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US Space Companies Will Benefit From Russia’s Retreat: Quilty Analytics

A Falcon 9 rocket launches 49 Starlink satellites into orbit on February 3, 2022.

SpaceX

Russia is rapidly cutting itself off from much of the global space industry in retaliation for Western sanctions over its invasion of Ukraine, according to an analyst report released Friday, and US companies stand to gain.

“Russia and Ukraine have been making significant contributions to the global space industry for decades.
rocket and propulsion experience centers providing launch services and propulsion systems to customers around the world,” Quilty Analytics, a specialist research and investment firm specializing in the space business, wrote at an industry briefing.

The Russian state space agency Roskosmos, with its Soyuz rockets, has long been one of the industry’s leading launch providers, delivering satellites, payloads and crew into orbit.

As Russia retaliates and withdraws its launch services to US and European entities, Quilty believes US companies are the net beneficiaries as a number of satellites are currently looking to launch into orbit. Elon Musk’s SpaceX is a “clear winner” in the launch market, research firm founder Chris Quilty told CNBC.

OneWeb, SpaceX’s competitor to Starlink, announced on Monday that it will move its Internet satellite launches to Musk’s company after terminating a launch deal with Russia’s Roscosmos. OneWeb says launches from SpaceX will begin later this year.

“Russian launch activity is ending from the market just as the pace of launches is hitting new historical records. Someone has to absorb this demand, but Europe is at a disadvantage because of their top-down approach to the market,” Quilty said. .

In addition to SpaceX, other companies providing space station services and developing new orbital habitats such as Boeing, Axiom, Sierra Space, Northrop Grumman, Lockheed Martin and Voyager are poised to benefit. Quilty also believes that Iridium Communications is likely to benefit from providing satellite communications to Ukrainian and NATO forces.

Russia’s retaliation in space

A Soyuz-2 rocket launches 36 OneWeb satellites on March 25, 2020 from the Vostochny Cosmodrome, Russia.

Roscosmos

Shortly after Russia invaded Ukraine, it began responding to sanctions through Roscosmos. suspending the OneWeb internet satellite launch earlier this month is one of the country’s first actions.

Quilty divided Russia’s space response into four categories:

  1. Soyuz rockets withdrawn from European launch market
  2. Termination of sales of rocket engines in the United States
  3. Threat of dissolution of the International Space Station partnership
  4. The cyberattack that disabled Viasat’s broadband access in Ukraine and other parts of Europe

In satellite and spacecraft manufacturing, Russian company OKB Fakel makes propulsion systems and supplies electric motors to OneWeb, as well as “several” manufacturers of large geosynchronous satellites, Quilty said.

“OKB Fakel estimates that it owns approximately 10% of the global spacecraft market, and they are likely to lose this share due to the actions of the Russian government,” Quilty wrote.

The withdrawal of Soyuz rockets from much of the global launch market also has serious implications. Soyuz has long played an important role in the launch market and is a staple for Roscosmos and the Russian space program.

Soyuz has also benefited greatly from demand for launches from the West, with international civilian customers accounting for 51% of Soyuz missions since 2000, Quilty said. In addition, since 2010, the Russian launch infrastructure with three main spaceports has accounted for a quarter of all launches in the world, the company said.

“The loss of Western customers and sources of demand (such as the ISS) will cause economic damage,” Quilty wrote.

US companies

Northrop Grumman’s Antares rocket lifts off from NASA’s Wallops Space Center in Virginia on August 10, 2021, carrying the Cygnus spacecraft carrying cargo for the International Space Station.

Terry Zaperach / NASA Wallops

The company said it would need other suppliers and eventually a new space station if Russia exits its partnership with the ISS early, or at least doesn’t renew its role beyond 2024.

US space companies will win. Quilty found that several companies are likely to fill this service gap – SpaceX and Sierra Space for cargo delivery, Boeing and SpaceX for crew delivery and four private space stations in development: Axiom’s, Northrop’s, Starlab and Orbital Reef.

Quilty also named five satellite imagery companies — Maxar, Planet, ICEYE, Capella and BlackSky — that benefit from the demand for up-to-date information on the situation in Ukraine.

“Several companies have been at the forefront of providing optical, hyperspectral and radar imaging during the Russian-Ukrainian conflict, but most (if not all) EO players will benefit from this unprecedented impact,” Quilty wrote.

In the satellite space, Quilty said Iridium could see growth in demand for its Certus broadband devices and push-to-talk devices and services.

“Iridium typically experiences surges in demand for its narrowband voice/data services during global crises, including earthquakes, weather-related events and military conflicts,” Quilty writes.

But Quilty also warned that Iridium could “face some backlash in Russia” where the company provides services to “thousands of users, especially in the energy industry.”

While United Launch Alliance, the rocket manufacturing joint venture between Boeing and Lockheed, uses Russian-made RD-180 engines for its Atlas V rockets, the end of engine sales “is not a major loss for ULA” as the company already has engines that it needs it as it is phasing out Atlas V use. However, ULA will not be able to capitalize on Soyuz’s stuck customers, Quilty noted, as the replacement company’s Vulcan rocket series has yet to debut and the remaining Atlas V rockets are already booked. .

On the other hand, Northrop Grumman still buys Russian-made RD-181 engines for its Antares missiles. In addition, the main missile body is produced by the Ukrainian state enterprise Yuzhmash, making Antares a “highly dependent” and arguably “most compromised” series of US missiles in the war with Russia. While Northrop Grumman has said it is well positioned to host two more Antares launches that cover orders through early 2023, the rocket’s future is in doubt.

“Without the resolution of the war, it is not clear how Antares will continue to operate without a massive modernization. NASA is the sole customer for the Northrop Grumman rocket,” Quilty wrote.


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