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The Launch Landscape: Medium/Heavy Lift Vehicles
A survey of launch vehicles at the border of the Medium/Heavy lift payload classes
This is the first of a series of posts called The Launch Landscape surveying the orbital rockets that are actively flying or soon to be flying.
Why start with rockets?
The launch industry is a fundamental part of the space ecosystem because it can be described as the critical infrastructure upon which the space economy is enabled. Most simply stated launch vehicles are a means of transportation, they get objects off the surface of the Earth and onto the next step of their journey in space.
The launch industry is most typically segmented by payload lift class, meaning the mass of the objects that the rockets can send into orbit. There are four major payload classes, Small Lift (rockets that can send payloads of 2,000kg and below into orbit), Medium Lift (2,000kg to 20,000kg), Heavy Lift (20,000kg to 50,000kg) and Super Heavy Lift (above 50,000kg).
I have chosen to start with a post about rockets that exist at the edge of the Medium/Heavy Lift payload classes (around 18,000kg-24,000kg to LEO) because these are arguably the most high profile rockets actively flying today. In addition, a number of rockets in this category are developed by American private companies and so this payload class is particularly relevant to investors.
The rockets in this Medium/Heavy category are listed below and are all currently flying (there are no Medium/Heavy Lift vehicles in development)
Falcon 9 (SpaceX)
Altas V (United Launch Alliance, a 50/50 partnership between Boeing and Lockheed Martin)
Proton (Russian Government)
Originating Nation: United States
Originating Entity: SpaceX, a private US company
Payload Class: Medium/Heavy - 22,800 kg max to LEO (Low Earth Orbit)
Maturity: Currently Flying
In many ways, SpaceX’s Falcon 9 has recently shaken up the launch industry. This is partly because of its technical achievements and partly because of how it represents an emergence of “NewSpace” commercial entities disrupting an industry previously dominated by legacy players. The Falcon 9 has effectively positioned itself as the industry’s versatile workhorse launch vehicle. It was built not to push the limits of rocket technology or solely serve a government’s mission priorities but instead was maybe the first rocket program developed largely with private investment for the purpose of launching reliably and affordably. When SpaceX introduced the Falcon 9, it was the lowest priced launch vehicle in its payload category and created significant downward pricing pressure which has had widespread impacts through the industry. Currently the price of a Falcon 9 is around $62M. In 2015, SpaceX became the first entity to land a rocket, a massive technical feat considered nearly impossible up until the moment SpaceX accomplished it. However this leap was made not to demonstrate their technical ingenuity but instead to increase profits by reducing costs and increasing flight cadence through reusing the rocket’s first stage.
After their first landing, SpaceX released a compilation of all of their unsuccessful attempts, a demonstration of the company embracing its failures in a way that is rare for space companies. The video is a fun watch and highly recommended:
Originating Nation: United States
Originating Entity: United Launch Alliance (ULA), a US company that is a 50/50 partnership between Boeing and Lockheed Martin
Payload Class: Medium/Heavy- 20,520 kg max to LEO
Maturity: Currently Flying
Atlas V is the oldest actively flying rocket on US soil, with its first flight in 2002. It has been regularly and reliably flying since and has launched 85 times. Unlike the Falcon 9, the Atlas V was designed a bit more with performance in mind and as a result is a more expensive launch vehicle. Whereas the Falcon 9 specializes in frequent low cost launches to Low Earth Orbit, the Atlas V leverages its higher performance (as measured in Specific Impulse, the rocket equivalent of miles per gallon) to reach further destinations such as Geosynchronous Orbits. These orbits are typically more used by government satellites (such as GPS, spy imaging, or classified communications) and so the Atlas V has traditionally been the go-to rocket for less price sensitive US government national security satellite launches that must be launched from US soil. However, an Atlas V launch costs about $110M per launch and so the Falcon 9 has been steadily eating into the Atlas V’s business as the Falcon 9 has proven its reliability and the US government has found the cost savings to American taxpayers to be increasingly attractive. A further complication for the Atlas V is that its first stage engine, the RD-180, is purchased by ULA from Russia and in 2014 Congress mandated that the US end its dependence on Russian engines. Thus the Atlas V is being phased out of active use in the coming years. ULA plans to replace it with its more powerful next generation launch vehicle, Vulcan.
Originating Nation: Russia
Originating Entity: Designed by Khrunischev State Research and Production Space Center, an entity of the Russian Government
Payload Class: Medium/Heavy- 23,700 kg max to LEO
Maturity: Currently Flying
The proton is one of the most successful and prolific rockets in the history of spaceflight. It was first flown in 1965 and since has launched an astounding 425 times, most recently in its form the Proton-M which first flew in 2012. Proton began as an Intercontinental Ballistic Missile and later transitioned to flying payloads to orbit for the Russian government. Proton’s first launch carrying payloads for commercial entities was in 1996. The Proton-M costs $65M per launch, making it one of the most affordable rockets in its payload category and it has been a significant source of revenue for the Russian government, with claims that between 1994 and 2019 Proton earned $4.3B for the Russian space industry. Due to that cost, the Proton-M rocket is a popular launch vehicle for both commercial and Russian government satellites. Proton is currently being phased out for replacement by the Russian Angara launch vehicle.
What Drives Launch Competitiveness?
In summary, the key takeaway from these Medium/Heavy Launch vehicles is that no single factor controls competition in the launch industry. For example, while one of the most significant drivers of vehicle success is price, the Atlas V still flew five times in 2020 despite costing over $100M per launch and being nearly twice the cost of a Falcon 9. In addition, the Proton rocket continues to fly regularly both for the Russian government as well as European and Russian commercial entities. Why hasn’t this become a winner take all sector? Beyond price, some of the major factors that drive competitiveness include reliability, performance, national security, geography, and (critically) politics.
Throughout the history of rocketry, reliability has proven to be a major priority. Given the high cost of failure if a satellite is destroyed during launch as well as the high cost of insuring satellites that launch on unreliable rockets, a reliable track record is a strong competitive advantage. In fact reliability was the primary argument that ULA made for discouraging the US government from using the Falcon 9 rocket during SpaceX’s infancy. At this point however, the Falcon 9 has flown so frequently that it is arguably the most reliable rocket available today in addition to being the most cost effective.
Performance has also become a competitive differentiator. As stated earlier, the Atlas V utilizes engines that provide higher in-space performance which optimizes them for further orbits. While these further orbits (such as Geosynchronous Orbit) are just a sub-segment of the broader launch market, ULA has found this segment to be highly attractive and one they hope to protect.
In addition, national security continues to be one of the primary reasons that some launch vehicles exist. As long as a nation is flying military and national security satellites, they will desire that those satellites stay within their own nation’s borders until the time of launch. For that reason, rockets like Proton will always have the Russian government as a reliable customer and rockets from other nations will never be able to compete for those launches. It is also worth noting that national security government launches tend to be much more lucrative than commercial launches. For example, while ULA may make $110M on a commercial Atlas V launch, it takes in closer to $180M on launches for government customers due to the increased services and specifications needed to satisfy national security customers. It is this reason why ULA is so focused on competing for national security launches while SpaceX dominates commercial launches in the US.
Beyond national security, we can also see that geography has proven to be a competitive advantage as well. While SpaceX has in many ways become the preferred launch vehicle for US commercial satellites, the Proton rocket (which is slightly more expensive) continues to fly payloads for Russian and European commercial entities that also have freedom to choose their launch provider. It seems that satellite operators have a preference for using rockets that are built and launched from close to home.
Finally, perhaps one of the primary factors that has not been discussed yet is the highly political nature of the space industry. The US legacy defense companies have extremely effective lobbying arms and have also strategically positioned their manufacturing facilities to be located in the districts of highly influential politicians. While its nearly impossible to quantify the true impact of this under-the-radar dealmaking, these lobbying efforts are widely understood to be a major factor in the decision making for major launch contracts offered by government entities.
Ultimately the various factors contributing to competitiveness in the industry have prevented any single launch provider from owning the entirety of the market which makes it an exciting and continually evolving part of the space industry. That being said there is significant disruption taking place that makes this an interesting sector for investors to pay close attention to.