April 29, 2020 | International, Aerospace
By: Kirk Pysher
In a few months, the U.S. Air Force will choose two of the four competing space companies to provide five years of launches in the National Security Space Launch (NSSL) program. One of the core objectives for this program is to increase affordability by leveraging the technologies and business models of the commercial launch industry.
Is that a realistic expectation given the current commercial space market and historical precedents?
Historically, the commercial launch market has seen significant variability. Launches of commercial communication satellite constellations began in the early 1970s with NASA serving as the launch provider. New launch providers began to emerge from the commercial world after the Commercial Space Launch Act of 1984 allowed the private sector to provide launch services. We then witnessed a remarkable growth in commercial space launches in the 1990s that peaked just before the turn of the century.
Then, until about 2014, the commercial launch market stabilized at 20-25 commercial geostationary orbit satellites per year that were split essentially between three global launch suppliers. Since then, new entrants into the commercial launch market and pricing pressure from terrestrial-based communication systems have significantly impacted the viability of the commercial launch market, reducing profit margins and returns on investment across the board.
The expected 20-25 commercial GEO missions is now in the range of 10-15 launches per year and is expected to remain at that level beyond the NSSL five-year period of performance.
With new entrants into the commercial launch market, that 40-50 percent reduction in annual launch opportunities will now be competed among seven to eight global launch providers, putting further pressure on the viability of those launchers. Additionally, commercial launch revenue is also expected to decrease over that period by as much as 30 percent as satellite operators look to reduce their launch cost through shared launch, smaller spacecraft and reduced launch pricing.
Given the projected commercial launch market and additional competition from new entrants, launch service providers will have difficultly building and maintaining viable commercial launch business plans, let alone having commercial launch-driven capital to invest in new technology.
History has proven that no commercial launch service provider can succeed without having an anchor government customer. The commercial launch market simply has not been able to provide the stable, long-term demand needed to maintain affordable pricing, innovation and factory throughput for the Air Force to benefit from. History has also demonstrated that it is the Air Force with NSSL since 2003 that has provided the launch service providers with a stable number of launches.
The defense and commercial launch markets have a fundamental difference. The former focuses strictly on satisfying national security mission requirements in space — needs that are driven by risk, strategy and geopolitical events regardless of vulnerabilities in commercial markets. The defense market began in the late 1950s with industry designing, developing and building launch vehicles for the U.S. government to place critical national security satellites into orbit. Early on, we saw a large number of launches in the beginning — peaking at more than 40 in 1966 — before activity levels decreased to level out by 1980.
After more than 400 launches of defense-related satellites, the defense launch market finally settled into an average eight launches annually, whereas the commercial launch market is strictly tied to the ability of global satellite operators to close business plans and obtain institutional and/or private funding on new and replacement satellites.
The global COVID-19 pandemic is a stark reminder of the vulnerability of all commercial markets. Airlines, aircraft manufacturers and commercial space companies are needing to seek tens of billions of dollars in government assistance; and private commercial space investors are also reassessing their risk postures, as is demonstrated by the recent OneWeb bankruptcy filing.
Given the projected decline in commercial launch along with the historical precedents, there would be significant risk for the Air Force to expect to leverage benefit from commercial launch. In fact, I believe history has demonstrated that it is commercial launch that is able to leverage the benefits derived from the steady cadence of defense and civil government launches. The Air Force, in its role as anchor customer, needs to clearly understand commercial market dependencies and business cases of its key providers. With that understanding, the Air Force will mitigate any risk of critical national security missions being dependent on a finicky and fluctuating commercial market.
Kirk Pysher is an aerospace executive with more than 20 years in the commercial launch market, serving most recently as the president of International Launch Services until October 2019.
February 12, 2024 | International, Aerospace
The new order is subject to approval by the Norwegian Parliament and will come in addition to repurchasing the equipment that has already been donated to Ukraine.
February 26, 2020 | International, Aerospace, C4ISR
By: Jen Judson WASHINGTON — The U.S. Army is requesting $364 million to conduct a division-sized exercise in the Indo-Pacific region in fiscal 2021, the service confirmed to Defense News. Yet, the cost breakout details are classified, according to an Army spokeswoman. The exercise is fueled by a rising China, characterized in the National Defense Strategy as a long-term, strategic competitor of the United States. The NDS lays out a world where great power competition rather than counterterrorism will drive the Defense Department's decision-making and force structure. While the U.S. Army has 85,000 permanently stationed troops in the Indo-Pacific region and is already conducting exercises such as Pacific Pathways with allies and partners, the service is aiming to practice rapid deployment from the continental United States to the Pacific. In FY20, the Army will conduct a smaller version of Defender Pacific while Defender Europe will get more investment and focus. But then attention and dollars will swing over to the Pacific in FY21. Defender Europe will be scaled back in FY21. The Army is requesting just $150 million to conduct the exercise in Europe, according to the Army. This year it has been reported that Defender Europe, already underway with troops and equipment arriving at ports on the continent this month, will cost about $340 million, which is roughly in line with what the service is requesting in FY21 for the Pacific version. The only specific funding lines broken out for the FY21 Defender Pacific exercise is home station training; it's unclear if those numbers are included in the total cost. The Army is requesting $150,000 for home stationing training devoted specifically for Defender Pacific and is also asking for another $214,252 for an “expanded level deployment exercise that demonstrates employment of [Continental United States]-based forces into the Pacific Theater,” according to budget documents. The funds include additional transportation, maintenance and operations for the exercise. Defender Pacific will build upon the U.S. Army's expanding role in the region. The service is already growing its Pacific Pathways exercise series and plans to focus on reinforcing the Oceania region this year. The series began in 2014 and has supported training efforts that satisfy bilateral needs between the U.S. Army and its allies and partners in the region in roughly three rotations each year for about 10 months total. Last year, Pacific Pathways shifted from shorter rotations that involved more countries to longer visits that involve fewer countries as a way to improve bilateral relations. And participation has grown from a battalion-sized task force to roughly the size of a brigade. The Defender series is intended to be a regular exercise each year in the Pacific and Europe with the regions trading off being the larger exercise every other year. https://www.defensenews.com/land/2020/02/25/army-wants-364-million-to-put-on-defender-pacific-in-fy21/
April 17, 2024 | International, Aerospace
The contract, which is worth $320 million, also includes reconnaissance pods and training armaments, such as AIM-9X and AIM-120 missiles.