it really does look like Boeing has passed its prime. On the plus side, at least airlines are starting to look healthy again, losses are slimming at Boeing's marquee Commercial Airplanes business, and analysts polled by S&P Global Market Intelligence are predicting that Boeing will return to profitability in 2024.

The sooner Boeing cancels Starliner, the more likely that is to happen.