Launch companies optimistic about future demand

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NATIONAL HARBOR, Md. — Launch companies that have suffered from flat or declining traditional markets in recent years say they believe a surge of demand, primarily from satellite megaconstellations, will boost their businesses later this decade.

During a panel session at the Satellite 2021 conference Sept. 9, executives pointed to constellations ranging from Amazon’s Project Kuiper to the second-generation OneWeb system slated to start deployment later this decade as part of a surge of demand they expect to serve.

“There is a wave coming from ’24 to ’28. There is another wave of constellation deployment that is coming. We’re going to see a huge rush for launch capacity in that time period,” said Clay Mowry, vice president of global sales at Blue Origin.

Not all megaconstellations are addressable to the launch industry, noted Tory Bruno, chief executive of United Launch Alliance, referring to SpaceX’s Starlink system that is captive to that company’s own launch vehicles. “But there is still opportunity for the rest of us,” he said.

Some companies are also seeing signs of life in the GEO market, although not returning to earlier levels of 20 to 25 satellites a year. Orders by Intelsat and SES as part of the C-band clearing process, as well as new software-defined, more flexible GEO satellites, are helping.

“It has faced a decline, but now it’s coming back, but maybe not at the same level as 10 years ago,” said Stéphane Israël, chief executive of Arianespace. “We see more like 15 to 17 GEO satellites to be ordered every year.”

Between GEO satellites and demand from constellations and other customers, he said he was optimistic about the prospects of the Ariane 6, scheduled to make its first launch in the second quarter of 2022. The business plan for the rocket was based on 11 launches a year. “With the perspective we have now for demand, it’s not a dream to consider that we can make it and maybe go beyond.”

While launch prices have fallen — Bruno estimated they had dropped in half over the last decade — factors beyond price along are driving launch demand. They include new technologies that make satellite megaconstellations feasible to a desire for flexible launch services.

“When customers come to us, yes, they’re looking for price, but they’re really all looking for flexibility,” said Josh Brost, vice president of business development at Relativity. Customers who once knew the mass of their spacecraft down to the kilogram years in advance are now asking how late they need to finalize exactly what spacecraft they’re flying, he said. “They all want launch on demand because their businesses are changing rapidly.”

That demand for launch, though, is not limitless. Bruno estimated that, when considering only demand that is open for commercial competition, there is room for just a handful of launch companies. “There’s room for three large launch providers, two small ones and one air-launch,” he said. “Traditional markets are flat. Our growth is in LEO constellations, and we have a few specialty and flexibility markets that are available to us.”

Some of those markets have yet to materialize as well. “We’re looking at these constellations, but they haven’t really created revenue yet,” said Jim Simpson, chief strategy officer of Virgin Orbit. An example, he said, is the internet-of-things market, which is driving interest in satellite constellations. “But no one has put a dollar in it yet.”

But some of those markets and technologies are still emerging, said Tiphaine Louradour, president of International Launch Services. “I believe we are just at the start of the first inning,” she said. “We’re really at the start of a lot of innovations, stunning innovations, in both launch and space.”