What Boeing’s rocket launch delay means for the company, according to Intuitive Machines CEO

Boeing (BA) postponed the launch of its Starliner space capsule on Monday after discovering a defect in its oxygen relief valve just hours before liftoff.

Early Tuesday, NASA said the launch, which was expected to carry two astronauts to the International Space Station (ISS), would be rescheduled to “no later than Friday, May 10.”

“The delay allows teams to complete data analysis on the pressure regulating valve on the liquid oxygen tank on the Atlas V rocket’s upper stage and determine if the valve needs to be replaced,” NASA said. In the current situation.

The launch of the CST-100 Starliner aboard a United Launch Alliance (ULA) rocket, a Boeing-Lockheed Martin (LMT) joint venture, was supposed to mark Boeing’s first crewed flight and a major step forward for a company plagued by design flaws. A failed flight attempt.

But the mission teams canceled the launch two hours before take-off. NASA astronauts Barry “Butch” Wilmore and Sunita Williams were scheduled to spend a week on the International Space Station while the Starliner remained docked.

“It was a real challenge for them to make their spacecraft ready to launch and safe for the astronauts,” said Steve Altemus, founder and CEO of Intuitive Machines (LUNR), speaking at the Milken Institute World Congress. “Although they have worked through some very difficult technical challenges, what is the future of this program? I am not quite sure how this will continue over time and what kind of investment it will require.

NASA's Boeing flight test astronauts Sonny Williams and Butch Wilmore exit the Neil A.  Armstrong operations and egress at the agency's Kennedy Space Center in Florida during a mission rehearsal on Friday, April 26, 2024. The first flight of Boeing's Starliner capsule with the crew on board is scheduled for Monday, May 6, 2024. (Frank Micheaux/NASA via AP)

NASA’s Boeing Flight Test astronauts Sonny Williams and Butch Wilmore exit Kennedy Space Center in Florida during mission training on Friday, April 26, 2024. (Frank Michaud/NASA via AP) (News agency)

The delay represents the latest setback for a company already plagued by quality control and safety issues in its aviation business, including a slew of issues linked to the 737 MAX models.

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Boeing began developing the Starliner in 2014 after winning a $6.8 billion NASA contract with Elon Musk’s SpaceX to carry astronauts to the International Space Station. Since then, SpaceX’s Crew Dragon capsule has made nine crewed flights for NASA and four with private astronauts, while Boeing has failed to keep up.

Boeing’s first attempt to reach the International Space Station was unsuccessful after the onboard clock was set incorrectly, causing the computer to start the capsule’s engines prematurely. The program has incurred more than $1.5 billion in cost overruns.

Altimus, whose company partnered with Boeing and Northrop Grumman (NOC) to develop a lunar terrain vehicle for NASA, said the challenges Boeing faces highlight a fundamental shift in the new space economy.

“It speaks to a broader issue in the industry about what the role of a traditional prime contractor or strategic airline is,” he said. “I think the NASA environment and the way they do non-traditional procurement to procure goods and services for the Artemis program has fundamentally changed the landscape and disrupted the strategic space.”

Photographers capture a Boeing Starliner capsule atop an Atlas V rocket as it is rolled to the launch pad at Space Launch Complex 41, Saturday, May 4, 2024, in Cape Canaveral, Florida.  NASA astronauts Butch Wilmore and Sonny Williams will take the plane to the International Space Station, scheduled for launch on May 6, 2024. (AP Photo/Terry Renna)Photographers capture a Boeing Starliner capsule atop an Atlas V rocket as it is rolled to the launch pad at Space Launch Complex 41, Saturday, May 4, 2024, in Cape Canaveral, Florida.  NASA astronauts Butch Wilmore and Sonny Williams will take the plane to the International Space Station, scheduled for launch on May 6, 2024. (AP Photo/Terry Renna)

Photographers capture the Boeing Starliner capsule aboard an Atlas V rocket as it is rolled out to the launch pad on May 4, 2024, in Cape Canaveral, Florida. (AP Photo/Terry Renna) (News agency)

The space economy is in the midst of rapid development, driven by SpaceX. Borrowing from founder Elon Musk’s playbook, companies are moving faster, building bigger, and cutting costs in the process, bringing a tech startup-like mentality to space exploration.

Much of this growth has been limited to rockets and satellites, but NASA has added more fuel, by relying on private companies to take on the risks of further space exploration to the moon and beyond.

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The push to move faster and increase flexibility has put smaller companies like Intuitive in the driver’s seat, Altimus said. NASA has already awarded the company more than $100 million to develop a comprehensive lunar delivery service as well as develop a lunar terrain rover.

In February, Intuitive became the first commercial company to reach the lunar surface, although its Odysseus lunar module flipped on its side upon landing, forcing a mission change.

“The government is asking us as businesses to share the risk,” Altimus said. “Sometimes, for larger strategic airlines, their boards and shareholders are not comfortable with that risk attitude, where a smaller, more nimble, more flexible company can navigate that financial risk and be successful.”

“I think the companies that can figure this out, the ones that can handle these non-traditional purchases, will be the first-class airlines of the future,” he added.

Get more of Yahoo Finance’s coverage of the 2024 Milken Institute Global Conference.

Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @Akiko Fujita.

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