Boeing(NYSE: BA) stock gets a bad rap -- perhaps deservedly so. Quality problems plague the company's 737 commercial airliner program. In space, the company's Starliner crewed spacecraft, designed to compete with SpaceX's Crew Dragon on contracts to ferry astronauts to and from the International Space Station, also has a troubled history.
Of the Starliner's Orbital Flight Tests (OFTs), there's a failed test flight (uncrewed), one partially successful test flight (also uncrewed), and now, finally, a test flight with two crew members aboard, which has been stuck up at the ISS for more than a month, and seems unable to return.
In a media update last week, Starliner crew members Sunita Williams and Butch Wilmore expressed confidence that despite Starliner's issues, the spacecraft will still get them home, "no problem." However, NASA has confirmed problems with the Boeing spaceship's thrusters overheating. At least five thrusters failed en route to the space station, in addition to problems with a stuck propellant valve and multiple helium leaks.
As the space agency acknowledges, Starliner is only rated to stay in orbit for 45 days. But as of Thursday, there's still no return trip scheduled. If Starliner doesn't leave ISS by this weekend, it will technically have outlived its sell-by date. Potentially, another spacecraft -- such as a SpaceX Crew Dragon -- might need to be sent up to retrieve the crew.
All of the above is by now well known. What's perhaps less known is that last week, SpaceX experienced an anomaly of its own.
All's not nominal at SpaceX anymore
On July 11, a SpaceX Falcon 9 launch carrying 20 Starlink satellites to low Earth orbit developed a liquid oxygen leak in its second stage that prevented the rocket from completing its intended burn, sending the satellites to a lower orbit than originally planned.
During tonight's Falcon 9 launch of Starlink, the second stage engine did not complete its second burn. As a result, the Starlink satellites were deployed into a lower than intended orbit.
-- SpaceX (@SpaceX) July 12, 2024
SpaceX has made contact with 5 of the satellites so far and is attempting to have them...
At last report, SpaceX anticipated that despite efforts to save the satellites, they will all soon reenter Earth's atmosphere "and fully demise" -- burn up on reentry.
What this means for SpaceX -- and for Boeing's Starship
SpaceX's reusable Falcon 9's first stage performed flawlessly in this mission, launching and landing back on Earth. It was only the company's second stage (which is routinely jettisoned to burn up in the atmosphere) that suffered an anomaly, and neither the misdelivered payload nor the second stage itself pose any risk to other spacecraft or to people down on Earth. For this reason, SpaceX is asking the Federal Aviation Administration to quickly approve its return to normal launch operations without making it wait through the usual months-long accident investigation.
This request may be granted -- but until it is granted, SpaceX can't fly any Falcon 9s, either to deliver Starlinks or other payloads to orbit or to organize a rescue mission for Boeing's Starliner astronauts.
What it means for investors
NASA has a policy of wanting at least two, and ideally several, independent contractors in business and bidding for contracts to launch payloads into orbit and astronauts to ISS. Boeing is one such contractor, and SpaceX another, and there are others besides. Northrop Grumman(NYSE: NOC), Boeing partner Lockheed Martin(NYSE: LMT), and their joint venture, United Launch Alliance, as well as new-space companies such as Rocket Lab USA(NASDAQ: RKLB), Relativity Space, ABL Space, and Firefly Aerospace also all serve to diversify NASA's list of options.
There's also Europe's Airbus(OTC: EADSY). In its own contribution to a big news week last week, Airbus subsidiary Arianespace launched its first heavy-lift (Ariane 6) rocket in more than a year. The launch was a success, and gives NASA one more option for putting payloads in orbit.
Why is this important to investors? Two -- or even three -- reasons. First, the situation up at ISS today illustrates the wisdom of NASA's approach, fostering multiple options for space launch. When something goes wrong with one space company's hardware, another can step in and fill the gap.
Second, from an economic perspective, more competitors bidding for NASA contracts helps keep prices under control. Back when ULA was NASA's sole provider for most space launches, after all, prices were a lot higher than they are today. Were SpaceX to become the sole provider, it's logical to assume prices would once again run amok. Maintaining competition in the space sector ensures that can't happen -- even as it gives NASA options when something goes wrong.
Granted, the companies competing for NASA contracts might prefer less competition (and higher profits). But NASA's desire for multiple bidders does have the salutary effect of ensuring that the lowest-cost provider (i.e., SpaceX) won't always win all the contracts on offer. If NASA wants to keep rivals healthy and bidding in the future, it must spread the work around at least a little bit.
In this respect at least, what's good for NASA is also good for space investors who can't yet invest in SpaceX.
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Rich Smith has positions in Rocket Lab USA. The Motley Fool recommends Lockheed Martin and Rocket Lab USA. The Motley Fool has a disclosure policy.
