Expendable Launch Vehicle Revenues Increase as Industry Emerges
from Soft Market
Like the rest of
aviation, the expendable launch vehicle industry is emerging from a
sluggish market and a near-term resurgence now seems likely.
According to a recently released Forecast International market
analysis, "The World Market for Expendable Launch Vehicles:
2004-2013," launch industry revenues have risen over 60 percent
– from $3.7 billion in 2002 to over $5.5 billion in 2003.
Also, in 2003 seventeen new commercial geosynchronous
communications satellites were ordered, compared with only three in
2002. Satellite industry officials also believe that demand will
exceed capacity and the need to replace older satellites will push
satellite orders to about 20 by 2006. This rate of production is
then expected to remain steady for several years.
The analysis projects that the world’s launch vehicle
manufacturers will produce approximately 742 Expendable Launch
Vehicles (ELV) from 2004-2013. While some 397 of these will be
built in the 2004 to 2008 timeframe and only 345 from 2009 to 2013,
current market conditions indicate that the difference in value of
production between the first and second halves of the forecast
period will be within $2 billion. The total value of the ELV market
between 2004 and 2013 is expected to be just over $62 billion.
In 2003 there were 63 launches, of which 47 were strictly
government-funded missions. "Governments will continue to be the
dominant customer of the launch industry – a trend that has
been fully established," said John Edwards, Forecast International
space systems analyst. "It’s a good thing too," he added,
"since government contracts have been the saving grace of launch
providers during the doldrums of the commercial satellite market
and nowhere is this more prevalent than in the United States."
The European space
industry has long recognized the value of the guaranteed, lucrative
government contracts enjoyed by US manufacturers that serve as
insurance to the bottom-line. While Europe is not expected to match
US government launch activity, Edwards said, "the current wave of
satellite program consolidation and launch program restructuring
within Europe will bring the region much closer to the more
balanced military/commercial US model." The European Space Agency,
in its Ariane 5 managerial position, is intent on establishing a
unified space policy, and will likely push for minimum guaranteed
launch contracts from its member nations. This bodes well for the
Ariane 5, the Soyuz, Proton, and the upcoming Vega.
Satellite manufacturing trends, in accordance with consumer
demand, have split between large communications and interplanetary
systems and small, lightweight Earth observation/science
satellites. The market focus among the major players is the
development of greater lift capacity to Geosynchronous Transfer
Orbit (GTO), along with the capability to deploy multiple payloads
into separate orbits. "Access to all boosters is becoming
much easier because of the backup service agreements established
through firms such as ILS, Boeing Expendable Launch Vehicles,
Arianespace, Mitsubishi Heavy Industries, and EADS," Edwards said.
This trend is expected to continue in the larger ELV market and
trickle down to include the new smaller players as well.
The launch market is showing signs of recovery, and the
anticipated resurgence in demand for geosynchronous satellite
communications capacity bodes well for a considerable market
upturn. Industry leaders have learned, however, to proceed
cautiously and to not bank so heavily on commercial communications
market trends and projections. In the interim there will be plenty
of military constellations, remote sensing systems and scientific
spacecraft to engage the services of ELVs and keep production lines
moving over the next 10 years and beyond.