Smallsat launch and the real world
by Jeff Foust
Monday, February 21, 2022
Most conference panels are fairly anodyne affairs. Participants, even competitors in the same field, stick to their talking points and, at most, only politely disagree with one another. It often requires prodding from the panel’s moderator, or audience questions, to bring differences among the panelists into sharper focus.
| “So I would say, number one, small satellite customers want reliability. They need to get to space,” said Hart. “Satellites that are not placed in space are not that useful.” |
Sometimes, though, such prodding isn’t required. The right mix of personalities on a panel can turn it into something like MTV’s “The Real World” from 30 years ago, “when people stop being polite and start getting real.” That was the case a couple times during the SmallSat Symposium earlier this month in Mountain View, California, amid discussions about the hypercompetitive launch market for smallsats.
Big talk about small rockets
One panel at the conference covered the ever-popular topic of small launch vehicles, with representatives of five vehicle developers on stage. That was only a small cross-section of a larger market featuring dozens of companies worldwide developing vehicles, far more than even the most optimistic estimates of smallsat demand can support.
One question posed to the panel is what they thought smallsat customers were looking for in a launch service. “So I would say, number one, small satellite customers want reliability. They need to get to space,” said Dan Hart, president and CEO of Virgin Orbit. “Satellites that are not placed in space are not that useful.”
Other factors, he said, include “schedule dependability” and flexibility to get to their desired orbit. “Certainly price matters,” he added, “but as part of the whole value proposition.”
Another panelist strongly disagreed. “I don’t think it’s all about reliability,” said Chris Kemp, CEO of Astra. “We’re not flying people. We’re not flying billion-dollar satellites. The cost of manufacturing the satellite is often a fraction of the cost of the launch. If you have a company that can build several spare satellites, it’s the agility and the speed with which you can get to orbit, ultimately, that is of value.”
That’s particularly the case, he said, of megaconstellations, where the loss of an individual satellite has little impact. “The smaller your launch is, the more frequent it is, the less eggs you place in one basket,” he said. “I think there’s really high value, for startups especially, to be able to get something into orbit rapidly and precisely the orbit they want to get to, the inclination, on their schedule. And if you can make that attempt five different times at the same cost than a rocket that’s more reliable, many companies will make that trade.”
Hart jumped in. “I agree with you that reliability is not everything, but it is important,” he said. “I think if you asked satellite customers, it is one of the very important elements. A lot of them aren’t planning the way you just described, and there may be a day when they do, in which case it’ll shift. But a lot of them put their heart and soul into a couple spacecraft and they’re really counting on them to get there.”
That wasn’t the only time that Kemp took a contrarian or controversial view. “Starship’s coming,” he said of SpaceX’s next-generation launch system. “You’ll be able to move 100,000 pounds into low Earth orbit for a relatively small amount of money.”
“I think what we’re going to see as an industry is stratification between incredibly inexpensive freight services to space” like Starship, he said. “What’s on the other end of that spectrum is ultra high frequency.”
“That’s why we’re not going to do a big rocket. We’re going to let Elon [Musk] do that. He’s really good at it. We’re going to do a small rocket and we’re going to scale up: we’re going to scale the factory not the rocket,” he said. “There’s not a lot in the middle there.”
That seemed to be a swipe at companies that have talked about moving from small to medium-class vehicles, such as Rocket Lab and its Neutron vehicle under development. Lars Hoffman, senior vice president of global launch services at Rocket Lab, was on the panel but didn’t take the bait.
“We did the market research analysis looking out over the rest of the decade and we see a lot of these megaconstellations coming along,” he said. “There will be some bulk deployment, but we found that there was an opening there, a gap that needed to be addressed, and we’re filling that with our Neutron medium-lift rocket.”
| “What’s going to happen with space is what happened in Silicon Valley,” Kemp said. “Something big is happening and we’re just at the beginning.” |
Kemp believed there would be plenty of demand for small launch services, drawing comparisons to growth of the Internet. “We’re in the carcass of Silicon Graphics,” he said, referring to the Computer History Museum building that hosted the conference that once belonged to Silicon Graphics, a high-flying but now defunct workstation company.
“What’s going to happen with space is what happened in Silicon Valley,” he said, with “homogenous infrastructures developed at scale” replacing customized hardware. “Something big is happening and we’re just at the beginning.”
Not everyone shared his confidence. “The ecosystem overall is growing like crazy and there will be more demand,” said Jörn Spurmann, cofounder and chief operating officer of Rocket Factory Augsburg, a German small launch vehicle developer. “I still believe there’s too many providers. I think it will be very interesting to see who will still be here in a few years.”
“There’s probably not enough demand for all the providers,” said Hart. “The ones that make it will be the ones that execute, and execute consistently, in getting their customers to orbit, and the ones who can differentiate themselves.”
Cost versus price
The debate on that panel, though, was mild compared to another launch services panel near the very end of the conference. That brought together both small launch vehicle developers as well as rideshare service providers and launch brokers.
“I think reusability is clearly the most profound thing in the last five to ten years. It’s just really, dramatically reduced the price of launch,” said Curt Blake, president and CEO of Spaceflight, which arranges for launches of smallsats on both small launchers and as rideshares on larger vehicles. “It’s led to price pressure for all the different launch providers, which in turn has led to more satellites being manufactured and launched.”
SpaceX, of course, is the company that has been leading in reusability and lowering launch prices. “Reusability really helps drives the cost down,” said Jarrod McLachlan, senior manager of rideshare sales at SpaceX. “You’re not having to build an entire new rocket every launch. That helps.”
It prompted skepticism from other panelists, though. “Is this level of price from SpaceX sustainable or not? I don’t know,” said Marino Fragnito, senior vice president at Arianespace.
| “I actually don’t think price is the number-one driver,” McLachlan said. “The feedback I hear from my customers is schedule assurance is really the number-one thing.” |
“The launch services costs, in my mind, bear no relationship to the prices,” said Giulio Ranzo, CEO of Avio, which makes the Vega small launcher. He pointed to SpaceX’s price of $5,000 per kilogram for its rideshare launch services. “If you add that up, the revenue doesn’t make the cost of the launcher. There must be something else that makes the business case successful other than the price paid by the objects being launched.”
McLachlan didn’t go into details about pricing but noted that the company benefits from strong demand to specific orbits served by SpaceX’s Transporter series of dedicated rideshare missions. “Most of the smallsat demand is in Sun-synchronous orbits,” he said. “It’s much easier to aggregate than you might suspect from looking at it from a numbers standpoint because there’s synergies on the business case.”
SpaceX’s critics were not convinced. “I’m not sure cost of launching is going down. Price is going down, for sure; that’s what we see,” Fragnito said. “The price is crushed because of SpaceX’s approach to rideshare. Is cost going down the same way? I’m not sure.”
Both Fragnito and Ranzo were suggesting that SpaceX was, in effect, engaging in predatory pricing: charging less than its cost to gain market share. SpaceX’s McLachlan avoided the issue. “I actually don’t think price is the number-one driver,” he said. “The feedback I hear from my customers is schedule assurance is really the number-one thing. Being able to plan to a date and know that your spacecraft is going to go on that date is by far the biggest driver in the conversations I’ve had.”
Fragnito also appeared to be frustrated with a lack of support from European governments. He cited the case of Cosmo-SkyMed Second Generation (CSG) 2, a radar mapping satellite for the Italian government launched last month on a Falcon 9. Last fall, the Italian space agency ASI announced it procured a Falcon 9 launch for CSG-2 because of delays with the Vega C, whose first launch has been pushed back to no earlier than this May. However, ASI said it planned to use Vega for the next CSG spacecraft launching in 2024.
“We see institutional payloads coming to the US,” he said. “This cannot happen the other way around, you know. We’ll never launch a US government satellite in Europe.”
Someone in the audience then piped up. “What about James Webb?” The NASA-led James Webb Space Telescope launched on an Ariane 5 last Christmas Day from French Guiana.
“James Webb was a different story,” he said, claiming that, at the time the agreement between NASA and ESA was signed two decades ago regarding the launch, there was no vehicle in the US capable of doing so. “We would be very happy to launch US government satellites.”
Fragnito took one more shot at the issue as the panel ended. Even as the moderator tried to wrap up the session and usher the panelists off the stage, Fragnito wanted to address a question he saw submitted through an online system. “Is Arianespace selling below cost?” he said, reading the question.
He noted that Vega, which is sold by Arianespace, is produced by Avio, a publicly traded company. “You just go on the website and you check it out and you check the profit,” he said. “I would like to do the same thing for SpaceX.”
SpaceX, of course, is a privately held company, and does not disclose earnings. Vega, according to a presentation on its website, reported €197.8 million (US$223.9 million) in net revenues through the first nine months of 2021, with earnings before interest, taxes, depreciation, and amortization (EBITDA) of €8.0 million (US$9.1 million). Both, though, were down from the first nine months of 2020, including a 54% decline in EBITDA.
Fragnito’s own company, Arianespace, reported €1.25 billion (US$1.42 billion) in revenue in 2021. However, it did not disclose its profitability beyond a statement from a company executive that the company was roughly breakeven for the year.
If you’re going to talk the talk…
Minutes after that contentious panel ended, attention turned across the country to Cape Canaveral, Florida. At Space Launch Complex 46 there, Astra had its Rocket 3.3 vehicle on the pad for another launch attempt. One launch attempt was scrubbed five days earlier because of a range problem, while a second two days later was aborted just as the main engines fired because of a telemetry issue.
| “I’m not sure cost of launching is going down. Price is going down, for sure,” Fragnito said. “The price is crushed because of SpaceX’s approach to rideshare. Is cost going down the same way? I’m not sure.” |
There were no last-second hitches on this launch attempt, and the vehicle, designated LV0008, lifted off at 3 pm EST. All seemed to be going well until right after the upper stage separated, when onboard video showed it spinning and tumbling. The video was soon lost—or, at least, not shown on the company’s webcast.
“An issue has been experienced during flight that prevented the delivery of our customer payloads to orbit today. We are deeply sorry to our customers,” Carolina Grossman, director of product management at Astra, said several minutes later on the launch webcast. More than a week and a half later, the company has yet to provide any additional details about the failure.
The onboard video from the launch suggests there was a problem with the payload fairing separation, which takes place before stage separation. The fairing failed to separate cleaning, and the upper stage, having separated, ran into the fairing. After a few seconds, the fairing separates or is pulled away by the upper stage, which immediately starts tumbling.
This launch came after the first successful orbital launch of the vehicle last November, and means Astra is now just one for five in orbital launch attempts dating back to September 2020. That is probably not what the company had in mind when it deemphasized reliability.
This was also the first launch to carry satellite payloads: four cubesats sponsored by NASA, which paid for the launch through its Venture Class Launch Services program. Three of the cubesats were built by universities, and the fourth by NASA. Rather than the fleets of identical spacecraft that populate constellations, each was a one-of-its-kind satellite. No doubt the students and others who helped build them put a lot of heart and soul into them.
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