Forecast International sees positive growth trends for the tight ELV market

The expendable launch vehicle industry remains mired in a depressed market, but a recent market analysis from Forecast International/DMS cites positive indicators of a near-term resurgence. The firm's analysis of the 2003-2012 world-wide ELV market indicates that approximately 700 rockets from manufacturers world-wide will be produced to launch the 720 scientific, military and commercial communications satellites which Forecast International expects to be produced between 2003 and 2012.The value of that ELV production is expected to exceed $61 billion within the ten-year outlook period.

Only about 65 of the 74 launches planned for 2002 actually took place, as the late market entry of the US Air Force's EELVs and the grounding of the Ariane 5, Proton and Sea Launch rockets pushed most of the remaining missions into 2003. According to Shelby Gruner, Space Systems Analyst at Forecast International, the 2002 launch statistics still represent a marked increase over the paltry 53 launches that took place in 2001, and are not too far behind the 80 annual liftoffs completed in the market heydays of the late 1990s. "Based on the backlog from 2002 and current satellite deployment plans, approximately 70 ELVs will be launched world-wide in 2003, marking a second consecutive year in slow but notable growth since the collapse of the little LEO market," Gruner said.

Forecast International anticipates production of about 370 boosters to meet 2003-2007 launch requirements, followed by an estimated 330 units between 2008 and 2012. Despite the higher output in the first half, today's poor market conditions will leave the value of production almost equal to that in the second half at about $31 billion.

While Europe's Ariane rockets were the busiest in 2002, the restructuring in the Ariane 5 programme and the international consolidation of satellite production in Europe, combined with rising US military satellite requirements, will likely drive the Boeing Delta IV EELV to take the lead in 2003 and 2004. "US ELV revenues, which declined in 2002, are about to ramp up with the advent of the US military's new Transformational Communications Satellite constellation," said Gruner. For these applications and others, the newly initiated US Air Force Evolved Expendable Launch Vehicles (EELVs) - the Boeing Delta IV and the Lockheed Martin Atlas V - will get quite a workout throughout the decade, with about four civilianand one to two military missions per year, respectively. Russia's Soyuz, too, will be among the most launched in the near term, as its Space Station missions increase to compensate for the grounding of the shuttle fleet.

Part of the reason for the sizable decrease in estimated ELV production over last year's analysis is that the European satellite sector is facing further consolidation, among Astrium, Alcatel Space and possibly Alenia Spazio. In addition, almost all of the European governments have scaled back their planned communications, surveillance, and scientific satellite production plans in favor of international dual-use (military and civil) satellite efforts involving roughly half the satellites originally required. ESA will be the European market's bread and butter, with an estimated requirement to build and launch about four scientific satellites per year. Commercial firms like SES Astra, Intelsat, and Eutelsat will supply much of the remaining demand as the DTH and satellite broadcast/communications sectors continue to grow.

The ELV market environment is still fiercely competitive. The hype over the recent influx of medium-lift rockets - the US EELVs, Japan's H-2A, Russia's Proton-M/Breeze-M, and China's Long March-4 - has quickly given way to a move to develop even heavier lift boosters, capable of placing 9 to 14 kilograms of multiple payloads into separate Geosynchronous transfer orbits. New lightweight launchers are also emerging to accommodate anticipated demand from the opposite end of the spectrum. Russia, China, Japan, Israel, India, Brazil and ESA are all introducing smaller rockets, but only of few of these - the Vega, the Angara and perhaps the orbital response vehicle (RASCAL) - are considered commercially viable against existing systems.

The ELV market is definitely improving, and the anticipated resurgence in demand for geosynchronous satellite communications capacity starting around 2008 bodes well for a considerable market upturn. Also, many of the satellites currently in GEO will need replacing later in the decade. New commercial satellite orders are still scarce, but with growth recorded in every satellite sector in 2002, things are looking up.

Forecast International/DMS Inc., is a provider of Market Intelligence and Analyses in the areas of aerospace, defense, power systems and military electronics.

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