Launch Failure of SpaceX' Falcon 9 Rocket Carrying Supplies for the ISS: Implications for the Industry

Cape Canaveral, Fla., June 29, 2015--An unmanned SpaceX Falcon 9 rocket exploded about two minutes after liftoff from Florida on Sunday, June 28 at 10:21 am EST. The launch failure destroyed a cargo ship carrying about 2,477 kgs. of supplies bound for the International Space Station.

The 208-foot-tall (63-meter) Falcon 9 rocket had flown 18 times previously since its 2010 debut.  All 18 missions were successfully carried out. Those missions included six station cargo runs for NASA under a 15-flight contract worth more than US$ 2 billion. However, SpaceX has twice previously tried and failed in an experiment to land the rocket on a platform in the ocean.

The Falcon 9 exploded two minutes and nineteen seconds after liftoff from Cape Canaveral Air Force Station. It was the second successive botched mission to resupply the space station. A Russian Progress cargo ship failed to reach the outpost in April following a problem with its Soyuz launcher.

The cause of the launch failure is undegoing investigation. The investigation is expected to last between 4-6 months, which will delay some planned SpaceX commercial launches. According to Raymond James analysts in a briefing report today, commercial launches could be even further delayed if, as expected, SpaceX gives priority to NASA ISS missions.  Other key implications of the Falcon loss according to Raymond Jame include:  

  • ISS operations.  Despite the loss of three cargo missions over the past eight months (SpaceX, Orbital ATK, and a Russian Progress mission), the ISS has sufficient supplies to maintain operations until at least October 2015.  Furthermore, a Russian Progress cargo ship is scheduled to deliver cargo next week (July 3), and a Japanese HTV mission is scheduled for August.  
  • Commercial launches.  SpaceX has captured an increasingly larger share of commercial launch orders awarded over the past two years, edging out more established launch vehicles, including the Russian Proton and European Ariane 5.  While the failure could put some pressure on SpaceX’s insurance rates, it is unlikely to cause a competitive shift due to the extremely tight nature of the current launch market.  At present, the Ariane 5 is fully booked through 2016 and the Proton is still awaiting a return-to-flight following a May 2015 launch failure.  
  • Falcon Heavy.  In development for more than four years, SpaceX’s ultra-heavy lift rocket, the Falcon Heavy, is currently scheduled to conduct its initial demonstration flight by the end of 2015.  This launch date is likely to slip, however, as SpaceX shifts resources to carry out the Falcon 9 failure investigation.  Any significant delay in the Falcon Heavy program could have a negative impact on ViaSat (ViaSat-2) and Inmarsat (Inmarsat 5 F3), which are currently scheduled to launch on the Falcon Heavy in mid-2106.  Other customers include SES, Intelsat, and Arabsat.  
  • Commercial Crew program.  SpaceX, along with Boeing, was selected in September 2014 to develop a commercial crew transportation system to ferry astronauts to the ISS.  The program, which has been perennially underfunded by Congress, could face additional funding pressure if congress elects to shift funds to its preferred Orion/SLS program.  
  • Military launches.  Earlier this month, SpaceX won Air Force certification to launch national security satellites using the Falcon 9 after a nearly two-year certification process.  Yesterday’s Falcon 9 failure could prompt the Air Force to delay the initial award of a Falcon 9 mission, but with the Atlas V facing imminent supply constraints (due to a Congressional ban on the Atlas V’s Russian-supplied RD-180 engine), the Air Force’s near-term options are increasingly limited.   

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