Expendable launch vehicle markets worth US$53 billion over next decade


The global expendable launch vehicles market will be worth US$53 billion between now and 2020 and will cover 693 launch vehicles, according to a new Forecast International report.

The company’s ‘The Market for Expendable Launch Vehicles’ forecast notes that even though the market faces challenges over the next 10 years, the outlook is not all gloomy.
“Several trends have emerged in recent years that have placed launch providers on more solid footing,” said the report’s William Ostrove, aerospace systems analyst and author of the report. “However, challenges will remain during the study’s forecast period.”

According to the study, the launch industry is in the process of recovering from a market downturn, brought on by an overabundance of supply that depressed prices and made it difficult for providers to turn a profit. But in recent years that has changed. “After years of poor market conditions in which many players were unable to compete, the commercial industry is now dominated by two companies – International Launch Services and Arianespace,” said Ostrove. “The situation has also allowed these remaining launch operators to increase prices to better cover costs.”

The analysis discusses a significant trend in the industry, that of the increased reliance on government contracts. Ostrove points out that “the lack of commercial customers has forced launch operator United Launch Alliance (ULA) to focus almost solely on government contracts. Indian, Chinese, Japanese, and many Russian launch vehicle operators have followed suit.”

Several obstacles face the market, including the increased competition that will challenge the established players, and dwindling demand. For example, Sea Launch will provide additional competition. The company emerged from bankruptcy and plans to restart operations by the end of 2011. New companies such as Space Exploration Technologies Corp (SpaceX) are also threatening the status quo by offering launch services at drastically lower prices than any of their competitors.

While competition is increasing, demand for launch services could drop in the future. Many commercial satellite operators will reach the end of their capital expenditure programs in the next few years. During that period, the reduced demand for satellites will lessen the need for launch services.

Despite the increased competition and fluctuating demand, launch vehicle production will remain strong overall during the coming 10 years to satisfy the need to carry government and commercial payloads into orbit, Forecast International predicts. Between 2011 and 2020, EADS Astrium, which builds the Ariane 5, will top Forecast International’s list of prominent manufacturers. Other major players include ULA, a joint venture between Boeing and Lockheed Martin that produces and markets the Atlas V and Delta IV launch vehicles; Soyuz spacecraft manufacturer TsSKB Progress; Khrunichev, maker of the Proton; and China Great Wall Industries, manufacturer of the Long March family of launch vehicles.