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Launch Exec: Don't Ignore SpaceX's Competitive Threat; Industry Shakeout Ahead?

The commercial space launch industry should not be sanguine about SpaceX's forthcoming Starship heavy launch rocket's impact on competition, though changes won't be immediate, Arianespace Chief Commercial Officer Steven Rutgers said Tuesday at the Washington Space Business Roundtable. Meanwhile, a notable shakeout in the ranks of new and emerging launch providers is coming, launch executives predicted.

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Starship's initial focus will be launching SpaceX's Starlink broadband satellites and NASA lunar program missions, but it will start competing more with commercial missions within three or four years, Rutgers said. While Clint Hunt, United Launch Alliance (ULA) director-intelligence and defense programs, questioned whether Starship would be mission-ready soon, Rutgers cautioned against hubris. Hogan Lovells lawyer Steve Kaufman said the rising tide of demand might be saving launch providers -- that while SpaceX is selling more launches, so too are its competitors. Some launch industry experts see Starship and its expected impact on launch pricing further cementing SpaceX's domination of the marketplace (see 2403080017).

While many launch customers are focused on the bottom-line cost, it's not the sole consideration, panelists said. Some customers have other priorities, such as reaching a specific orbit, said Andrew Bunker, Rocket Lab vice president-government operations and business strategy.

While current demand is strong for launch services and new providers are emerging, many won't survive as the business requires time and significant capital investment, Rutgers said. Launch is challenging, and that's why Rocket Lab's main business is satellites and satellite parts manufacturing, said Bunker. He said many launch providers fade after spending years in development with nothing ultimately to show for it. The U.S. launch provider marketplace has strong providers like SpaceX and ULA, and government procurement programs that can help new providers, but there's a gap in the middle for launch companies that aren't big, said Bunker. Those middle-ground providers need must figure out that marketplace, he said.

The growing number of countries beginning investments in space could provide business opportunities, yet also could mean more launch competition, especially from state-subsidized launch providers, the panelists said. Countries like Japan and South Korea are seeing increased space investment and capabilities, Bunker said, pointing to Rocket Lab's 10-launch contract with Japanese earth observation company Synspective, announced last week. Many nations want to emulate the U.S. commercial space market, he said. Bunker said a sizable cadre of small launchers in the future will rely on state support.

The inaugural flight of Arianespace's heavy-lift Ariane 6 rocket is set for July 9, Rutgers noted. The company has sold 30 Ariane 6 launches thus far, with more than half for Amazon's Kuiper satellites, he said. Rocket Lab has yet to land a customer for the inaugural commercial flight of its medium-lift Neutron rocket, on track for a mid-2025 takeoff, Bunker said. When Rocket Lab's Electron rocket debuted in 2017, the company chose some bad launch agreements, said Bunker. He added the company now is more confident of its ability to wait, avoiding unprofitable launch agreements. Electron has made 50 launches, and demand is growing as it has started offering launches from Virginia's Wallops Flight Facility, he said.

Asked about Arianespace interest in a ride-sharing program using Ariane 6, Rutgers said the company's sweet spot is large satellites or constellations. Rideshare missions are not a focus, he said. Added Bunker, rideshare is a money loser, and SpaceX's Transport rideshare missions are aimed at extinguishing small launch competitors.