PARIS — With the size and growth of commercial markets uncertain, launch companies are looking to government agencies to varying degrees for stability and funding for the development of new vehicles.
That range of interest in government support became clear during a panel discussion at Euroconsult’s World Satellite Business Week conference here Sept. 10, when executives with three American launch companies — Blue Origin, SpaceX and United Launch Alliance — discussed what would happen if they didn’t win a major U.S. Air Force launch competition.
The three companies, as well as Northrop Grumman, are all competing for the National Security Space Launch Phase 2 Launch Service Procurement, having submitted bids a month ago. The Air Force is expected to select two companies in 2020 to share up to 34 national security launches from 2022 through 2026, while cutting off any development funding the losing companies received in Phase 1 of the program.
Asked what their “Plan B” was should they lose the competition, the executives offered a range of responses. At one end of the spectrum, John Elbon, chief operating officer of ULA, acknowledged losing the competition would be a “significant impact” to the company.
“Government business is a significant part of ULA’s business,” he said. “We would have to evaluate what that meant for the future of United Launch Alliance.” That evaluation, he added, would be done by Boeing and Lockheed Martin, the two companies that own ULA.
He added, though, that he was confident that ULA, with its Vulcan launch vehicle currently in development, will win an Air Force contract. “I think we have a real good offering. We’re working hard to continue our successful launch rate,” he said. “Vulcan is a great vehicle and we’re focused on making sure that we win.”
Clay Mowry, vice president for global sales at Blue Origin, was at the other end of the spectrum. “We have robust funding, and we expect that funding to continue,” he said, a reference to the investment made by the company’s founder, billionaire Jeff Bezos. “We’re starting in the commercial market. We’re going to have a strong presence there.”
As for the company’s role serving government customers, he said, “We’re coming, and we’re going to be there.”
Gwynne Shotwell, president of SpaceX, staked out a middle ground. “We’ve always looked at the market and made sure we could accommodate all customers,” she said. “We won’t need a Plan B, not because I’m sure we’re going to win — I hope we win, certainly — but because we have a very robust business without that activity.”
She acknowledged, though, that SpaceX was focused on winning national security launch contracts. “Obviously, it’s a growing part of our business right now, and we certainly hope to continue serving it.”
That interest in government business extends outside the United States as well. “I want to highlight the importance of the government market,” said Stéphane Israël, chairman and chief executive of Arianespace. “We are, by far, the most exposed to the [commercial] market.”
That will change, he predicted, with the upcoming introduction of the Ariane 6 and Vega C rockets. “We will begin to mitigate, a little bit, this risk because these vehicles are more adapted to deliver for institutional needs than the current family of Ariane 5 and Vega,” he said. “They will arrive in the market in 2020 when Europe will have a big institutional demand. This is good news for us.”
Uncertain commercial markets
For many years, demand for commercial launches was dominated by large geostationary orbit communications satellites, averaging about two dozen satellites per year. However, in the last few years there has been an extended drought in satellite, and thus launch, contracts. While there are signs of a rebound, most launch executives don’t expect the market to go back to that high level of demand.
“We see the market recovering to some degree, but not to the high rate of 24 or so,” said ULA’s Elbon.
“I think the orders of big satellites will recover up to the 10 or 15 [per year] level,” said Ko Ogasawara, vice president and general manager of space systems at Mitsubishi Heavy Industries, which manufactures the H-2A and is developing the H3. “Not back up to the 20 or 25 we had five or 10 years ago.”
The satellites in the GEO market are also changing, with a growing interest in very small platforms, some as small as 300 kilograms. “The mass is now very open,” said Israël. “We have definitely left the world of three-ton to six-ton class of satellites.”
“I think we’re going to see a proliferation of alternative telecom systems,” said Shotwell. “I don’t believe we will get back to 24 satellites per year.”
Among those alternative approaches are many proposed low Earth orbit constellations of hundreds to thousands of satellites. Most executives on the panel thought that two to three such constellations could “realistically” be deployed in the coming years.
“You have a number of constellations with test satellites in orbit already, and you have some very well capitalized companies coming with constellations,” said Mowry, who was on the high end, predicting three to five constellations. Neither he nor other panelists predicted which constellations would make it, other than Shotwell’s advocacy for SpaceX’s own Starlink system.
Smallsats present a new opportunity for large launch vehicle developers, either as secondary payloads or dedicated launches, with both Arianespace and SpaceX rolling out dedicated rideshare programs last month. Israël said Arianespace was working on a shared pricing policy between Ariane 6 and Vega C for smallsats weighing less than 200 kilograms, providing “maximum flexibility to the customer.”
Kirk Pysher, president of International Launch Services, said that now that his company operates under Glavkosmos, the commercial subsidiary of Roscosmos, it had more flexibility for launching smallsats. While the Protons that ILS has traditionally marketed flew missions to geostationary transfer orbit, where there was little demand for smallsats, ILS can now tap into Soyuz rockets sold by Glavkosmos. “This is a great opportunity for them, and we can go forth with them on gaining some additional rides,” he said.
Panelists, though, were split about the potential success of small launch vehicles. Xing He, executive vice president of China Great Wall Industry Corporation, was the most optimistic, expecting up to 10 small launches to succeed in the market, of which at least five will be Chinese. That will be driven by demand for deploying and maintaining constellations, he predicted.
Shotwell, by contrast, was pessimistic any small launch vehicle will be successful, based on SpaceX’s decision to retire its own small launch vehicle, Falcon 1, years ago because of a lack of customers. “I certainly wish them luck, but it’s a rough market,” she said of small launch startups. “I’m a little bearish on the small launcher market, because I was there.”