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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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