Boeing Sees Costs From Delayed Space Taxi

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.

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 would push back the first unmanned flight to June 2018, with a crewed flight following in August.

The new delay was first reported 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.

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.

Write to Doug Cameron at [e-mail] and Andy Pasztor at [e-mail]

(END) Dow Jones Newswires

October 11, 2016 14:05 ET (18:05 GMT)

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