Publisher’s Note

The space sector is currently facing significant changes with the accelerating growth of space activities in several countries (China, India, Japan) and emerging economies, and a growing number of players competing on the open market for launch services, investing in space systems and their downstream applications.

In fact, under the pressure of these new entrants, space is becoming more and more a business to be managed like any other, where the notions of strategic thinking, appropriate response to users-clients’ needs / market demand, optimized R&D programme & technology portfolios, operational performance excellence… are key to be successful in an increasingly competitive environment.

Strategic thinking includes finding and developing a strategic foresight capacity, by exploring all possible organizational futures, and challenging conventional thinking to foster accurate decision making. Critical issue is not the conventional "What?", but "Why?" or "How?". This implies iterative approaches, considering in turn objectives, implementation and resources, a capacity for "intelligent trial-and error" rather than strict adherence to finely honed strategic plans.

Regarding Science & Space Exploration, ESA Director General Jan Woerner proposes to launch two large-scale projects (frequent Earth-orbit activities to pursue microactivity research; the Moon Village, a common international exploration initiative) that open new perspectives, as the International Space Station will not last forever (2024). For Jan Woerner, to continue on the path of space exploration is essential, not just for science and for technology, but also for inspiration and international cooperation. And going to the Moon – in a way that differs totally from the past – meets all these criteria. The Moon Village that will enable to combine the capabilities of the spacefaring nations should be considered as an envelope where different robotic and manned activities could fit in: setting up radio telescopes, built with innovative techniques like 3Dprinting… on the far side of the moon, to look much deeper into the Universe because this lunar side is shaded from Earth’s radio pollution; exploring the pole regions where unmanned missions found water ice; developing business ventures, tourism activities… This Moon village initiative has already got positive feedbacks from industry, Roscosmos and the NASA, which is considering "cislunar" activities.

The Moon, perfect stepping-stone to Mars and beyond, is also targeted by Google via its $30M Google Lunar XPRIZE, a worldwide race competition to challenge engineers and entrepreneurs to develop low-cost methods of robotic space exploration. To win, a privately funded team will have to successfully place a robot on the moon’s surface that explores at least 500 meters and transmits back high-definition video and images by December 31, 2017. To date, two of the sixteen preselected teams have already signed verified launch contracts for 2017 (SpaceIL (Israel) / SpaceX Falcon 9; Moon Express (USA) / Rocket Lab USA "Electron" rocket). The technologies developed by the competing teams will certainly contribute to reduce costs and barriers to entry so that private industry can work alongside government agencies and advance lunar exploration.

Founded in 2002 by Elon Musk with the goal of creating the technologies to reduce space transportation costs and enable the colonization of Mars, SpaceX has moved from a spunky start-up with this seemingly outlandish goal of colonizing the Red Planet to disruptive competitor that has remade the rocket launch business. It became the first commercial space company to fly supplies to the International Space Station. In 2014, it won a separate contract to fly astronauts there by 2017. And the Pentagon recently qualified the company to compete for lucrative missions to launch national security satellites into orbit.

The "cost leadership" strategy adopted by SpaceX has been successfully implemented by applying design-to-cost management techniques, vertical integration (principally because of suppliers’ prices evaluated as too high; around 85% of the entire Falcon/Dragon vehicles are produced in-house, including even the flight computer), and the modular approach from software engineering (Falcon 9 uses 9 of the Merlin engines, which were tested on the single engine Falcon 1, Falcon Heavy uses three Falcon 9 booster stages). SpaceX's capabilities and low launch prices, especially for GTO communication satellites, meet market demand and have resulted in market pressure on competitors to lower their own prices. The whole European launcher industry is currently being restructured, consolidated, rationalized and streamlined. For Ariane 6, Airbus Safran Launchers has set up totally new engineering/manufacturing processes and industrial organisation: regrouping on one site (Les Mureaux, France) of the engineering teams of ASL, its first Tier suppliers (SABCA, RUAG, MT Aerospace, Air Liquide…), and ESA; creation of industrial excellence clusters (metallic parts – MT Aerospace, Germany; composite parts – Casa, Spain…) to optimize industrial capacities’ utilization rates; use of 3Dprinting for some technical complex parts like the hydrogen turbopomp connectors; new "horizontal" assembly lines (like the Russian ones)… But pressure from competition … and clients will remain high over the next few years in this launch service sector that has not reach yet its optimum consolidation/equilibrium level.

Regarding the reusable launch system technology currently under development for the first stages of the Falcon family, and following the first successful landing and recovery of a Falcon 9 first stage in December 2015, SpaceX President Gwynne Shotwell estimates that, at $1M cost of refueling and $3M cost of refurbishing, a used first stage could potentially allow a launch to be priced as low as $40M, a 30% saving. Some critical technological issues need of course to be addressed and solved, and success is far from guaranteed. However, SpaceX biggest customer SES has mentioned it wants to be the first to ride a reused vehicle, at a launch price of $30M or 50% saving to offset the risk of pioneering the process. For Karim Michel Sabbagh, SES CEO, to partner with 3 launch system providers (ASL, SpaceX, and ILS Proton or Mitsubishi?) and 5-6 satellite manufacturers would optimize SES business model. SES is targeting a "$30M launchers and 20% cheaper satellites" upstream ecosystem that would enable to deploy satellite networks worldwide and to really democratize the satellite usage.

Yours sincerely,

François Louisin
Editing Director