Morgan Stanley projects that the establishment of a U.S. Space Force could help boost privately held SpaceX's valuation high as $120 billion. Cowen Washington Research Group is less optimistic that Trump's call for a Space Force will dramatically boost space spending.

You’re reading the SN Military.Space newsletter we publish Tuesdays. If you would like to get our news and insights for military space professionals before everyone else, sign up here for your free subscription.

#SpaceForce impact on business climate

Wall Street investment bank Morgan Stanley sees big money coming to the space sector following the president’s announcement that a new military branch for space will be formed. Space could become a trillion-dollar industry in the coming decade, the firm projects.

“Our conversations with various actors (current and retired) in the U.S. government, military and intelligence communities overwhelmingly indicate that space is an area where we will see significant development,” Morgan Stanley analysts wrote in a research note first reported by

Although Trump’s proposal has been mocked and criticized as an unneeded militarization of space, analysts view it as a credible policy that would lead to more military spending and an influx of private funds. As a separate branch of the military, a Space Force would “focus and accelerate investment in key technologies and capabilities.” If a Space Force does come to fruition, it could spur U.S technological leadership and “address vulnerabilities in surveillance, mission deployment, cyber, and artificial intelligence.”

Space is already a $350 billion business, according to Morgan Stanley. “As more investments pour into technologies like reusable rockets that make space exploration cheaper, that economy could grow to $1 trillion, especially as countries recognize the need for a space presence to maintain national security.”

Morgan Stanley projects that privately held SpaceX could reach as high as a $120 billion valuation vs. the $28 billion value from a recent fundraising round. Analysts compared current investor interest in space exploration to where interest in self-driving cars was in 2013.


Roman Schweizer, defense industry analyst at Cowen Washington Research Group, takes a more caustic view. The president’s decision to direct DoD to “seemingly gut the Air Force of its responsibility for managing space programs is an interesting one for military historians and defense nerds,” he wrote in a research note. Schweizer said Trump’s decision has kicked off a “classic D.C.-style fight in which the commander-in-chief wants to do something that his own Pentagon doesn’t.” The Air Force will undoubtedly seek to “study” how best to accomplish the president’s direction (the patented bureaucratic slow-roll) but Space Force proponents in Congress will be looking for change in next year’s defense authorization bill.

BOTTOM LINE: “We don’t expect that the creation of Space Force will be meaningful in the short-term for space programs and spending as there was increased focus and funding anyway.” The good news for space is that the Air Force “won’t be able to short change space programs for shiny new fighters and bombers.”



The business of developing and launching satellites to orbit is continuing apace in the Air Force even as a major reorganization looms. “We’re executing exactly the way we’ve been executing to try to speed up acquisition,” said Lt. Gen. Arnold Bunch Jr., military deputy at the office of the assistant secretary of the Air Force for acquisition.

Bunch said the Air Force is moving forward with its space mission regardless of what happens next. “We’ll go through the process. We will let the deliberative process play out. … We already made commitments that we are going to speed things up,” Bunch said. “We are going to continue to do those things.”

Air Force Secretary Heather Wilson has directed buyers and program managers to simplify paperwork, eliminate layers of bureaucracy and speed up the contracting process. “We’ve been given timelines by the Secretary,” Bunch said. “We’re marching down that path.”


The Space Rapid Capabilities Office, known as Space RCO, is still missing a key element that it will need to be successful: a clearly defined goal and procurement objective. “What are they supposed to build?” That is the central question, said Randy Walden, director and program executive officer of the Air Force Rapid Capabilities Office.

Walden, who has been at the helm of the Air Force RCO since 2014, is helping Raymond and the Air Force’s top space buyer Lt. Gen. John Thompson get the Space RCO off the ground. “What I told them is that they need a baseline, a foundation,” Walden said. “To me, that’s the most important piece, Once you get a feel for the space system you want to go build, then you can start populating with the right folks.”


The House will vote this week to approve the transfer of space traffic management duties — specifically the responsibility to provide space safety data to commercial and international organizations — from Defense to the Commerce Department. The legislation would implement the policy the president already signed last week. Commerce Secretary Wilbur Ross said the transition could take about a year.

U.S. Strategic Command chief Gen. John Hyten told a joint hearing of the House Armed Services strategic forces subcommittee and the House Science space subcommittee that space traffic management is “not an inherent mission of U.S. Strategic Command or the Department of Defense. I have never believed the DoD should have to perform this mission.”

The military will continue to maintain the so-called space catalog and will focus on space surveillance and situational awareness for national security purposes. “But we don’t have to be the public face to the world,” Hyten said.

The new policy has cast the spotlight on the 18th Space Control Squadron at Vandenberg Air Force Base, California. Its mission is to “deliver foundational space situational awareness to assure global freedom of action in space.” The squadron maintains the space catalog and supports the space situational awareness sharing program that provides data to foreign governments and commercial entities.



Former Pentagon space policy chief Doug Loverro argues that space has been shortchanged by the Air Force.

“When the Chinese shot down their own satellite in 2007, both Air Force and non-Air Force leaders throughout the Pentagon could be heard saying that there was no way to defend space, and that we should move to non-space alternatives,” Loverro writes.

“The Air Force, in fact, famously initiated a series of exercises labeled ‘a day without space’ so they could figure out how to conduct air operations without space capabilities,” Loverro continues.

“In fact, in the seven years after the Chinese attack, from 2007 till 2014, the Air Force had yet to even begin to articulate the need to respond, much less begin to change their structure or their budget to do so. It took action from space advocates in the office of the secretary of defense, rather than on the Air Staff, to begin that change.”


Planet and Airbus Defense and Space’s geospatial division have agreed to co-develop imagery products. The partnership combines the lower resolution but daily global coverage of Planet’s cubesat constellation with Airbus’ fleet of high-resolution satellites that have more limited coverage. Will Marshall, Planet’s CEO, told SpaceNews that the collaborative agreement came about because each company’s individual customers were often seeking a mix of products from both of them. “Together this enable new kinds of applications and services that weren’t possible alone,” Marshall said, such as scanning the globe with Planet’s Dove constellation and zooming in on areas of interest with Airbus’s sharper imaging satellites.

François Lombard, director of Airbus Defence and Space’s Intelligence Business division, said the Planet constellation can act as an early-warning system for Airbus.


Aerojet Rocketdyne received a $79 million Air Force contract modification last Friday to continue development of the AR1 lower-stage engine for the Evolved Expendable Launch Vehicle program. The contract also includes work on the RL10CX upper stage engine. Last month United Launch Alliance announced it had selected Aerojet’s RL10 for the Centaur upper stage of the new Vulcan rocket, presumably over Blue Origin’s BE-3 engine. ULA has not announced which company will supply the lower-stage motor for Vulcan. Blue Origin is offering the BE-4 engine against Aerojet’s AR1. Work on AR1 is expected to be completed by the end of 2019 and work on RL10CX by the end of 2021.

Not a subscriber? Let’s fix that.

Subscribe to our mailing list

* indicates required

Email Format

View previous campaigns.

Sandra Erwin writes about military space programs, policy, technology and the industry that supports this sector. She has covered the military, the Pentagon, Congress and the defense industry for nearly two decades as editor of NDIA’s National Defense...