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Launch Supply to Far Exceed Demand for Next Decade
By Warren Ferster
Spacenews.com Staff Writer
posted: 11:55 am ET
18 January 2001

Launch Supply To Far Exceed Demand for Next Decade

HONOLULU — The global capacity for launching commercial satellites will dwarf demand over the next 10 years, putting heavy downward pressure on prices, an industry analyst here said.

Bruce Middleton, managing director of Asia Pacific Aerospace Consultants Pty. Ltd., Canberra, Australia, said past suggestions that a market shakeout is possible may be valid and that the U.S.-based Atlas and Sea Launch systems will face more pressure than some of the others.
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Sea Launch Poised for Liftoff

In contrast to other rockets capable of placing large satellites into geostationary orbit, the Atlas and Sea Launch systems are not assured of a steady diet of government missions, Middleton said here at the Pacific Telecommunications Council’s 23rd annual conference.

The Atlas is built by Lockheed Martin Corp. [LMT], Bethesda, Md., while the Sea Launch system was developed by a U.S.-Russian-Ukrainian-Norwegian venture led by Boeing Co. [BA], Seattle. 

Sea Launch Co. LLC, Long Beach, Calif., has no government business and Lockheed Martin has sold a relatively small number of Atlas rockets to the U.S. government, Middleton said.

Boeing, on the other hand, has garnered significant U.S. government business for its Delta rockets in recent years, Middleton noted. Similarly, the operators of the Japanese H-2A, Russian Proton, European Ariane and Chinese Long March rockets are assured a steady stream of business from their respective governments, Middleton said.

Officials with Sea Launch and International Launch Services (ILS), the U.S.-Russian venture that markets the Atlas and Proton rockets, insisted their vehicles will survive any shakeout that might be on the horizon.

"We at ILS fully intend for both vehicles [Atlas and Proton] to remain in the commercial and government marketplace for the foreseeable future," said Leonard R. Dest executive vice president of ILS, McClean, Va. The Proton is used for Russian government missions, although not as a part of the ILS business.

The Atlas rocket is and will continue to be used by the U.S. government, Dest said. He noted that the U.S. Air Force has invested heavily in Lockheed Martin’s planned Atlas 5 rocket under the Evolved Expendable Launch Vehicle program.

Sea Launch, Delta 4 find advocates

Amy Buhrig, vice president of marketing and sales at Sea Launch, said that while Sea Launch’s business is strictly commercial, the company is better positioned than others to succeed in that arena.

The company that survives in the launch industry is the one able to keep its prices down, and Sea Launch can do that, Buhrig said. Sea Launch rockets always will be built in Russia and Ukraine, she noted. Manufacturing costs are low in those countries.

In addition, Buhrig said, Sea Launch owns and operates its own launch range, which consists of an ocean-going rocket platform and a command ship. Other launch companies have to operate from government-owned ranges that charge user fees and occasionally are unavailable for commercial activity. "In the long run Sea Launch is very well positioned to be competitive in the commercial marketplace," Buhrig said.

Middleton, citing statistics compiled by the Commercial Space Transportation Advisory Committee, an industry panel that advises the U.S. Federal Aviation Administration on commercial launch issues, said there will be about 20 to 30 commercial launches to geostationary transfer orbit per year over the next decade. The global commercial capacity for launches to orbit, meanwhile, is between 64 and 68 per year, he said. Middleton counted only those vehicles capable of placing 4-ton payloads to geostationary transfer orbit.

The gap between capacity and demand will widen if some proposed new rockets actually reach the market, Middleton said.

But some launch industry officials said the gap is not as wide as Middleton’s analysis suggests.

Robert J. Sirko, Boeing’s director of international sales, Asia region, for the Delta rocket, said some of the launch capacity cited in Middleton’s study is unavailable for commercial use.

For example, Middleton’s charts indicate that Boeing’s Delta 4 rocket will be able to launch 17 times to geostationary transfer orbit per year starting in 2002. While he did not dispute the estimate of overall capacity, Sirko said a "sizable number" of the missions are committed to the U.S. government.

Middleton painted an even bleaker picture of the market for launching satellites to low Earth orbit. According to statistics compiled by Asia Pacific Aerospace Consultants, commercial demand for launches to low orbit will be about 43 over the next decade, or about four per year, he said. The various rockets capable of addressing this market will be able to launch a combined 226 times over the next 10 years, he said.

Middleton said his estimate of demand in the low Earth orbit arena assumes that the European- led SkyBridge broadband satellite constellation comes to fruition. Further, the capacity estimate leaves out the Russian-built Soyuz rocket and other vehicles that are in the planning stages, he said.


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