With U.S. government spending expected to decline — not even taking into account the looming possibility of a massive, 10-year defense budget cut known as sequestration — Boeing Space and Intelligence Systems is looking to increase the percentage of commercial business in its portfolio.
The size of the commercial satellite manufacturing market, once dominated by Boeing legacy company Hughes Space and Communications Co., depends on who you ask. Craig Cooning thinks it’s going to be slower in the next few years than in the recent past.
But Cooning thinks Boeing is well positioned, in part because of the government’s growing interest in having its payloads hosted on commercial satellites. Boeing built a pair of satellites for commercial fleet operator Intelsat that carry UHF hosted payloads: the recently launched IS-22, whose UHF payload is fully leased to the Australian Defence Force, and IS-27. However, the primary target customer for IS-27’s UHF payload, the U.S. Defense Department, has yet to commit to buying any of that capacity.
Boeing’s anchor satellite manufacturing program is the U.S. Air Force’s Wideband Global Satcom communications system, a 10-satellite production run that will continue for at least the next several years. That plus three Tracking and Data Relay Satellites being built for NASA are the bright spots for Boeing in a government market that has been dominated in recent years by Lockheed Martin Space Systems.
Cooning spoke recently with Space News staff writer Titus Ledbetter III.
The Boeing-built Space Based Space Surveillance (SBSS) satellite was launched in September 2010 yet is still not operational. What is the latest?
It can do some distinguishing of what is up there in the geostationary-orbit belt. We have been very pleased with its overall performance. I think the key thing is there are some ground system upgrades that the Air Force needs to do at the Joint Space Operations Center and those will be the final hurdle for reaching initial operational capability. The data that are coming off SBSS right now are fully useable — they are getting sound data from it and I think they will be even more excited when they declare initial operational capability.
Should funding materialize a few years from now for a follow-on SBSS satellite, what solution would Boeing offer?
If the requirements look a lot like what the previous SBSS looked like, then we had a strong partnership with Ball Aerospace and we would like to see that partnership continue. If the requirements are different in the future, there are some offerings that we could do independent of a partnership and we’ll just have to see what those requirements are.
Is the current SBSS satellite design the right approach for the follow-on?
Probably the biggest discussion that has happened with space-based space situational awareness is whether or not you need a gimbal or do you use a fixed-body design. We believe that ultimately you get a lot more performance capability if you do a gimbaled design and that as people have more chance to use SBSS, as they experiment with it, they will see the value of that.
Are you hopeful the SBSS follow-on will get funded?
I think the Air Force and all of the services are going to be challenged in the upcoming budget and the Program Objective Memorandum and they are going to have to make hard choices. We have heard that SBSS may be funded but we also know that there is a debate over a future defense weather satellite system as well, and I’m not sure both can be funded. The government ultimately has to decide what their requirements are and we are going to have to support them whatever they decide.
Do you agree that previous designs for a next-generation military weather satellite system were overloaded with sensors?
You are only as fast as your slowest sensor delivery. And so if you go to a smaller satellite baseline and maybe have a single sensor on board, you would be more time-sensitive to meeting the mission needs. And, again, we will respond to the government requirements. I’m hearing from the weather satellite standpoint that probably the biggest lesson learned is not to pile too many sensors onboard a weather satellite.
What’s your assessment of the commercial satellite market for the next five years or so?
We are seeing a slight downturn in the marketplace. Historically, there are probably 20 satellites per year. We think in the next few years it will be around 17 satellites per year. The big trend that we see is the willingness of the United States government to take on more and more of its military missions aboard commercial satellites. Because we are active both in the commercial market and the military market, we think we are well-positioned to meet those demands in the future.
What other major trends do you see in the commercial marketplace?
I think you will continue to see increasing demand for bandwidth. And just like you can’t live without your iPhone or your iPad, one of the things that we are starting to see more and more of is the desire for people to have bandwidth when they are doing overseas travel on airplanes. Right now when you fly over the United States sometimes you can have Internet connectivity through Gogo, which uses cell towers that beam up to airplanes. You don’t have that over the oceans on those long-duration flights. And we are seeing people now making choices on what carrier to fly based upon whether or not they can have satellite service and still have the use of their computer or their ability to do Skype while they are on a long flight. We think you are going to see more and more of that over the major air routes of the world and that will be provided by satellite service.
Is Boeing making any plans for possible sequestration at the Defense Department?
We are clearly aware that sequestration could happen. We hope it doesn’t happen. The worst thing that I think could happen out of sequestration is not to have pre-planning on the part of the government on its programs, where all of a sudden, the next day, it issues a stop-work order. One of the things that we have discussed with some of our government partners is if there are cutbacks, what is a logical way of doing these cutbacks? But we don’t have firm plans on day one for what would actually happen.
Have you discussed specific sequestration planning scenarios?
A lot of it is more of the downside of it, the disruption in the overall process, because ultimately what will happen is if you go into a scenario where a stop-work is issued, then it is not only the prime contractors but all of the suppliers that are affected. Ultimately, if the government wants to stay with a program, it is going to have increased costs that are going to be significant. Most of our discussions are, “What are the impacts if the program gets cut? What are the impacts if they don’t have a good plan?” I know the Department of Defense has gone ahead and said the downside of sequestration is so bad that it is really hard for us to plan for it.
Has Boeing given up trying to persuade the Air Force to buy more GPS 2F navigation satellites before or instead of moving on to the Lockheed Martin-built GPS 3 craft?
We made them an offer to continue the GPS 2F line on a firm, fixed-price basis and presented what we thought were very attractive prices. The Air Force made a decision that GPS 3 was really where they thought their future would be. They have announced that it is their model acquisition program — a new way of doing business — and that they did not have an interest in additional GPS 2Fs. We believe that on GPS 2F we have got the recipe now. We have launched two satellites; they have been declared operational. We have three more satellites in storage that are waiting to be launched and we are getting ready to put two or three more this year in storage as well. And so our job is to finish those satellites and deliver them and ensure that when they are up on orbit they do the mission and they last like we said they would last.
