Space in 2019: Five Big Things to Watch
As we started 2019, Avascent’s Space team reviewed both industry developments in 2018 and January early-indicators as to where the industry may go in the rest of 2019. With Space more dynamic than ever, there was a lot to choose from. We settled on five “big things to watch” in 2019 – all of which could have an outsized impact on the space industry for years to come.
Can it keep its space momentum rolling?
was a landmark year in Space for China, as it established itself as a true global Space leader: China completed 38 successfully-launched space missions (a record number for any country); it moved closer to fully deploying its own version of GPS, putting 18 more Beidou GNSS satellites in orbit; China Great Wall Industry Corporation (CGWC), the state-owned satellite manufacturer, also reported three GEO orders – not many, but more than any other single manufacturer; and, Chinese launch start-ups OneSpace and iSpace both conducted suborbital flights, further propelling China’s nascent, but fast-developing commercial space industry.
began with a victory lap for China’s space exploration program: CNSA (China’s version of NASA) completed its first-ever landing of a lander-rover on the far side of the moon, receiving global media coverage. CNSA is now turning its focus to 2020 – gearing up for the launch of the first module of the Chinese Space Station and the first independent Chinese mission to Mars.
What to Watch
The rest of 2019 will be a test for China’s commercial space activity:
- Does Private Space Launch Finally Take Off? OneSpace, iSpace, and LandSpace (again) are all expected to attempt orbital flights. These same private companies may also see their first commercial launch orders trickle in.
- Great Wall Rising? CGWIC’s January 15 agreement with Argentina’s Satellogic to launch 90 Earth observation satellites is a sign of China’s growing presence in international markets. Keep an eye on whether Great Wall can win more international commercial orders in 2019 – which would have major implications for current leaders Arianespace, SpaceX and ILS.
- Can Chinese NewSpace Keep Pace? A host of Chinese commercial companies are looking to build their own fleets of remote sensing and communications satellites. Watch for a successful test flight for Galaxy-1, GalaxySpace’s answer to OneWeb, as an indicator of whether China can keep up with the US in LEO broadband.
Mars bound, or running aground?
saw the world’s most famous space company, SpaceX, led by one of the world’s highest-profile entrepreneurs, Elon Musk, make huge strides. SpaceX launched a record 21 times. Its Falcon-Heavy rocket debut became the second-most live-streamed video on YouTube: 2.3 million global viewers watched Rocket Man and his Tesla drift into the cosmos and cheered as the rocket’s boosters nailed a (jaw-dropping) simultaneous dual-landing. SpaceX also secured much-needed financing – a $250M loan and another $273M in equity. But SpaceX also faced a surprise major setback – after securing $97.8M in development funds for its engine, it failed to make the cut for the Air Force’s Phase 1 new launch vehicle development competition – and watching three competitors share almost $2 billion in development funding.
started with another shock to Spacex watchers: layoffs of ~700 SpaceX staff, including technicians, engineers, machinists, managers and supervisors, even as it ramps up development of a new interplanetary spacecraft, Starship, and its new BFR/Super Heavy rocket. Moreover, there is talk about potential cash flow troubles if launch revenues can’t support capex needs and the still-nebulous Starlink broadband internet business doesn’t develop fast. And of course, SpaceX must continue to execute on its commercial and NASA launch manifest, and it is in the midst of a major lobbying effort for Department of Defense launches.
What to Watch
Keep a close eye on SpaceX’s financial position in 2019: Its three major development programs — Starship, Super Heavy, and Starlink — by some estimates could require well over $10B to complete. But if additional US Government funding doesn’t materialize, tightening capital markets and challenging development timelines could put the squeeze on SpaceX’s cash. Will Elon’s sky-high ambitions come crashing down to Earth in 2019? Or will he and SpaceX President Gwynne Shotwell prove doubters wrong again, and keep doing the seemingly-impossible?
- Launch Manifest Success?: SpaceX’s 2019 manifest includes 17 Falcon-9 launches, two Falcon Heavy missions, and initial test hops of the Super Heavy launch vehicle. It also plans to be the first US commercial space company to launch astronauts to the ISS in June 2019. Keep an eye on execution against schedule.
- Starlink Progress and Business Plan Clarity?: SpaceX’s LEO constellation StarLink has been critical to the company’s financial plans. But the (often very-public) SpaceX has shared little information about Starlink’s progress and business plans, so the industry will be looking for signs that Starlink will finally hit high gear.
- Funding and Cash Flow?: Can SpaceX secure the billions in financing required for all of its industry-pushing ambitions? Or will cash challenges force the company into delays, or even big changes in its plans?
3. New Space
A year of validation or a year of reckoning?
proved to be another banner year for New Space. Among many accomplishments, Rocket Lab launched its first customers and ICEYE orbited its first SAR satellites, all while New Space companies raised an eye-catching ~$3B in equity investment.
however, started with the aftermath of notable setbacks. Deep Space Industries and Planetary Resources both endured unceremonious exits from space mining; Earth observation company UrtheCast saw its financial struggles continue, and communications operator Sky and Space Global missed a key payment to its core supplier. Rumors continue to swirl around the financial stability of more mature players such as Planet, and even the larger, established space player Maxar faces uncertainty as a series of events drove its share price down almost 90% from 2018 highs.
What to Watch
While start-up companies always see a mix of successes and failures, New Space is nearing an inflection point in 2019 with planned offerings in NGSO constellations, next-generation antennas, and dedicated small launch.
- OneWeb Financing? OneWeb, often seen as a bellwether for New Space satellite operators, has announced a new low-cost antenna, and its first launch slated for February with Adrián Steckel the most recent in a rapid succession of CEOs – noted that the company has “operated in stealth mode for too long.” But there may be a reason for that: OneWeb has seemingly been frozen in its fundraising at $1.7B – more than $3B short of its estimated $5B cost. Can OneWeb launch successfully in 2019? And will it be able to secure new financing and get the scale it needs to enter the market?
- New, Better Antennas?: Antennas aren’t quite as sexy as rockets and satellites, and therefore seem to fly below the media radar. But space, and New Space, doesn’t work without antennas and ground networks. Antenna providers continue to be active – if relatively quiet – hoping to deliver in 2019 after years of promises of low-cost, low-profile, high-performance products. Phasor will field test some of its products for possible 2019 release, Isotropic Systems started the year with an impressive Series A funding round, while Kymeta looks to work out the kinks and continue ramping up production. Will the antenna manufacturers deliver on these promises in 2019?
- A New Space Launch Shakeout?: Notable small launch startups – including Firefly, Vector, and Virgin Orbit – all plan initial missions in 2019. With more than 100 small launch vehicles in development globally, the question might not be “can they fly?”, but “Can they sell?”. Can new small launch companies secure paying customers in 2019? For those who can’t, do they have the financing to hang on?
4. Citizen Astronauts
First class or business to fly space?
saw Richard Branson’s Virgin Galactic make significant progress testing SpaceShipTwo when it reached a peak altitude of 83km – exceeding the boundary of space and earning its pilots their astronaut wings. And Sir Richard was not alone – Jeff Bezos’ Blue Origin completed two flights of its New Shepard vehicle in 2018 that carried a mannequin passenger. Though citizen astronauts are not a new concept – some 230 individuals have flown to the ISS – the zero-g experience and dazzling views of Earth have historically been limited to government astronauts and the super-rich. Commercial companies are hoping to change this dynamic.
started with Blue Origin completing its tenth successful test – and first commercial mission – of its New Shepard vehicle, traveling more than 100km and carrying eight NASA payloads. Yet for all of the technical accomplishments bringing us closer than ever to commercial space tourism, the path to profitability remains to be seen. Virgin Galactic currently sells tickets for ~$250,000 and Blue Origin has yet to disclose prices. Further, both companies must still complete test passenger flights before initiating commercial flights.
What to Watch
- Virgin Galactic expects to send its first astronauts to space in Q2 after three more successful test flights; tourists are then slated to follow
- Blue Origin appears on pace for crewed flight with plans for passenger tests by the end of 2019
- If these companies can meet these ambitious goals, it seems that 2019 could indeed be the year of the citizen astronaut
5. US Space Policy
The Right Stuff or Game of Thrones?
included a new Presidential directive to stand up a Space Force on par with the Navy, Army and Air Force; a less-ambitious Congressional mandate to stand up a new Space Development Agency, and the directive to establish a joint US Space Command, comparable to US Central Command. And of course there has been a lot of political infighting around all of this – much of it driven by the need for Space acquisition reform. And in commercial regulation, the Office of Space Commerce was created within the Department of Commerce, with a new leader and a broad mandate to create a “one stop shop” for commercial space policy and regulation (excluding launch) – but with very little budget and a skeleton staff. Not to mention a potential conflict between that mandate, and what the FAA’s Office of Commercial Space Transportation has recommended it take on.
Began with a government shutdown that slowed any progress in commercial regulatory reform, and some mixed on national security space – with progress on the new Space Command, and Acting Defense Secretary Shanahan still pushing for the Space Force and acquisition reform, and the DoD 2020 budget including $270M for a new Space Force headquarters, the SDA and the Space Command. That is a tiny amount compared to the Air Force’s current $8 billion space budget, but conflicting signals from Capitol Hill and other stakeholders continue to muddy the waters on where this will all end up.
What to Watch
- Space Command and/or Space Force? Standing up of the new Space Command, plus the new SDA and other reform changes, could sap the political and bureaucratic urgency for a full-on Space Force. Or could be a critical early step. Does Congress feel the same sense of urgency that the administration does and will it support a true Space Force? Or is a Space Command and capable SDA “good enough”?
- Space Development Agency Success? The new SDA is designed to help meet objectives of getting faster, leaner space development and acquisition – after years of complaints about the slow and expensive current process. Can SDA achieve real progress in 2019, and win allies in Congress and elsewhere?
- The “Office” of Space Commerce? Or the “Bureau” of Space Commerce: The Administration wants a full Bureau of Space Commerce within the Department of Commerce. This would, they believe, give it the stature, resources and authority to oversee commercial space activities (excluding launch). But there are ongoing battles over budget, authority and potential bureaucratic overlap. Will the new Space Commerce office make any difference at all? Or does the ambition get caught in legislative and bureaucratic inertia and pushback?