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Financial and Market Risks for Space Launch Providers

Presented by:

Charlie PrecourtATK Aerospace Systems

www.atk.com

Space Transportation Policy and Market Risks – Space Policy Institute November 16, 2011 – George Washington University

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Overarching Considerations for Launchers

Physics Very Challenging and Unchanging

• Operating environments extreme. Temperatures, loads, pressures, and rapid variations of these conditions lead to highly costly systems solutions.

• Dramatic Advances in propulsion and materials properties elusive, yet necessary to dramatically lower the costs of “managing the physics”

Market Relatively Small

• Flight rates much greater than six per year are rarely achieved for any sizable launch system

− Difficult to recoup development costs, resulting in high unit cost in proportion and infrastructure carrying costs high on a per flight basis

− Managing market risks exacerbates business model: flight losses, indemnification, payload or system delays/stand-downs, manifesting challenges

Broad set of mission requirements – Attributes sought often mutually exclusive

• LEO vs. GTO design

• Low payload weight or volume vs. heavy or large volume

• Low cost: per pound, per flight, or per year

– Multiple designs required/emerge to meet the wide spectrum of all customer needs.

– Synergies remain a challenge; yet where found and exploited, can reduce LV financial and market risks

• Customer: government vs. commercial

• Safety, reliability and availability

• Cargo/satellite vs. human rated

Consequences

Consequences

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Launch Industry Snapshot

Difficult Business Case

• Difficult to forecast market

• Limited customer base

• Launch and payload schedule slips

• Limited competition

• Difficult for new entrants

• 18 U.S. launches in 2011; only one was commercially-funded

Key • Yellow – 0-3 month slip• Orange – 3-6 month slip• Brown – 6- 12 month slip• Red – 1 year or more slip

Date Vehicle Mission Location Funded

U.S. Launches in 2011

Jan. 20 Delta IV NROL-49 VAFB Gov –A.F.

Feb 6 Minotaur I NROL-66 VAFB Gov – NRO

Feb 23 Shuttle STS-133 KDC Gov –NASA

March 4 Taurus Glory VAFB Gov - NASA

Feb. 27 Shuttle STS-134 KSC Gov - NASA

March 5 Atlas V OTV 2 CCAFS Gov – A.F.

March 11 Delta IV NROL-27 CCAFS Gov – NRO

April 15 Atlas V NROL-34 VAFB Gov – NRO

May 7 Atlas V SBIRS GEO1 CCAFS Gov - DoD

Jun 10 Delta II SAC-D VAFB Commercial

June 30 Minotaur I ORS 1 Wallops Gov –A.F.

July 8 Shuttle STS-135 KSC Gov – NASA

July 16 Atlas V GPS 2F-2 CCAFS Gov –A.F.

Aug. 5 Atlas V Juno CCAFS Gov - NASA

Sept 10 Delta II GRAIL CCAFS Gov - NASA

Sept 27 Minotaur 4 TacSat4 KLC Gov – ORS

Oct 28 Delta II NNP VAFB Gov - NASA

Nov 25 Atlas V MSL CCAFS Gov - NASA

Dec 19 Falcon 9 Dragon C2 CCAFS Gov - NASA

In 2011 there were a total of 48 international launches (with 3 failures); 10 of those were commercially-funded.

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Summary

• U.S. launch industry faces many challenges

• Industrial base has been dramatically affected by market realities in recent years

• Opportunities exist for improved business practices to lead to a sustainable launch industry

• Leverage lessons learned from DoD and NASA development programs

• Ensure business case closes for new vehicle developments before “launching” into them

• Leverage existing assets, workforce and infrastructure wherever practical

• Emphasize the importance of continuous improvement in reliability, safety, manufacturability, performance, launch availability, and system costs

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