Foust Forward | Closing the small launcher business case

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August 2022 won’t go down as one of the better months for the small launch vehicle industry. On Aug. 6, India’s Small Satellite Launch Vehicle (SSLV) lifted off on its inaugural flight, initially to celebrations at the first three stages performed as expected. Those celebrations, though, faded to confusion when controllers were unable to confirm the rocket’s kick stage performed as expected.

Hours later, India’s space agency ISRO made an unfortunate but not unexpected announcement: the launch had failed because the kick stage shut down prematurely, a problem later blamed on a faulty accelerometer and a software glitch. “Satellites are no longer usable,” ISRO tweeted. With a perigee of just 76 kilometers, the satellites were simply no longer.

The SSLV failure came two days after Astra announced in an earnings call it was retiring its Rocket 3 launch vehicle after five failures in seven orbital launch attempts. The company said it would focus its resources instead on the much larger Rocket 4 vehicle but couldn’t guarantee it would be ready for commercial service before the end of next year.

But for all the focus on the difficulty in successfully launching rockets, an even bigger challenge may be the transition to operations and, ultimately, profitability. Virgin Orbit has had four consecutive successful launches since its inaugural launch failure in 2020. The company, though, recorded exactly $0 in revenue in the second quarter, the company announced Aug. 12: under its accounting rules, it records revenue at the time of launch, and it did not conduct a launch in the quarter after its most recent launch slipped to early July.

Launch cadence has been a challenge for Virgin Orbit. The company started 2022 projecting six launches for the year, but by August had performed only two and expected to do two more by the end of the year. Even that may be a stretch as its next launch, from Spaceport Cornwall in England, is pending regulatory reviews.

Rocket Lab is arguably the leader among commercial small launch vehicle ventures, with its Electron flying more frequently than any other U.S. rocket save for SpaceX’s much larger Falcon 9. But it, too, has struggled to increase its launch rate, which Rocket Lab blames on its customers.

“Launch cadence is really governed by our customers’ readiness,” Peter Beck, chief executive of Rocket Lab, said in a talk at the Small Satellite Conference. Even over a video link from New Zealand, his frustration with customer delays was evident.

“When I think about our launch manifest, it feels like a game of Whac-A-Mole,” he said, having to regularly shift launch dates and the lineup of missions based on when his customers were ready. “If we didn’t do that, our launch cadence would be even less.”

Comparing your customers to pests that must be hit with mallets is perhaps a sign your business model is not running smoothly yet. Most small launch vehicle companies based their business plans on rapidly increasing launch rates, like Astra’s projection of nearly daily launches by the middle of the decade, to produce the sharp increase in revenue that made them attractive to investors and the stock market. Those increases have yet to materialize.

One challenge is simply whether there are enough smallsats to fill up all those launch vehicles. If smallsat ventures falter, so will small launch vehicle companies, reducing overall demand.

A bigger challenge may be the competition from rideshare launches on larger rockets. While small launch companies have emphasized the flexibility of dedicated launches, many customers seem happy to accept hitching a ride on another launch in exchange for a lower price.

A day after Beck’s speech at the conference, SpaceX filled a lecture hall for a side meeting on its rideshare program. There was no shortage of potential customers, and SpaceX advised them that its rideshare launches for 2023 were fully booked and those in 2024 “pretty full” already. Launching a small rocket may be a big challenge, but launching a small rocket business may be even harder.


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Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. His Foust Forward column appears in every issue of the magazine. This column ran in the September 2022 issue.