Amid GEO downturn, launch operators look for new markets

by

PARIS — With orders for geostationary orbit satellites declining, potentially permanently, commercial launch service providers are looking to government and other markets to make up for lost business.

Commercial GEO satellites, ordered in recent years at a rate of roughly two dozen per year, have long been the mainstay of the commercial launch industry. However, those orders have recently plummeted, with no signs of a revival in the near term.

That has not had an immediate impact on launch activity given the gap of two to three years between a GEO satellite order and its launch. “There’s been a flying out of backlog that’s led some folks to think there’s been an explosion in this marketplace,” said Tory Bruno, president and chief executive of United Launch Alliance, during a panel at Euroconsult’s World Satellite Business Week Sept. 11. Instead, he said the market “is certainly flat and soft, especially in the GEO segment.”

Other launch company executives on the panel agreed the GEO market is weak, but disagreed about how long the downturn would last. “The market is very soft. It was last year, this year, and I don’t know that it’s going to change dramatically next year, either,” said SpaceX President Gwynne Shotwell. “I think we’re in a permanent low level of GTO satellites.”

“If we just stayed focused on GEO missions, we’d be hurting,” said Kirk Pysher, president of International Launch Services, which markets the Proton and Angara rockets. “It’s going to come back at some point. I don’t know if it will ever come back to the 20 to 25 [satellites per year] that we had hoped for.”

Bruno said the “pause” in the GEO market is linked to the uncertainty among GEO satellite operators about the effects proposed low Earth orbit constellations will have on their business. “I also think that will eventually lead to a sort of reset in the GEO marketplace,” he said, with those constellations taking some, but not all, business away from GEO systems.

“But GEO’s not going away. It’s not going anywhere,” he added. “It’s going to reset to a slightly different level. We’ll see the LEO constellations appear, and we’ll see, I think, some resurgence in the outyears in the marketplace in total.”

Arianespace Chief Executive Stéphane Israël agreed that the GEO market has been “quite soft,” which can have a significant effect on his company because of its traditionally heavy reliance on commercial GEO business. He’s turning to government customers to make up for that diminished demand. “It is clear that in this kind of situation, if we want to make it, we absolutely need institutional missions,” he said.

Shotwell also said government business, particularly growing work with the Defense Department, is mitigating any commercial GEO downturn. “I think the decrease in the GTO level, whether it resets or wherever it ends up, is not going to impact us dramatically because there are other market areas that are growing for us,” she said. “The DOD business is growing for us dramatically.”

Another potential growth opportunity is commercial human spaceflight, she said. “Candidly, I think one of the potential growth areas, the largest growth area if you put aside constellations, will be once we fly crew,” she said, a reference to the company’s Crew Dragon spacecraft it is developing for NASA and other potential commercial applications. “I do think ultimately — and I’m not going to talk about timelines — but I do think that will probably be the majority of our business in the future, flying people.”

Another factor complicating the shift in markets is a shift in launch vehicles. Nearly all the companies represented on the launch panel, including Japan’s Mitsubishi Heavy Industries and China Great Wall Industry Corporation, are in the process of developing and fielding new generations of vehicles. All said they expected to have transition periods of several years where both existing and new vehicles will be in operation simultaneously before retiring the older generation of vehicles.

The exception on the panel was Blue Origin, which currently working on its first orbital launch vehicle, New Glenn. “We will be happy to transition people off of our competitors’ rockets onto New Glenn,” said Blue Origin Chief Executive Bob Smith.