Boeing | Fundamental Analysis | Long

May was a very good month for Boeing: the company returned to space with a (mostly) successful test flight of its CST-100 Starliner crewless spacecraft. Of course, SpaceX still has the edge over Boeing in manned spaceflight: since conducting its own crewless test flight in 2019, the company has put 25 people into orbit, compared to Boeing's zero.

But Boeing is looking to close the gap with SpaceX - possibly as early as this year - and set itself up to start generating revenue from manned flights in the future.

Boeing's OFT-2 test flight in May was the culmination of more than two years of work to get the Starliner up and running. While the crewless flight didn't go entirely smoothly, it was close enough that last month NASA confidently designated two astronauts -- crew chief Barry "Butch" Wilmore and pilot Sunny Williams -- to fly the Starliner in the upcoming Crew Test Flight (CFT).

NASA has not given a specific date for the CFT as it is still evaluating data from OFT-2. However, the space agency's internal calendar reportedly has a launch date of December 8. According to Ars Technica, there is at least "a reasonable probability that Starliner will make its second flight this year." And NASA has promised to help clarify that in a "launch schedule estimate" by the end of July.

Above all, it will be a big PR win for Boeing. It will allow the company to claim that, like SpaceX, Boeing is also a space company with a human-rated craft capable of flying to the International Space Station, to future private space stations that could be launched into orbit, or even theoretically to the moon. The Starliner's 390-cubic-foot crew compartment is near twice the size of the Apollo capsule, which regularly went to the moon in the 1960s and 1970s. While SpaceX will certainly remain the leader in terms of missions completed to date, in some ways Boeing will successfully "catch up" with SpaceX in this particular space race.

A successful CFT mission would also allow Boeing to receive the remainder of the $4.2 billion the company received in 2014 to develop the Starliner, a test flight, and six working flights with a crew to the ISS.

However, the CFT likely won't help Boeing win a few more crewed missions from NASA. When NASA gave SpaceX the first three additional crewed flights last year and then five more flights in June, it essentially maximized its crew transportation needs to the ISS until the end of the space station's lifespan, which is expected to expire in 2030.

While it is possible that NASA will find reasons to send additional astronauts to the ISS over the next eight years -- or that it may extend the life of the ISS beyond 2030, which would require additional flights -- at this point, Boeing cannot expect to get new flights to the space station. That means the company must get lucky if it wants to find more work (and more revenue) for Starliner. Either Boeing has to cross its fingers and hopes NASA finds a need for more flights to the ISS, or Boeing has to find new customers who need a manned spacecraft.

Where can such customers be found? There are three options. First, Boeing could approach Axiom Space with an offer to service that company's planned future space station. Axiom already has close ties with SpaceX, which could make that offer difficult to make. On the other hand, Boeing is already Jeff Bezos' partner in the Orbital Reef space station project, and if that project ever comes to fruition, Orbital Reef would be a logical destination for future Starliner flights.

Alternatively, Boeing could do as SpaceX did and become its own customer. Once the Starliner is deemed safe for human spaceflight, there is no reason why Boeing should not take the example of Virgin Galactic, Blue Origin, and SpaceX and offer space tourists to go into orbit aboard the Starliner as part of paid spaceflight. After all, when SpaceX flew its private Inspiration4 space tourist mission, it was rumored to have raised as much as $200 million to fly four space tourists.

Of course, how big the market is for $50 million space tourism tickets remains an open question, but since only two companies are capable of providing such a service right now, and Boeing is going to be one of them, this may be the most convenient avenue for expanding Boeing's new manned spaceflight program.