NEWTOWN, Conn. - Space launch has traditionally been the domain of governments. Even efforts to commercialize space transport such as the Evolved Expendable Launch Vehicle (EELV) program in the U.S. require government assistance to continue operations, as do launch vehicle providers such as Arianespace in Europe. For example, EELV prime contractor United Launch Alliance (ULA) almost exclusively launches U.S. military satellites. Arianespace requires an outright subsidy from the European Space Agency (ESA). Arianespace is also required to maintain manufacturing plants around Europe for its Ariane 5, a decidedly political goal to support jobs, meaning Arianespace cannot be considered an entirely commercial company.
The closest to a true commercial launch company today is International Launch Services (ILS), which markets commercial launches on Russia's Proton launch vehicle. The Proton itself conducts launches for both the Russian government and commercial customers. However, when marketed by ILS, it is the main competitor to the Ariane 5 for large geosynchronous communications satellite launch contracts.
More recently, increased focus has been put on entirely commercial ventures. The most famous of these is Space Exploration Technologies (SpaceX), which builds and markets the Falcon-9 launch vehicle. Another company, Stratolaunch Systems of the U.S., aims to build an air- launched vehicle that will compete on the commercial market. Orbital Sciences also remains an important player on the commercial market with its Antares launch vehicle.
Space tourism and human spaceflight are additional drivers of the growing commercial space market. Companies like Virgin Galactic and XCOR are building reusable spaceplanes that will carry human explorers and experiments into low-Earth orbit (LEO). This is one area of the launch industry that has generated a large degree of excitement.
The increased level of commercialization is being driven in part by new business models. Under traditional launch vehicle manufacturing models, components are built by dispersed subcontractors and then assembled by the prime contractor. The Ariane 5, mentioned above, is an extreme case of this model, since each ESA member needs to get a portion of work building the launch vehicle. However, SpaceX has introduced a more vertical business model in which the company controls each step of production, marketing, and launch. SpaceX founder Elon Musk believes that the vertical production model will significantly reduce costs. So far, this theory has been borne out. SpaceX markets commercial launches on the Falcon-9 at $61.2 million.
Due to SpaceX's success in getting launch contracts, Airbus and Safron have proposed creating a more vertically integrated manufacturing plan for the Ariane 5 replacement, Ariane 6. With a smaller footprint in Europe, Airbus and Safron hope to reduce manufacturing costs and become more competitive with SpaceX.
The number of commercial launches, as categorized by the U.S. Federal Aviation Administration, Office of Commercial Space Transportation, steadily increased between 2011 and 2013. Commercial launches increased from 19 in 2011 to 21 in 2012 and 23 in 2013. At the same time, government-operated launches declined from 66 to 58 during that period. As a result, launches operated by commercial entities increased from 22.4 percent of total launches to 28.4 percent. Because of the growing number of commercial launch vehicle operators, Forecast International expects this trend to continue.
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