- Amazon has made the largest commercial rocket launch purchase ever for its mega satellite constellation.
- Analysts say the deal is overall good for the launch industry, but some sectors will suffer.
- Analysts told Insider who the unnamed winners of the deal are and who loses out.
Amazon made history earlier this month by announcing the biggest commercial rocket launch purchase ever to send just over 3,200 satellites into orbit for its Project Kuiper megaconstellation, buying most of the capacity market launch in the world for the next five years. Although he did not disclose the financial terms of the deal, analysts predict he is worth up to $10 billion. Amazon plans to use its Kuiper satellites to compete with SpaceX’s Starlink by bringing
broadband
Internet service to the billions of people who do not have Internet access today.
Some analysts were shocked by the enormity of the deal, in which Amazon bought 18 rocket launches from Arianespace, 38 from United Launch Alliance and 12 from Blue Origin, with an option for 15 more from the owner’s space company. Amazon, Jeff Bezos. Laura Forczyk, owner of space consultancy Astralytical, told Insider she doesn’t think Amazon would announce such a large bulk purchase, but it makes strategic sense given the amount of capital the company has. business.
“It makes sense for them to hedge their bets and say, ‘We’re going to book some of these initial flights on these new rockets…because they have the money for it,'” Forczyk said.
Amazon is also a bit pressed for time to get its satellites into orbit, as it has a license agreement from the Federal Communications Commission that says it must have half of its satellites in orbit by July 2026 and the rest by July 2029.
Space industry analysts told Insider that Amazon’s massive deal is a net positive for the launch industry overall.
“They’re spending over $10 billion on the Kuiper project, a lot of which will go to launch. That’s money flowing into the industry that otherwise wouldn’t have gone there,” said Andrew Penn, director main space. and the satellite communications practice at boutique management consulting firm Avascent, Insider told.
But analysts also agree that parts of the launch industry could suffer from the deal, including smaller launcher companies.
Who Loses Amazon Deal
Some analysts believe Amazon’s massive launch purchase is bad news for smaller launcher companies, which were conspicuously absent from the deal, such as RocketLab, Firefly Aerospace and Astra. Amazon has announced that its Kuiper satellites will weigh around 1,300 pounds, much larger than most people expected, Deutsche Bank analyst Edison Yu told Insider, so many small businesses in launchers simply wouldn’t have enough rockets to launch Kuiper satellites.
The problem is that some of these smaller launch companies have gone public through Special Purpose Acquisition Companies (SPACs), they’ve sold investors on the idea that they would be key to launching megaconstellations like Kuiper or its two main competitors OneWeb and SpaceX’s Starlink in space. , Ars Technica reported.
If smaller launcher companies don’t land those contracts, it puts a damper on their business plan, Forczyk said.
“We consider small launch vehicle business plans based on broadband megaconstellations to be exceptionally unstable and unlikely to materialize,” said an analyst note from space and satellite industry consultancy Quilty. Analytics.
Some analysts have said smaller rocket companies could be contracted by Amazon for satellite maintenance and replacement missions down the line. But Forczyk said even that is unlikely, as Amazon is unlikely to replace a single satellite at a time. With such a large constellation, if 10 satellites go down, it’s not that bad. Launches are expensive, so Amazon wouldn’t want to spend the money to launch just one satellite when it could launch 10 or more at once.
Forczyk said the deal with Amazon could help smaller launcher companies readjust their business plans based on market demands and speed up plans to build larger rockets. Firefly Aerospace, Relativity Space and RocketLab all plan to introduce large rockets in 2024, according to the note from Quilty Analytics.
Yu told Insider he’s not worried Amazon’s deal will lead to launch delays for the company’s satellite constellation’s main competitors, SpaceX and OneWeb. But anyone else will probably be hard-pressed to find a launch capability that isn’t already absorbed by Project Kuiper.
Who are the anonymous winners of Amazon’s deal
A number of companies that were not explicitly named in Amazon’s announcement will reap the benefits of the deal, namely companies working with the new Project Kuiper partners to supply the parts needed to build of their rockets. Since United Launch Alliance is not vertically integrated, its entire supply chain will benefit from the deal.
One of the companies in the United Launch Alliance’s supply chain is Aerojet Rocketdyne, which makes the upper-stage engines for its Vulcan rockets, according to Penn. Aerojet even plans to expand one of its factories to increase engine production, according to Space News.
Northrop Grumman also makes solid-fueled strap boosters for United Launch Alliance rockets and plans to ramp up production to meet new demand, Space News reported.
Blue Origin also wins the deal twice, Penn noted, because they manufacture the BE-4 engines used by United Launch Alliance. Not only will they be paid for their launches, but they will be paid for their engines.
Another case winner is Beyond Gravity, which has been contracted by Amazon to deploy the satellites once they are in space. The company, which makes custom and scalable delivery systems for satellites, just changed its name last month and was previously known as RUAG Space. It said in a press release that it was building a new facility in Sweden to double its capacity for distributors.
Companies that monitor the locations of objects orbiting Earth to make sure there are no collisions also see an opportunity with this deal. With more objects orbiting space, they have more work to do. Yu told Insider that a number of startups essentially work as traffic controllers for objects in space.
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