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SpaceX Celebrates 10 Years in Business-- Next Three Are Critical

Satellite Technology

Satellite Technology Feature Article

March 16, 2012

SpaceX Celebrates 10 Years in Business-- Next Three Are Critical

By Doug Mohney, Contributing Editor

This week, SpaceX (News - Alert) announced its tenth birthday, thanking "NASA, our customers, supporters, and those who believe in what we are working so hard to accomplish."   It has accomplished a lot and even landed coverage on "60 Minutes" on March 18. However, it will be the next three years that will matter the most for the company's longer-term future.

A quick inventory of accomplishments is impressive. SpaceX has built up a workforce of over 1,500 people and has major facilities in California, Texas, and Florida. It builds rockets in Los Angeles, tests engines in Texas, and currently launches Falcon 9 rockets from Cape Canaveral, Florida. In addition, it is preparing a pad and facilities at Vandenberg Air Force Base in California to support launch activities for the initial flights of its Falcon Heavy.

Spending a little under a billion dollars, SpaceX has developed, built, and tested a lightweight launcher (Falcon 1), a medium-weight launcher (Falcon 9), and a reusable space capsule able to return to earth (Dragon).   It has successfully launched a couple of satellites on its Falcon 1, plus put a Dragon space capsule into orbit and successfully returned it to earth. 

On April 30, it plans to launch its first full-up demonstration of putting a Dragon into orbit, rendezvousing with the International Space Station (ISS), and berthing with the $100 billion lab. Should all go well, the company can start fulfilling its multi-year $1.6 billion Commercial Resupply Services  (CRS) contract to transport cargo and bring back things from ISS.

More importantly, SpaceX has won the public support of the four major satellite service providers, as well as numerous others. At Satellite 2012, the CEOs of Eutelsat (News - Alert), Intelsat, Iridium, ORBCOMM, SES, Telesat all came out at the morning keynote panels for FSS and MSS services to praise the company. In addition, the company has an impressive and steadily growing commercial launch manifest for 2013-2017. 

So what's not to like? Intelsat (News - Alert) CEO David McGlade says  the three keys to evaluating a launch provider are cost, reliability, and the ability to deliver a launch on the promised date. SpaceX certainly has the cost box checked, but assessing reliability only comes with more completed flights.

It's the criteria to meet a schedule that SpaceX has its biggest current vulnerability. Last year, SpaceX CEO Gwen Shotwell said the company would conduct a total of five launches, including the COTS 2/3 demo -- now scheduled for an attempt on April 30, 2012 -- plus a CRS resupply flight. Flying zero flights in 2011 didn't stop Shotwell this year from saying SpaceX would fly four times, including the COTS 2/3 flight, two CRS resupply flights, and a mission from Vandenberg for MDA that will demonstrate the new Merlin 1-D rocket motor before SES (News - Alert) will fly a satellite with the company. 

Fulfilling a good portion of its launch manifest in 2012 through 2015 will go a long way to establishing credentials in the areas of reliability and meeting launch dates, with the 2013-2015 time period being especially critical as providers have satellites finished and ready for launch.

The other area for improvement would be documenting some of the more bold claims the company has made, in order to place them in a more clear context. SpaceX has boasted how has been profitable several years in a row, including last year when they didn't have any launches -- an interesting statement since during 2011, the company had over 1,500 people on payroll, got the lease for a new launch vehicle facility at Cape Canaveral, started work on their facility at Vandenberg Air Force Base for Falcon and Falcon Heavy flights, R&D costs for Falcon Heavy and the "Grasshopper" reusable launcher testbed, a factory floor in Los Angeles, a rocket testing facility in Texas, and construction of long-lead items for future CRS flights, such as Dragon space capsules. That's a lot of overhead and work!

When asked about 2011 profitability at Satellite 2012, Shotwell said would take several slides to explain and appeared to attribute the primary source of income to completing major milestones under the NASA COTS development program.  In a discussion over at HobbySpace, Publisher/Editor Clark S. Lindsey pointed out SpaceX also has money coming in from R&D work for StratoLaunch and deposits for future launches

Clark makes a great case for SpaceX, but my point here is why should Clark be the one providing the support? SpaceX doesn't have to provide audited accounting statements, but it also shouldn't be so cavalier in claiming profitability and expecting people not to be more curious about how it gets to such a claim.

Edited by Chris Freeburn

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