Boeing’s Starliner Launch Could Face Serious Delay

Boeing Co. BA -0.55% ’s Starliner space capsule launch could be delayed several months as the company will likely need to remove it from atop a rocket for repairs, people familiar with the matter said.

Such a delay would be a setback for Boeing’s space program. The company has spent years developing the Starliner and was supposed to launch it late last month to dock with the International Space Station, without crew on board—after a failed attempt a year and a half ago. Ultimately, the capsule is supposed to ferry astronauts to the International Space Station.

Boeing engineers have been working to repair a problem with some of the valves in a propulsion system on the Starliner that was discovered earlier this month while the vehicle sat on a launchpad. The company first said it was investigating the valve issues last week, and on Monday disclosed that 13 valves had failed to open as expected during preflight checks

Seven of the valves are working, the company has said, and engineers have continued to try to fix the others. The issue led the company and the National Aeronautics and Space Administration to postpone two potential launch dates for the Starliner last week.

As teams continued to work on the valve problem, separating the Starliner from the rocket appeared increasingly necessary, according to people familiar with the matter.

Engineers working on the Starliner are focused on giving priority to the safety of the spacecraft and their colleagues as they worked on addressing the issue with the valves, John Vollmer, a Boeing executive overseeing the Starliner, said in a statement last week.

Boeing and NASA on Monday said they hadn’t given up on potentially launching the Starliner this month. NASA said then the earliest possible date for another attempt would be in the middle of this month.

Ahead of the Starliner do-over, NASA and Boeing officials in July said they had subjected the spacecraft to rigorous, increased testing to ensure a successful test.

In December 2019, a Boeing software error prevented the Starliner from getting into the correct orbit and it never docked with the space station. Another potentially catastrophic error was fixed during the mission to prevent damaging the spacecraft’s protective heat shield.

The 2019 botched space mission came as Boeing was struggling with the fallout of two fatal crashes of its 737 MAX passenger aircraft. Company executives have since sought to revamp how the company handles engineering, safety and quality issues.

NASA has said it wants to have two U.S.-based companies available to transport astronauts to and from the space station. Right now, the agency has one confirmed provider, Space Exploration Technologies Corp., the formal name for Elon Musk’s SpaceX, in place for those flights. Its second option is to contract for seats on Russian rockets.

China’s economic recovery isn’t gaining the momentum money managers are awaiting.

Data from China Beige Book show that the economic green shoots glimpsed in August didn’t sprout further in September. Job growth and consumer spending faltered, while orders for exports came in at the lowest level since March, according to a monthly flash survey of more than 1,300 companies the independent research firm released Thursday evening.

Consumers’ initial revenge spending after Covid restrictions eased could be waning, the results indicate, with the biggest pullbacks in food and luxury items. While travel remains a bright spot ahead of the country’s Mid-Autumn Festival, hospitality firms and chain restaurants saw a sharp decline in sales, according to the survey.

And although policy makers have shown their willingness to stabilise the property market, the data showed another month of slower sales and lower prices in both the residential and commercial sectors.

Even more troubling are the continued problems at Evergrande Group, which has scuttled a plan to restructure itself, raising the risk of a liquidation that could further destabilise the property market and hit confidence about the economy. The embattled developer said it was notified that the company’s chairman Hui Ka Yan, who is under police watch, is suspected of committing criminal offences.

Nicole Kornitzer, who manages the $750 million Buffalo International Fund (ticker: BUIIX), worries about a “recession of expectations” as confidence continues to take a hit, discouraging people and businesses from spending. Kornitzer has only a fraction of the fund’s assets in China at the moment.

Before allocating more to China, Kornitzer said, she needs to see at least a couple quarters of improvement in spending, with consumption broadening beyond travel and dining out. Signs of stabilisation in the housing market would be encouraging as well, she said.

She isn’t alone in her concern about spending. Vivian Lin Thurston, manager for William Blair’s emerging markets and China strategies, said confidence among both consumers and small- and medium-enterprises is still suffering.

“Everyone is still out and about but they don’t buy as much or buy lower-priced goods so retail sales aren’t recovering as strongly and lower-income consumers are still under pressure because their employment and income aren’t back to pre-COVID levels,” said Thurston, who just returned from a visit to China.

“A lot of small- and medium- enterprises are struggling to stay afloat and are definitely taking a wait-and-see approach on whether they can expand. A lot went out of business during Covid and aren’t back yet. So far the stimulus measures have been anemic.”

Beijing needs to do more, especially to stabilise the property sector, Thurston said. The view on the ground is that more help could come in the fourth quarter—or once the Federal Reserve is done raising rates.

The fact that the Fed is raising rates while Beijing is cutting them is already putting pressure on the renminbi. If policy makers in China wait until the Fed is done, that would alleviate one source of pressure before their fiscal stimulus adds its own.

Boeing’s Starliner Launch Could Face Serious Delay

Aerospace company likely will need to remove space capsule for repairs to problematic valves.