Press Release

Contact: John Edwards, Space Systems Analyst

Phone: (203) 426-0800

Fax: (203) 426-4262

Web site: www.forecast1.com

E-mail: john.edwards@forecast1.com

Forecast International, Inc.

22 Commerce Rd. Newtown, CT  06470 USA

 

FOR IMMEDIATE RELEASE

 

Expendable Launch Vehicle Industry Slow to Recover

 

PARIS [June 13, 2005] — Forecast International’s “The World Market for Expendable Launch Vehicles” reports that nearly 755 ELVs of various types worth some $46 billion are slated to roll off production lines.  These boosters will launch the more than 800 commercial, civil, military and science satellites earmarked for production worldwide during the forecast period of 2005-2014.

Following two consecutive years of decreasing launch activity, the prevailing thought going into 2004 was that it couldn’t get much worse, but it did.  With only 55 orbital launches conducted globally in 2004, down from 63 in 2003, the launch industry reached a low not seen since the dawn of spaceflight.  Commercial launches in 2004 dropped by almost 40 percent compared to 2002, and lucrative government launches, the key to survival in the ELV industry, dropped by more than 13 percent from 2003.  Also, in 2004 only 16 new commercial GEO satellites were ordered, down from 17 in 2003, but this is still a veritable windfall compared to 2002, when only three were ordered.  

A positive note for the launch industry in 2004 was that, despite the slipping number of launches, prices began to show signs of firming up. “Over the past few years, the heightened competition and the number of debut missions had forced pricing down to a bare minimum,” said John Edwards, Forecast International space systems analyst.   “A balance now exists between supply and demand and therefore prices are starting to rise.” Based on approximations of winning bids, Forecast International estimates that pricing went up between 15 and 20 percent in 2004.

Launch-vehicle manufacturers that have managed to remain profitable during the current downturn have become the market model for recovery.  The key to their success has been guaranteed government backing and launch service alliances.  Launch-vehicle providers have by now learned the risks of relying almost exclusively on the commercial market.  “The U.S., Chinese and Indian manufacturers that supply rockets specifically for their nation’s indigenous launch needs were still affected by the slump, but not throttled by it,” said Edwards.  Europe, too, is beginning to push for the same standard of guaranteed government launches.  Indeed Arianespace has been picking up a rash of government launch contracts for European programs like the Skynet 5 and Helios 2 efforts.

“The next few years for the launch market will most likely be unremarkable in terms of launch activity as the commercial market continues to stagger through the land of no demand,” said Edwards. However there are positive indicators of a modest recovery on the horizon.  Stabilization and increases in launch prices mean that  providers of these services no longer have to offer their ELVs at near losses. Also many of the major players in the commercial satellite arena are expected to be in the market for fleet replenishment as their older spacecraft come up for replacement. “This will lead to a nice spike in commercial launch activity in the 2007-2008 timeframe,” said Edwards.  In the meantime there will be plenty of military, remote sensing, and science spacecraft requiring the services of ELVs over the next 10 years and beyond.

Forecast International, Inc. is a leading provider of market intelligence and analysis in the areas of aerospace, defense, power systems and military electronics.  Based in Newtown, CT, USA, Forecast International specializes in long-range industry forecasts and market presentations, including regular 10-year forecasts. Its products are utilized by strategic planners, marketing professionals, military organizations, and governments worldwide.  To arrange an interview with Forecast International’s analysts, please contact Monty Nebinger (203-426-0800, monty.nebinger@forecast1.com)