Smallsat launch providers face pricing pressure from Chinese vehicles

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WASHINGTON — Companies that are developing small launch vehicles or who provide rideshare launch services say they expect new Chinese launch vehicles to drive down launch prices, raising concerns among some of unfair competition.

During a panel discussion at the Satellite 2018 conference here March 12, executives of several launch providers said they expected small launchers under development or entering service in China, either by state-owned enterprises or private ventures, to sharply reduce launch prices in the coming years.

“I think the Chinese are going to drive an order of magnitude reduction in launch costs, building satellites and operating satellites. That will happen in the next five years,” said Rich Pournelle, vice president of business development for NanoRacks, a company that offers rideshare launch services for smallsats, primarily from the International Space Station.

Pournelle said that there are already signs of price pressure on launches. “Cubesats that used to cost $350,000–400,000 to launch are now $250,000 and going down,” he said. “You’re seeing a tremendous pressure from Asia, especially, on the launch side.”

Others on the panel agreed. “I think prices will settle and start to go lower as the Chinese put more launchers on,” said Curt Blake, president of Spaceflight, which also provides rideshare launch services on a variety of vehicles. “That will put pressure on U.S. launch vehicles.”

While export restrictions prevent U.S. companies from launching their satellites on Chinese vehicles, companies in other countries are both able and willing to use Chinese launch vehicles. A Long March 11 launch in January carried a cubesat for Kepler, a Canadian company planning a constellation of such spacecraft for data relay services. A Long March 2D launch in February carried two cubesats built by Danish company GomSpace for the Danish government and the European Space Agency, and two smallsats for Satellogic, a company headquartered in Argentina developing a remote sensing constellation.

Those companies stressed the advantages of accessing Chinese vehicles. “In Canada, we have a unique advantage of being able to tap into the Chinese launch capability because of our friendly nation status,” said Mina Mitry, chief executive of Kepler, during a presentation at the Canadian SmallSat Symposium last month in Toronto. “That allows us to get more readily available space access.”

A potential flood of Chinese small launch vehicles has some U.S. launch vehicle developers looking to the government to take measures. “If they’re competing unfairly, I’m confident the folks in this city are going to make sure that’s reconciled,” said Tom Markusic, chief executive of Firefly Aerospace, during the Satellite 2018 panel. He added, though, that he didn’t think the Chinese would “beat the preeminence of rocketry that’s here in the United States.”

Markusic and others still see plenty of demand for small launch vehicles even with the emergence of Chinese alternatives. “The marketplace has been thirsty for launch,” said Dan Hart, president and CEO of Virgin Orbit, developer of the LauncherOne air launch system.

Hart said the company needs to be able to do 10 to 12 launches a year to be viable but expects to be “much above” that once LauncherOne, whose first launch is later this year, enters routine operations. “We’ve got a pretty good manifest that’s been established for the first couple of years, and we anticipate that going up significantly as we get into operation,” he said.

Markusic said his company is more focused on India’s Polar Satellite Launch Vehicle (PSLV), which has become a leading provider of rideshare launches for smallsats in the last few years. Firefly, which emerged from bankruptcy under new ownership last year, redesigned its Alpha launch vehicle to increase its payload capacity to one metric ton in order to better compete with the PSLV.

“I see India’s PSLV as an existential threat to our company, and take it very seriously,” he said. “My belief is that if I can match them on cost, then customers will choose us because we’ll be much more convenient.”

Others noted that PSLV is not necessarily the least expensive option for smallsat companies seeking launches. “We buy a lot of capacity on Indian launch vehicles for our customers, and they’re not the cheapest, by a long shot,” said Blake. “Right now, there’s just a dearth of capacity, and you go where you can meet your customers’ needs.”

Jenny Barna, director of launch at Spire and the one customer of launch services on the panel, agreed. “U.S. companies are launching in India and Russia because those are the only options we have ever had. That’s it,” she said. As for launching on U.S. vehicles, she said, “When we have options we would love to, but we’re not there yet.”