Report: Modest recovery for commercial launch industry
BY JEFF FOUST
SPACEFLIGHT NOW

Posted: October 2, 2001

  Ariane 5
Arianespace Ariane 5 commercial satellite launcher blasts off. Photo: ESA
 
Calling 2001 one of the worst years in the history of the commercial launch industry, a report issued Monday predicts only a modest recovery for commercial launchers next year.

"The Space Launch Industry: Recent Trends and Near-Term Outlook", a report published Monday by the Futron Corporation, estimates that the number of commercial geosynchronous orbit (GEO) spacecraft launched will be up 25% next year after a precipitous drop in 2001.

The Futron report forecasts that 20 commercial GEO satellites will be launched in 2002, up from the 16 the report estimates will be launched by the end of this year. The figure in 2001, however, is down nearly in half from the 30 that were launched in 2000. Adding commercial satellites launched to non-GEO orbits has only a minor change in the overall numbers: 23 such spacecraft in 2002 versus 19 in 2001 and 35 in 2000.

While the report is intended to forecast the future of the commercial launch industry, a key focus of the report is how bad this year has been for the industry. "2001 will turn out to be one of the worst years in the history of the launch industry with significant drops in almost all categories of launches," the report states.

The situation is even worse when looking at the American launch industry. The Futron reports states that there will be no more than four commercial launches in 2001 by American boosters, including only a single commercial GEO satellite: EchoStar 7, slated for launch in December on an Atlas 3B.

Part of the reason for the sharp drop in 2001 was a big increase in launches in 2000: the 30 commercial GEO satellites launched in 2000 was up significantly from the average of 24 a year between 1996 and 1999. The partial rebound forecast in 2002 is a sign of the cyclical nature of the commercial launch market, according to Futron.

"There is nothing wrong with the commercial launch industry, per se," the report notes. "The low 2001 numbers should not be seen as anything other than an unfortunate and painful drop in an otherwise healthy market."

"Commercial launch services are entirely dependent on the health of the commercial satellite industry," the report explains, "which reflects the demand for satellite telecommunications services, the buildout of terrestrial fiber-optic cable, and the effects of improvements in satellite technology."

The overall launch market does not see swings as wide as the commercial market, because the total number of noncommercial -- military and civilian government -- launches is holding steady about 50 per year worldwide. However, the report notes that commercial GEO launches are among the most lucrative type of launches, so even a modest drop in such launches can have a disproportionate effect on the bottom lines of launch vehicle companies.

The future begins to look brighter in the longer term for the launch industry. A record number of contracts in 2000 to build new GEO satellites should mean a corresponding increase in launches in a few years. "Whenever there is a large increase or decrease in satellite awards, the launch industry usually experiences a similar change about 3 years later," the report notes, although it does not address the possibility that some of those contracts may be deferred or cancelled in light of the current poor economic climate.

The future also looks better for the U.S. launch industry. The report forecasts that the number of commercial launches in 2002 will double, to 8. The introduction next year of two new families of heavy-lift launch vehicles, Boeing's Delta 4 and Lockheed Martin's Atlas 5, should allow those companies to capture a greater share of the worldwide launch market as commercial communications satellites continue to get heavier.

The report cautions, though, that those new launchers, developed as part of the Evolved Expendable Launch Vehicle (EELV) program with the Air Force, make up the bulk of the commercial launches slated for 2002. Because of their experimental nature, Futron believes its forecast of 8 commercial U.S. launches in 2002 "will be the most difficult to achieve" of all the predictions in its report.

Futron also believes that the non-GEO commercial market will level off in 2002 as the bulge in launches caused by the deployment of the Iridium and Globalstar systems in the late 1990s disappears. The market for such launches will not go away, however: Futron forecasts that demand for non-GEO commercial markets will be higher in 2002 than what it was in the mid-1990s, before the surge in such launches began.