Shakeout looming for the small launch sector

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PARIS — The small launch vehicle industry, flush with startups, will likely see a shakeout in the next one to three years with a handful of companies emerging, according to executives of two such ventures.

During a panel discussion at Euroconsult’s World Satellite Business Week here Sept. 11, representatives of Rocket Lab and Virgin Orbit said that having multiple launch providers serving the smallsat industry was important, but that the current number of companies pursuing such vehicles was not sustainable.

“There’s a lot of noise in the system right now,” said Dan Hart, president and chief executive of Virgin Orbit. “There’s another announcement every week, I think, on somebody who wants to build a launch system. At this point, I see renderings every week of incredible concepts for launch systems. I think the industry is probably hiring as many artists as engineers.”

Hart predicted “a healthy shedding of companies that can’t quite get there” because of technical or financial problems. “There will be a core of small launchers that come to life and service and satisfy a new, emerging, demanding and deserving set of smallsat customers.”

Brad Schneider, executive vice president of launch services for Rocket Lab, agreed that many of the current small launch startups will falter. “The critical time period is probably over the next three years,” he said. “I would hazard to guess that probably five or six will bubble to the top and will then fight for market share, in my opinion.”

Hart said that could happen even faster. “I think we’ll see that happening over the next year to 18 months,” he said.

Both suggested that many of the small launch vehicle startups have underestimated the amount of time and money needed to build small launch vehicles. “I know how long it took for us to get from the point of first investment to launch,” Schneider said.

“You can continue to have a concept live for quite a long time without a lot of dollars,” Hart said, “but what’s going to happen is that the satellite customers are going to realize which systems have real hardware and real capability and can deliver.”

Both companies believe they have the real hardware and real capability to be among the survivors of that impending shakeout. Rocket Lab has performed two launches of its Electron vehicle to date, and after a series of delays because of a problematic motor controller in in the rocket’s first stage engines, expects to return to flight in early November, Schneider said. That will be followed by another launch in December and as many as 16 launches in 2019.

Schneider said having its own launch facility in New Zealand is a competitive advantage, assuring it range access to eventually support high flight rates. Rocket Lab is moving ahead, though, with plans to set up a second launch site in the United States.

“We’re looking for a range to put somewhere, we believe, on the Eastern Seaboard. That should come out pretty quickly,” he said. In July, the company said it was considering Cape Canaveral, Florida, and Wallops Flight Facility in Virginia as potential U.S. launch sites, as well as locations in Alaska and California.

No decision, though, has been made about using the Electron from a launch site in Scotland that the U.K. government announced plans to develop in July. Electron had been identified as a likely choice by Lockheed Martin, which received funding from the government to use the site, since Lockheed is an investor in Rocket Lab.

“We’re still evaluating that,” Schneider said, including the business case for operations from Scotland. “No formal decisions have been made at this time.”

Virgin Orbit is continuing testing leading up a first launch that Hart said is still planned for later this year. That work includes recent flight tests of the company’s Boeing 747 aircraft outfitted with a pylon on the left wing that will be used to host its LauncherOne rocket. “We’re in full-scale integrated checkout right now,” he said of development of the launch system.

He declined to comment on discussions between Virgin Orbit and Saudi Arabia’s Public Investment Fund, who announced an initial agreement last October to invest $1 billion in Virgin’s space companies, which also include Virgin Galactic and The Spaceship Company.

“We’re first and foremost focused on getting to first flight later this year and then ramping up,” he said. He added that Virgin Orbit does have concepts being studied for “next-generation and more advanced” systems, but that the company wasn’t ready to discuss details about them yet.

If that industry shakeout does take place, both Hart and Schneider said they hoped that more than one company survived. “We’ll lead the pack, and hopefully not be the only one, because there needs to be more than one vehicle flying to really be able to flesh out this industry,” Schneider said.

“There needs to be several players in the small launch world,” Hart said. “We need that so that the spacecraft community and investment community have the confidence that they require to move forward.”