August 6, 2024 | International, C4ISR, Security
April 29, 2020 | International, Aerospace
Will commercial and military launch programs ever be truly complementary?
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.
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October 25, 2023 | International, Land
Rheinmetall Q3 profits jump on strong ammunition sales | Reuters
German defence contractor Rheinmetall said on Wednesday its third-quarter profitability jumped on strong demand for weapons and ammunitions, with operating profit expected to top consensus estimates by 15%.
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March 23, 2020 | International, Aerospace
As USAF Fleet Plans Evolve, Can The F-35A Program Survive Intact?
Steve Trimble Original estimates for costs, schedules and quantities of the Lockheed Martin F-35 upon contract award in October 2001 proved highly unreliable over the fighter program's nearly two-decade life span, but one critical number did not: 1,763. That four-digit figure represents program of record quantity for the U.S. Air Force—the F-35's largest customer by far—accounting for more than half of all projected orders by U.S. and international customers. The Navy and Marine Corps, the second- and third-largest buyers of the combat aircraft, respectively, downsized their planned F-35 fleet by 400 aircraft in 2004. But the Air Force's quantity never budged. Although the Air Force's official number remains unchanged, the F-35A is facing a new credibility test after a series of public statements made by Gen. Mike Holmes, the head of Air Combat Command (ACC). Air Force will consider UAS to replace some F-16s ACC sets 60% goal for fifth-gen mix in fighter fleet In late February, Holmes suggested that low-cost and attritable unmanned aircraft systems (UAS) might be considered by ACC as a replacement for F-16 Block 25/30 jets (also known as “pre-block F-16s”) within 5-8 years. In congressional testimony on March 12, Holmes added that ACC's goal is to achieve a fighter fleet ratio of 60% fifth-generation jets, such as F-35As and F-22s, to 40% fourth-generation aircraft, including F-15s, F-16s and A-10s. He also said a recent analysis by the Office of the Secretary of Defense recommends an even split between fourth- and fifth-generation fighters. Barring a significant increase in the Air Force's authorized force structure, both statements appear to jeopardize the mathematical possibility for the F-35A to achieve the full program of record. As fleet acquisition plans stand today, the F-35A program of record appears sound. Lockheed has delivered at least 224 F-35As to the Air Force so far. The public program of record calls for the F-35A to replace A-10s and F-16s, which currently number 281 and 1,037, respectively, according to Aviation Week and Air Force databases. In 2010, Lockheed and F-35 Joint Program Office officials also confirmed that the F-35 would replace the F-15E fleet after 2035, which currently numbers 228 aircraft. Adding the number of F-35As already delivered, the Air Force has a replacement population of 1,770 aircraft. But Holmes' statements could significantly alter the equation. The service's latest budget justification documents show about 325 of the 1,037 F-16s now in the Air Force fleet form the “pre-block” fleet that could be retired by attritable UAS instead of F-35As. Holmes' goal of a fighter fleet with a 60% share of fifth-generation jets also complicates the forecast for the F-35A. Including the F-22 fleet's 186 aircraft, as well as 234 F-15C/Ds, the Air Force today operates a total fleet of 2,190 fighters. A 60% share of the fleet results in 1,314 total fifth-generation aircraft. After subtracting the numbers of F-22s, the Air Force would have room for only 1,128 F-35As, which implies a 34% reduction from the program of record of 1,763. The head of the Air Force's F-35 Integration Office acknowledges the numerical disparity implied by Holmes' statements, but he stands by the F-35 original program of record. “The program of record for this aircraft is really long,” Brig. Gen. David Abba said on March 9, referring to the Air Force's plans to continue F-35A production into the mid-2040s. “I understand that's a natural question to ask, but I don't think anybody's ready to make that sort of a declaration.” Altering the program of record would not change the steady, downward trajectory of the F-35A's recurring unit costs. Last year, Lockheed agreed to a priced option for Lot 14 deliveries in fiscal 2022, which falls to $77.9 million. But changing the overall procurement quantity does have an impact on the program acquisition unit cost (PAUC), which calculates the average cost per aircraft, including recurring and nonrecurring costs. In the program of record, the PAUC estimate is currently $116 million each for all three versions of the F-35. Noting the forecast length of the F-35 production program, Abba recommends taking a long-term view. “I would focus less on the program of record element,” Abba said, and more on the Air Force's plans “to keep options open.” https://aviationweek.com/defense-space/usaf-fleet-plans-evolve-can-f-35a-program-survive-intact