Aerotech News & Review February 7, 2003
So, what does it all mean?
Analysts who follow the business of building and launching rockets and satellites anticipate that the loss of the space shuttle could eventually help rather than hurt the industry.
Clearly, revenues for the industry and thousands of jobs will be uncertain while NASA tries to figure out what caused the shuttle to break up during re-entry.
But the prevailing view among analysts is that the cost of delays in shuttle flights could quickly be offset by increased spending to renovate the three remaining orbiters and to find some kind of craft to replace them.
Whatever happens, many industry experts said, manned flight has become a small part of the overall industry. Most of the industry is tied to demand for satellites from the federal government and communications companies.
NASA spends about half of its $15 billion budget on projects related to manned flight; 92 percent of that spending flows to private contractors.
But analysts estimate that the industry takes in at least $20 billion from communications companies and other commercial clients - much more if one includes the revenues of satellite television companies and others that use it - while military spending with private companies adds another $10 billion to $20 billion.
The commercial sector is littered with struggling companies. Including shuttle flights, the number of rockets launched to put satellites into orbit plunged from 85 in 2000, to 59 in 2001 and recovered only slightly last year, to 65.
The weak demand was particularly painful for Boeing and Lockheed Martin, which are trying to recoup the billions of dollars they have invested in a new generation of Delta and Atlas rockets, both of which flew for the first time last year. The American rocket makers face competition from Russia as well as the newcomers Japan, China and India.
The launching business is just as competitive, with Arianespace, a European consortium, leading the commercial sector. Lockheed and the Russians market their rockets through International Launch Services, a venture based in McLean, Va., while Boeing has invested heavily in developing the technology to launch satellites at sea.
"The industry is extremely hungry, as hungry as it has been in a long time," said John Pike, who runs globalsecurity.org, a nonprofit space and military research organization.
Against that backdrop, any added spending by NASA in the wake of the Columbia disaster could provide a lift to some of the major players. The decisions facing NASA include what steps to take to upgrade the remaining three shuttles, which might involve increasing and accelerating the spending of $1.6 billion already projected for such work.
The agency is also expected to reconsider plans it had put aside to develop a craft that would be completely reusable, including the systems that lift it into space. And some analysts expect an acceleration of efforts to develop an orbital plane that, like the shuttle, would ride into space on a rocket and then fly back. But the new plane would be much smaller and would be dedicated primarily to taxiing astronauts to the International Space Station.
Three teams of aerospace companies are competing for the orbital plane contract, one led by Boeing, another by Lockheed Martin and a third by Northrup Grumman andOrbital Sciences. It is expected to be ready for a test flight in 2010 and regular operations in 2012.
Copyright © 2003, Aerotech News & Review
