Panelists See Launch Services Market, Providers, Contracting

The commercial launch market is flat at best and likely to stay that way for the next few years. This means that the number of launch services companies may contract, industry panelists said at the annual SATELLITE show in Washington, D.C. on Tuesday.

“It’s a very interesting time for the industry,” Gwynne Shotwell, president and COO of SpaceX told a roundtable on Geostationary Orbit (GEO) and heavy-lift launch services. “There’s a lot of interest in building launch vehicles to service the same markets. At the same time, the commercial [space] industry has experienced a pretty significant contraction in recent years, so I don’t think there’s actually room for all of us.”

Shotwell argued that there would probably be enough launches to sustain no more than three different vehicles in each class of heavy lift launch — civil, military/national security, and commercial — “So while we might all be on the panels [in future years] I don’t think all of us will be getting into orbit,” she said.

“The market now is so competitive … We have to be adaptable and flexible,” added Ko Ogasawara, vice president and general manager of space systems for Mitsubishi Heavy Industries.

Panelists also weighed the impact of the U.S. Air Force’s new launch procurement it put out for bids last week, and discussed the sheaf of new vehicles all aiming to launch in 2021.

Northrop Grumman’s Omega vehicle, designed as a replacement for the Russian-made RD-180, is aiming to launch that year, said the company’s Propulsion Systems Division Vice President for Strategic Programs Kent Rominger. He said the giant defense contractor was test-firing its new engine at the end of May, and aiming for simplicity in its design. “Simple is good, because simple equates to reliability,” he said. He added that Northrop would be cushioned from any slowdown in the commercial launch market by its focus on military and spy satellites. “Our business case is built around a very modest piece of the commercial market … it’s really built around the national security space,” he said.

But it’s not just the commercial market that’s flat and likely to stay that way for a few years, noted Tory Bruno of the United Launch Alliance (ULA). “We’re in a bit of lull in the U.S. with respect to national security [launches],” he said. “We simply fell into a pattern where all our assets go up at once. Lots of launches. Then they age for a while and there and there no launches, then we start the cycle again.”

“We’re in a lull in both [commercial and military/national security] places,” he said.

Launch company services come at the tail end of the procurement chain for satellites, so it’s relatively easy to predict how much business to compete for, he argued. And everyone in the sector has similar cost structures.“The thing about being a launch service provider is you’re at the end of the tail,” Bruno explained. Satellites get ordered and designed, but built and launched years later. “We have actually had a pretty good view of that multi-year tunnel and what’s coming at us” in the way of future business.

“The math behind this is kind of straightforward,” Bruno continued, predicting that “for most of this next decade” there would be no more than 30 to 35 launches a year. “All the launch companies are kind of similar [in their structure] with big capital assets like launchpads and factories. We all need 8 to 12 — let’s say 10 — launches a year to be a viable economic entity. That’s room for four. There’s going to be two in Europe. That leaves us two domestically … We’ll be one of them.”

He said that ULA was hanging its hat on its decision to design its new vehicle — the Vulcan — specifically for the new Air Force procurement, the latest phase of which was released last week. “We chose to center our rocket design and architecture of Vulcan to be purpose built for that [military launch] mission space,” he said. “Every rocket is optimized for a single set of missions … In this case, we chose to optimize here.”

The National Security Space Launch Service Procurement (LSP) is the second phase of the program through which the U.S. military will buy launch capability from two providers. The nine sample launches included as examples in the solicitation for the open-ended, five year deal are “More difficult missions that we have done in the past,” said Bruno. “The vehicles that exist today cannot do all these missions.”

“We are very much looking forward to flying our first rocket in 2021,” Bruno concluded.

Blue Origin CEO Bob Smith took a less pessimistic tone about the future of the market. Satellite, in many cases, was the best way to move data around globally. “The appetite for data is insatiable,” he said. “That trend is going to continue to happen, it’s going to continue to multiply and there’s going to be a launch services impact to that.” You can argue about how long it’s going to take to happen, or how short it’s going to take to happen, but it’s going to happen,” he said.

"It's going to be a busy 2021 in Florida," he joked, noting that Blue Origin's New Glen heavy launch vehicle would also have its first launch that year. VS