For many years, the US space launch market has been in the iron grip of United Launch Alliance (ULA), a joint venture between Boeing and Lockheed Martin. However, that grip is beginning to loosen with the arrival of SpaceX, a private space transport company.
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Founded in 2002 by Elon Musk, of PayPal and Tesla Motors fame, the company's ascent to certification for military space missions in late May has begun to pave the way to a more competitive space launch environment.
At the certification announcement, Deborah Lee James, Secretary of the Air Force, said: "SpaceX's emergence as a viable commercial launch provider provides the opportunity to compete launch services for the first time in almost a decade." This view was echoed by Musk, who only last year was suing the air force for the right to compete. The case was settled in January when the air force agreed to open up competition.
From a commercial point of view, SpaceX is already well integrated in the sector. In 2008 it won a contract from NASA to take cargo to the International Space Station (ISS) via twelve resupply flights, and the company's Dragon spacecraft has successfully carried out such missions.
However, it is for national security launches that Musk and SpaceX have fought hard in recent times.
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By GlobalData"ULA, for military launches, was king," says Matthew Bey, analyst at Stratfor, a global intelligence and advisory firm.
Falcon 9: reliability is key
In many respects, the hard work for SpaceX starts now. Despite its relative success with commercial missions, it is now the newcomer, up against the giant that is ULA.
As if to underline the risks of such a venture, the Falcon 9 rocket, with the Dragon spacecraft sitting atop, disintegrated 20 miles above earth after only 139 seconds into the seventh supply mission to the ISS in June. It was reported last year that the company's mission-success rate during eight years of launch activity was 67%, compared to ULA's 100%.
Elon Musk has rattled the US military space launch market, challenging the monopoly of United Launch Alliance by suing the US Air Force.
According to Bey, if SpaceX is to fully challenge ULA's monopoly, it will have to ensure that such incidents are the exception, not the norm.
"ULA has done a really good job," Bey adds "They haven't had many failures; I think the Atlas V has a 100% success rate of launching into orbit, so if they [SpaceX] want to become reliable and drive down the cost for the consumer, they need to make sure that [for] the Falcon and the Falcon Heavy [for heavier payloads], these incidents are not common."
Nevertheless, not all is lost, says Bey, who explains that such errors are only eliminated after many years of engineering expertise and tests, a challenge that SpaceX will have to meet if it wants to be considered a viable alternative.
"They will lick their wounds, get back together and get it on track," adds Bey. "I don't think it will necessarily impact their long-term objectives. I think they understand the level they need to get to, and that's one of the challenges.
"The perception of reliability will increase from their consumers [by] having successful launches over time. For the company itself the reliability can be developed based on testing: it is much more institutionalised as opposed to actual successful launches on the day.
"The experience is going to be from the tests and the engineering. Whenever they bring on a new launch system; that will only add to their data, experience and knowledge."
Driving down space costs
ULA has many years of this knowledge to fall back on, but SpaceX represents an unwanted intruder and, as such, the company will need to adapt accordingly.
In response to SpaceX's certification, ULA released a statement claiming it was looking forward to the challenge and was "well-positioned" to compete – highlighting cost reduction initiatives and its re-usable Vulcan rocket, which is currently under development.
To underline the scale of its dominance, in 2013 the company was awarded an Evolved Expendable Launch Vehicle contract, worth $11bn over five years, on a sole-source basis, blocking out other bidders.
Indeed, costs will play an important role in the coming years. In March SpaceX claimed during a congressional hearing that ULA launches cost $400m each, a figure that was quickly rejected by ULA, who insisted it was on average $164m. The company also outlined plans to reduce this to $100m.
SpaceX says on its official website that the Falcon 9 is approximately $60m for a launch in 2016, with the Falcon Heavy costing $90m.
Bey insists that for ULA driving down costs is crucial, "whether that's continuing to support ways for using re-useable rockets or also trimming down costs of construction [and] engineering", although he adds that the company will likely be concerned by SpaceX's emergence, considering it is a low-cost producer.
Moving away from the RD-180
Compounding this period of change is the future use of the Russian-supplied RD-180 propulsion systems. The US Congress has laid out a plan to prohibit the use of these after 2019 and focus on US-made products, and has authorised $220m in funding to help achieve this target.
"I think a lot of it at this point is political because it is a Russian-made engine," says Bey. "Three or four years [ago], before the Ukraine crisis, the RD-180 being a Russian rocket came up every now and then – especially if the US and Russia had a dip down in relations.
"The Russians would often float the idea of limiting exports of RD-180s, and the US would counter with limiting the imports, but since the Ukraine crisis has blown up over the last 18 to 24 months, it is more of a real, present threat on both sides. It's become a more politicised issue than it was before."
Some see reliance on space assets as a weakness, especially if satellites are destroyed by space debris or anti-satellite weapons.
Bey says that stopping the use of the RD-180 should now be the primary objective for ULA, but it won't be easy.
A report released in June states that at least 29 propulsion systems could be needed to develop the necessary revenue to fully develop ULA's Vulcan rocket. ULA chief Tory Bruno said: "Without the continued revenue generation of the Atlas until that new American engine is available, we will lack the funds to be able to accomplish that activity."
He continued that the law put in place by Congress would limit US access to space and give SpaceX a monopoly with its Falcon 9, which is domestically manufactured.
However, with the Falcon Heavy not yet ready and the recent Falcon 9 explosion causing doubts over its reliability, this presents questions.
"The weight requirements are going to require heavier launches that will eventually be provided by the Falcon Heavy rocket, but the certification for that will take until at least 2019," says Bey.
"If SpaceX…is also having problems with its own launches, you have the US, at least for military launches, prioritising specific launches over others in order to manage the limited supply of launches."
In a sense, an aggressive phasing out timetable could weaken one monopoly and create another in the same move, making the drive for competition and lower costs in military launches redundant.
So, while ULA has not yet fully relinquished its role as top dog in the launch market, times are changing, albeit slowly.
"I see no reason why a competitor to ULA cannot arise and be on an equal footing," says Bey. "It's just a very long development timeframe."
