- Parabolic Arc
- May 26, 2023
Year in Review: Launch Industry Disrupted in 2014
SpaceX Founder Elon Musk has long talked about disrupting the launch industry with low prices and technological innovations. In 2014, the impacts of those efforts were felt far and wide as competitors responded to the threat the California company posed to their livelihoods.
ULA Pivots. With SpaceX reeling off one successful launch after another, ULA pivoted on several fronts. One was to announce efforts to significantly reduce costs on its highly reliable but pricey Atlas V and Delta IV boosters. But, even that proved to be insufficient as SpaceX threatened ULA on several fronts.
In August, ULA named Tory Bruno as its new president and CEO to replace Michael Gass, who had served in those roles since the company was founded in 2006. The following month, Bruno joined Amazon.com’s Jeff Bezos at a press conference to announce a joint venture to develop a new first-stage engine to power ULA’s launchers. The partnership involves Bezos’ secretive Blue Origin rocket company, which has been working on advanced propulsion technologies.
The new engine was not simply a response to SpaceX; it also reflected the deteriorating relationship between the United Statea and Russia over the Ukraine crisis. Officials in Washington decided it was time to stop using imported Russian RD-180 engines in the Atlas V’s first stage. Congress has set a deadline of 2019 for the engine to be operational.
The U.S. Air Force, which is ULA’s primary customer, has not signed off on any engine plan yet. Other manufacturers are interested in providing a replacement motor. Congress included $220 million in the defense budget for Fiscal Year 2015 to fund a new engine despite Air Force protests that it did not have a program and plan in place to spend the money.
ULA already has XCOR Aerospace developing a new upper-stage engine to replace the aging and expensive RL-10 motor used on both of its boosters. The engine will have similar performance, but it will be reusable and be much cheaper to produce. XCOR continued to make good progress on the new engine throughout 2014.
ULA also faced a dual threat to its monopoly on military launches in 2014. In June, SpaceX sued to invalidate a 36-rocket core deal the U.S. Air Force awarded to the company. That matter is still in litigation. And, as the year wore on, SpaceX came ever closer to obtaining certification to compete for military launch contracts. Certification is likely early this year.
SpaceX has helped to facilitate what officials are calling a “revolution” in European rocket development. ESA has thrown out the old model (for the most part), and it is placing unprecedented responsibility on industry for the continent’s next generation of launch vehicles.
In December, European space ministers agreed to fund the development of the new Ariane 6 booster and to guarantee a certain number of government launches annually for the initial years of operations. ESA also is giving European industry free reign to design and build the Ariane 5 replacement without having specifications dictated to it. Industry also will be responsible for finding commercial payloads for the new rocket.
European ministers further agreed to fund the development of Vega C, which is an upgraded version of the already operational Vega light launch vehicle.
In reaching these decisions, officials ended a simmering dispute that saw France backing a new Ariane 6 booster, while Germany preferred to focus on upgrades to the existing Ariane 5 launch vehicle. The two nations, who are the highest national contributors to ESA’s budget, are happy with the new plan. The Vega C project also pleased Italy, which has led development of that family of boosters.
Work on Ariane 6 will be led by a joint venture of Airbus Group of The Netherlands and Safran of France. In November, the European Commission gave its blessing to the deal, subject to conditions designed to preserve competitiveness in other areas.
ATK & Orbital Merge
In April, ATK and Orbital Sciences Corporation announced plans to merge into a single company with annual revenues of $4.5 billion. The two companies said the merger would
combine Orbital’s small- and medium-class satellite and launch vehicle product lines with ATK A&D’s rocket propulsion, composite structures and space power systems to produce even more capable and affordable space and missile defense products. At the same time, it will enhance ATK A&D’s strategic and tactical missile systems and propulsion, precision weapons and military armament, and commercial and military aircraft programs by leveraging Orbital’s systems design, engineering and integration capabilities to provide greater value-added to current and future customers.
The companies had hoped to complete the merger in December with separate votes of the companies’ shareholders. However, the deal was delayed due to the crash of an Orbital Antares rocket at the end of October. Shareholder votes have been rescheduled for Jan. 27, with the deal closing in February if it is approved. Last month, the deal was unconditionally cleared by the U.S. Department of Justice, which reviewed the deal for possible anti-trust violations.
As the United States and Europe sought to tap into the power of their commercial space sectors, Russia spent 2014 in a headlong rush in the other direction.
Fed up with years of launch failures, Russia’s leaders decided that the post-Soviet arrangement of having independent and quasi-independent space companies was no longer viable. In 2014, they began to implement a sweeping re-nationalization of the space industry under the new state-owned United Rocket and Space Corporation (URSC). The consolidation will bring together organizations employing about 196,000 workers.
Whether this decision will make a bloated industry competitive again remains to be seen. USRC must deal with an industry that has too much capacity and too many workers while simultaneously lacking a younger generation of engineers to replace its aging workforce. In response, officials have taken steps to increase low salaries and recruit new workers into the industry.
Much work remains ahead. Merging large and disparate organizations under a single company is a stressful and confusing process. In order to make the industry efficient and competitive, URSC will likely have to close down redundant facilities and conduct mass layoffs. That will result in even more stress, and it will strain the social safety net of an economy already reeling from low oil prices and Western sanctions over Ukraine. There’s also the scary scenario of unemployed engineers selling their knowledge of rocketry to any rogue regime with enough money to pay them.
Russia continued to lead the world in launches in 2014 with 38 orbital and suborbital flights. However, problems remained with quality control, with one launch vehicle failing to orbit a satellite and two others placing spacecraft in the wrong orbits.
The highlights of the year were successful maiden flight tests of the new Angara boosters. The Angara-1.2 booster flew a suborbital profile in July, followed by an orbital test of the larger Angara-5 launch vehicle in December.
Approved in 1995, Angara is a modular family of rockets designed to free Russia from reliance upon several Soviet-era launch vehicles, including Proton, Zenit, Rockot and Dnepr. The Zenit and Dnepr rockets involve joint ventures with Ukrainian companies.
Meanwhile, Russia made significant progress on the new Vostochny cosmodrome in the Far East. The spaceport is designed to lessen dependence on the Baikonur launch center in Kazakhstan. Officials are aiming to have an initial launch from Vostochny by the end of this year.
Angara and Vostochny are two major elements of Russia’s effort to recover from the Soviet Union’s breakup in 1991. The Russian space program was left with its principle launch site, Baikonur in a foreign country. Newly independent Ukraine also took over some of the Soviet Union’s space design and manufacturing bureaus.
Two Russian launch ventures retrenched in 2014. International Launch Services, which markets the Proton booster, laid off a quarter of its workforce. The reasons included a shift toward lighter satellites, weak sales resulting from recent launch vehicle failures, and rising tensions between Russia and Western nations over Ukraine.
Sea Launch also retrenched last year due to a light manifest. The company, majority owned by a subsidiary of RSC Energia, has been troubled by launch accidents, and it has failure to capture a significant share of the geosynchronous satellite market.
Energia has been eager to move operations out of the United States, but it has had no luck finding a viable new home. Over the years, stories have had Sea Launch being relocated to Kamchatka in western Russia or Vietnam, or being sold to an Israeli company. In December, Deputy Prime Minister Dmitry Rogozin said there were ongoing discussions with Brazil about relocating the company there.
What Lies Ahead
If all this sounds pretty disruptive, hold onto your hats. Things could be getting a lot more interesting very soon.
SpaceX’s ultimate disruption may lie just ahead. Later this week, the company will attempt to land the first stage of its Falcon 9 rocket on a barge. If SpaceX can make the Falcon 9 at least partially reusable, it will be able to cut launch costs even further, putting ULA, ILS, Orbital, the Russians and the everyone else at an even greater disadvantage.
17 responses to “Year in Review: Launch Industry Disrupted in 2014”
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nice article, thanks Doug
Awesome article Doug. Pleasure as always reading this site.
What I find interesting is that Russia’s is the only group that is not redesigning launch vehicles due to spacex. They have wanted reusability all along.
The only change from them is about going to the moon and using methane engines down the road.
The Russian coffer is low after splurging on the Sochi games and the Vostochny spaceport. Along with the recent oil price fall and Western sanctions after the Ukrainian adventures.
I know. But they were the only ones that were looking ahead.
I think Angara is their version of a redesign: modular design with simplified production lines, all key facilities in Russia to control the costs internally, get rid of foreign suppliers, getting rid of hypergolic propellants which are getting costlier to use, etc.
Their plan uses some of (but certainly not all) the tricks that SpaceX is employing to get their costs down: modular design (Falcon 9/Heavy) that simplify production lines, all key facilities owned by SpaceX (Brownsville), using internal designers and production rather than farming out the work, etc.
Remember, they ARE Russians. When we (Americans) want to solve an intractable problem, we say “we need more high tech stuff and simulate it with computers.” If you’re a Russian, you look at difficult problems and say “I need to make this simpler and then test, test, test.” Look at their key works on combustion instability (by Dranovsky), it’s a test manual, not a theoretical acoustics books. They know they don’t understand the problem, so they just come up with ever more complex ways to TEST for it.
Angara is a redesign, but it was done PRIOR to SpaceX, not once they got flying. In fact, Russia has been working on it since the 90s.
OTOH, the other launch groups are reacting to SpaceX.
I agree that Angara in one form or another has been thrown around for quite some time (at times it includes fly-back boosters and lifting body crew modules). I think the timing of getting it all done is not just a coincidence (part is, part isn’t). SpaceX doesn’t effect some of it: Russia wants to renegotiate their agreement to lease Baikonur, Ukraine being outside the sphere of dominance (they are under the influence) of Moscow, etc. Some of this is a response to their other competitors, if even the Chinese want to get away from hypergols in their next gen launchers, you know that ship has sailed.
While everyone is “reacting” to SpaceX-caused situation, no one is straight copying them. Much of the reaction seems to be a domino effect: My competition is reacting to SpaceX, so I have to react to them, and MY competition will react to both me AND SpaceX. Everyone knows they have to improve their efficiency if they are going to keep getting international business or even their own domestic defense contracts. Much of what ULA is doing now has been in their bag of tricks for decades, there just wasn’t any need to do it until now.
Since much of SpaceX’s commercial business has come at the expense of Russia (and China too), they are acutely feeling the need to improve their operation. Everyone is dusting off and prioritizing the efficiency measures they knew they could implement, but they didn’t because the economic incentive wasn’t there. Well, it’s there now, and this is how they are reacting.
Good write-up. Back in the space race, it was about having the best hardware, as opposed to the most cost-effective. Interestingly, ULA was content to do pretty much dod/NASA work, while allowing commercial work to flow to europe and Asia. Considering the lack of competition and the massive subsidies, it made sense.
Now, as you say, it may/may not be spacex directly, but the fact that all other groups are changing, thast is forcing change.
Thanks for the kind words. Just remember, my opinions are free and they’re worth about as much!
I wonder about that myself. Look at how effectively Boeing has been able to use the US Import/Export Bank (AKA “The Boeing Bank”) to get subsidies for the overseas sale of airliners. Why didn’t similar things occur for launches? Heck, if you wanted to, they could do a China: sell them the satellite and the launch and have the Im/Ex Bank finance it!
I think SpaceX is going to have a Tiger Woods effect on the launch business. With everyone reacting to the “new state of the game” you are going to see lots of change and shake ups. Tiger dominated for quite a while, but when the players adapted and learned the new lessons, it just meant the entire game got better. Even Tiger isn’t Tiger anymore. I think the question will be if this crosses an imaginary tipping point, where now space is able to explode with opportunity. Tiger was the catalyst that dramatically improved golf, is SpaceX the catalyst that dramatically improves space? What will that look like?
I am hoping that you are 100% on.
The rest of the launch groups need to meet SpaceX, or lose their own. For example, ESA giving the manufacturers free reign on how to design and build a new rocket design COULD be useful. With the recent announcement of that re-use study, I have hope for them.
ULA is obviously panicked and taking things up a notch.
Russia was already on the road.
China is NOT doing much, but I am guessing that once they have access to upgraded western and russian tech, that they will announce new directions.
OSC appears to be headed in the wrong direction.
Now, that leaves new private space like BO, Armadillo/Exos, masten, etc. Hopefully, they will jump into lunar landers, tugs/fuel depot, etc. These are much easier to design and build. In addition, without the others in the industry, I think that they could make some profit fairly quickly.
The ESA thing was really surprising since the entire scheme is based on “pay to play”. They must be REALLY concerned.
I think China is doing things, but they are only trying to catch up to the current generation of US tech, switching from hypergolic propellants to LOX/Kerosene and LOX/LH2. By the end of this they’ll have some nice Atlas V and Delta IV knock-offs with 3ish, 4ish and 5ish meter diameter cores for their medium and heavy lift vehicles. (If we have 4ish meter LOX/Kerosene and 5ish meter LOX/LH2 cores for A5 and D4 respectively, by golly China will too!) I don’t know what that will accomplish in the long run, but they are about 15 years behind ULA.
I’ve begun to really reconsider if the whole NGC Lunar Lander Challenge was a “good idea”. Those guys spent a lot of time and money, and they ended up with a product/service that no one really wanted to buy. A good challenge would leave everyone with a product/service they could sell TODAY.
Well, that is why I mention tugs/fuel depot. These small start-ups need a revenue outside of just gov. That is one that is desperately needed.
China’s next-gen launchers mostly predate SpaceX as a successfully enterprise, in particular CZ-7/LM-2H.
Great review of 2014, can’t wait to see what happens next
A really good job of laying out the significance of 2014 to the both the launch business and space programs in general.
yeah. And I think that is going to hurt them, not help them.
However, I do not think that was a reaction to SpaceX, but other issues.