Assessing the Impact of U.S. Air Force National Security Space Launch Acquisition Decisions

An Independent Analysis of the Global Heavy Lift Launch Market

by Bonnie L. Triezenberg, Colby Peyton Steiner, Grant Johnson, Jonathan Cham, Eder Sousa, Moon Kim, Mary Kate Adgie

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Research Questions

  1. How many U.S. launch service providers can the global heavy lift launch market support?
  2. What are the effects of near-term acquisition decisions on the USAF's ability to (1) meet NSS launch demand using U.S. launch service providers and (2) sustain two or more U.S. launch service providers over the next ten years?

In 2019, the U.S. Air Force (USAF) asked the RAND Corporation to independently analyze the heavy lift space launch market to assess how potential USAF decisions in the near term could affect domestic launch providers and the market in general. This report's authors examined historical and projected levels of demand and supply in the global commercial and National Security Space (NSS) launch markets to help the USAF gain clearer insight into the number of U.S. launch service providers that the global heavy lift launch market can support and the impact of near-term acquisition decisions on the USAF's ability to (1) meet NSS launch demand using U.S. launch service providers and (2) sustain two or more U.S. launch service providers over the next decade.

Using literature reviews, historical launch data, and interviews with subject-matter experts and industry stakeholders, the authors developed launch market forecasts and constructed vignettes to illuminate potential market strategies for U.S. firms.

As a result, the USAF should continue to provide tailored support for three U.S. launch service providers in the heavy lift launch market. Longer term, it should prepare for a future with only two U.S. providers of NSS-certified heavy lift launch services.

Key Findings

The global addressable market (the share for which commercial firms compete) will likely grow only moderately over the next decade

  • The annual number of launches worldwide grew to 71 in 2018 from 47 in 1998, but the commercial portion over which launch firms compete—addressable share—stayed steady at around 20 launches; today, the addressable share represents only 35 percent of the total market.
  • SpaceX's Falcon 9 handles more than half of addressable launches today, with communications companies being the dominant customers.
  • This market is likely to see only moderate growth over the next ten years, and the U.S. share of this market is likely to fall. The net result is that the addressable share of the launch market is unlikely to support more than one U.S. supplier of launch services focused on commercial heavy lift.

The National Security Space market is likely to face a near term supply shortage

  • In many conceivable futures, the USAF's current acquisition plan is unlikely to provide sufficient supply of NSS launch vehicles certified to carry U.S. NSS payloads.
  • The USAF can lower the risk of insufficient supply of NSS launch vehicles by gaining nonpriority access to legacy launch systems and/or by supporting three launch services providers through the 2022–2025 time frame.

Recommendations

  • For USAF near-term strategy, continue to provide tailored support through 2023 to enable three U.S. launch service providers to enter and/or continue in the heavy lift launch market.
  • Such a strategy may increase the probability of global supplier consolidation but decrease the probability of additional foreign competition.
  • Provide time for U.S. firms to best position themselves in the launch markets.
  • Allow market forces to determine which firms are strongest, and thus survive, and which exit.
  • For USAF longer-term strategy, make prudent preparations for a future with only two U.S. providers of NSS certified heavy lift launch, at least one of which may have little support from the commercial marketplace.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Understanding U.S. National Security Space Launch

  • Chapter Three

    Understanding the Addressable Commercial Launch Market

  • Chapter Four

    Strategic Choices Faced by U.S. Heavy Lift Launch Providers

  • Chapter Five

    Assessing the Impact of USAF NSS Launch Acquisition Decisions on the NSS Market

  • Chapter Six

    Assessing the Impact of USAF NSS Launch Acquisition Decisions on the Global Heavy Lift Launch Market

  • Chapter Seven

    Observations and Recommendations

  • Appendix A

    Data Sources

  • Appendix B

    Methodology

  • Appendix C

    Learning from History

Research conducted by

This research was sponsored by the U.S. Air Force and conducted by the Force Modernization and Employment Program within RAND Project AIR FORCE.

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