Texarkana Gazette

Spacex could finally face some real competitio­n, but it may be too late

- CHRISTIAN DAVENPORT

Since its raucous entrance into the space industry more than two decades ago, Spacex has evolved from a scrappy startup perpetuall­y near death to a dominant behemoth that has continued to upend the market for space launches by achieving one unheard-of milestone after another.

But after several years atop the space industry, rivaled only by nation states such as China, Elon Musk’s space venture may finally be facing a space industry that has grown in its wake and is poised to challenge Spacex on a number of fronts.

Several space ventures, including Jeff Bezos’s Blue Origin, Rocket Lab and the United Launch Alliance - the joint venture of Lockheed Martin and Boeing - are poised to debut new heavy-lift rockets this year to compete with Spacex’s Falcon 9 workhorse. The Pentagon is looking for another provider for the lucrative business of launching national security payloads. Boeing is set to finally launch a crew of astronauts for NASA to the Internatio­nal Space Station, giving NASA, which has relied on Spacex for the past four years, another way for its astronauts to orbit. (Bezos owns The Washington Post.)

And while Spacex has dominated the internet satellite industry by launching some 6,000 Starlink satellites, Amazon, backed by a $10 billion investment, is gearing up to fly its own constellat­ion as well.

Those developmen­ts, however, may be too late to pose a serious challenge, analysts say, as Spacex continues to press ahead with reserves of money, momentum and a wartime-like urgency that Musk has infused into the company. Its deep ties to NASA and the Pentagon, which have awarded it billions of dollars in contracts and elevated it to prime contractor status, have also given it a lead that will be difficult to erode.

And Spacex continues to operate at a blistering pace, expanding the frontiers of what is possible. It flew its Falcon 9 rocket nearly 100 times last year - an unpreceden­ted cadence in an industry that for years flew closer to about a dozen times a year. This year, it’s aiming for nearly 150 launches of the booster, which flies back to a landing site so it can be reused.

In a report, Morgan Stanley estimated that Spacex’s revenue for fiscal year 2024 should reach $13 billion, a 54 percent increase over last year. By 2035, as Spacex’s Starlink internet satellite constellat­ion grows, revenue could reach $100 billion, the firm reported.

In the fourth quarter of last year, Spacex lifted more than 842,000 pounds to orbit in 27 launches, the most by any launch company. China came in second, hoisting nearly 90,000 pounds over 15 launches, according to Brycetech, an analytics and engineerin­g firm focused on aerospace.

“At the core, Spacex’s audacious

vision and engineerin­g successes have disrupted satellite launch, have disrupted exploratio­n, have disrupted satellite manufactur­ing, have disrupted all sorts of submarkets and aspects of the space ecosystem in what I would argue is a positive way: creating pressure for lower prices and enhanced performanc­e to go with those lower prices,” said Carissa Christense­n, Brycetech’s CEO. “Now, does that mean I think it is a good idea for Spacex to be the sole monopoly provider? No, I do not.”

Spacex has achieved that position by breaking into a market that for decades had been dominated by the government. Spacex’s success in doing so has also opened the door for other commercial space companies. Without Spacex, “I don’t think Space Rocket Lab would exist, to be honest with you, because they blazed the path that said space can be commercial and space is investable,” said Peter Beck, Rocket Lab’s CEO.

The way to compete against Spacex, Beck said, “is to outsmart them and outwork them. You have to be the mosquito, that is for sure. And you have to be very agile. … The crazy thing about a mosquito is that it’s kind of annoying, but there’s a nonzero chance that you might get bit, get malaria and die,” he said.

Bill Weber, the CEO of Firefly Aerospace, agreed that Spacex is a tough competitor that has upended the market. “You could see a scenario where one provider has such a lead … that it is literally impossible to catch up on the order where there will be true competitio­n,” he said. But despite Spacex’s dominance with its Falcon 9 rocket, he said there is a still a market for small satellites for companies like Firefly, which operates a smaller rocket known as Alpha.

“There are customers that want to buy small and medium launches,” he said, especially if they don’t have to be batched with other satellites, which can affect timelines and the orbits the satellites are transporte­d to.

And Spacex isn’t eager to cede any territory. “You don’t have to look far for examples of behaviors that are clearly designed to stifle competitio­n,” Beck said. “There’s nothing the matter with pushing hard to create barriers for others to enter, but no monopoly in history ever survives. I think the U.S. government recognizes that along with [the] industry.”

One example of how Spacex made it tough on competitor­s was its move a few years ago to launch smaller satellites in bunches at very low prices in a “rideshare program” that was seen in the industry as a tactic to target smaller launch companies such as Rocket Lab by taking away customers. And Spacex’s perch atop the industry has allowed it to dictate timelines and prices for satellite launches that favor its launch cadence and schedule, industry officials said.

“Let me be super clear: We’re not complainin­g,” Beck said. “We like competitio­n. So all of this is all good.”

Beck also said that Musk’s acquisitio­n of Twitter, now X, and his foray into controvers­ial political and cultural issues is a potential weakness that “certainly makes people uncomforta­ble. At the end of the day, if you’re delivering important national security missions, the buck stops with the CEO.”

“I don’t own a social media company to start with,” he said. “So that’s a bonus. And I reserve my Twitter comments to factual elements of what happened. … I much prefer to just let the engineerin­g and the execution do the talking. At the end of the day, everything else is just kind of hyperbole.”

Spacex declined to comment.

The U.S. government and the commercial sector are eager to work with an array of space companies, so there are still plenty of opportunit­ies. The Pentagon, which recently released a new strategy designed to better work with the commercial space sector as a whole, is eager “to harness the remarkable innovation of the commercial space sector to enhance our resilience and strengthen integrated deterrence as a department,” John Plumb, assistant secretary of defense for space policy, said in unveiling the initiative earlier this month.

The strategy itself states that, “integratin­g commercial space solutions will strengthen resilience by increasing the number of commercial providers, diversifyi­ng supply chains, and expanding the variety and number of solutions the department can employ.”

Last week, the U.S. Space Force released a commercial space strategy of its own, which states that the service would seek to avoid “overrelian­ce on any single provider or solution.”

A recent Spacex rideshare mission known as “Bandwagon” raised concerns among many in the launch industry because the price was extremely low, according to industry officials who saw it as a tactic to take business from competitor­s. “Competing is one thing, predatory is another,” one industry executive said.

Some companies even complained about the mission to the Pentagon because “there was no business reason to fly that mission at that cost,” according to the executive, who spoke on the condition of anonymity to discuss internal deliberati­ons. “We’ve communicat­ed to them, quietly, that you may want competitio­n, but what do your actions say? Because we can’t compete against that.”

For years, many in the industry hoped Bezos’s Blue Origin would mount a challenge to Spacex. But while it has flown tourists to the edge of space and back, it has struggled to compete. It has yet to launch a rocket to orbit and in 2021 lost out to Spacex on a prestigiou­s NASA contract to ferry astronauts to the lunar surface.

This year, however, it is planning, finally, to launch its New Glenn rocket, which like the Falcon 9 is intended to have a reusable booster stage, and the company is a favorite to become a third launch provider for the Pentagon. Last year, after dramatical­ly recrafting its proposal, it won a $3.4 billion contract from NASA to fly astronauts to the moon, adding to NASA contracts it’s already received to build a commercial space station and solar cells on the moon.

Bezos also recently installed Dave Limp, a former executive at Amazon, as CEO of Blue Origin, and has said that the company would move much faster than it has in the past. The head of the company’s lunar program, John Couluris, said on CBS’S “60 Minutes” that the company aims to land a spacecraft on the moon by the middle of next year - a perhaps quixotic timeline but one that means it could beat Spacex to the lunar surface.

 ?? ?? Rocket Lab engineer RJ Smith works on the Rocket Lab launchpad as they prepare to launch satellites from NASA'S Wallops Flight Facility in 2020. (Jonathan Newton/ The Washington Post)
Rocket Lab engineer RJ Smith works on the Rocket Lab launchpad as they prepare to launch satellites from NASA'S Wallops Flight Facility in 2020. (Jonathan Newton/ The Washington Post)
 ?? (Eric Lee for the Washington Post) ?? Dave Limp, then senior vice president of devices and services, speaks at Amazon's HQ2 in Arlington, Va., on Sept. 20. He's now the CEO of Blue Origin.
(Eric Lee for the Washington Post) Dave Limp, then senior vice president of devices and services, speaks at Amazon's HQ2 in Arlington, Va., on Sept. 20. He's now the CEO of Blue Origin.

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