The privatization, or partial privatization, of space has taken many twists since the end of the Space Shuttle era. Companies and organizations know that there are literally billions of dollars up for grabs in the contracts that can be won, and we now have a winner on the next space taxi that will take American astronauts to the International Space Station. The Boeing Co. (NYSE: BA) and SpaceX team has won out.
NASA received numerous proposals from companies throughout the aerospace industry for this contract. Boeing and Space Exploration Technologies (SpaceX) received the nod on Tuesday that they will be the companies to carry U.S. astronauts to space. As far as who gets what, Boeing received a $4.2 billion contract and SpaceX received a $2.6 billion contract.
The long-term goal is to reach Mars, but in the short term NASA is looking to reduce its reliance on Russia by 2017. The U.S. currently relies on Russia to ferry its astronauts to the International Space Station. NASA has gone on to say that by privatizing the low-Earth orbit transportation, it can focus on a more ambitious mission of sending humans to Mars.
The vehicles that were presented to NASA were Boeing’s CST-100 and SpaceX’s Dragon. The spacecraft are planned to launch on U.S. soil from Kennedy Space Center. Specialist teams from NASA have been watching the development of each of these new spacecraft during earlier development phases, and they are confident they will meet the demands and safety protocol for these important missions.
The designs must meet the same rigorous safety standards that were in place for the Space Shuttle Program, in order to achieve NASA certification in 2017.
Boeing shares closed Tuesday at $127.32, making a gain of nearly 1% on the day, and there was little positive change in the after-hours. Boeing has a consensus analyst price target of $152.73 and a 52-week trading range of $113.26 to $144.57.