High Ambitions/Low Bar: Initial Rocket Launch Goals

Around mid-November 2023, Peter Beck, Rocket Lab’s CEO, spelled out a launch contract truth in answer to a question during an investor call (according to TechCrunch):

“Until a vehicle is proven and flying, any launch contract that you can sign is basically worthless,” Beck said during a third quarter earnings call. “We can go and sign a launch contract tomorrow with a number of customers, but it will be like, some thousand dollars down and cancellable anytime. But that really doesn’t mean anything.”

Beck refers to a practice common in the space industry: signing contracts between launch companies and their customers—but the companies have no rocket ready to launch. Even though Beck’s description focuses on his experience leading Rocket Lab, other rocket manufacturers and services are currently in a similar scenario with Amazon Kuiper contracts.

What are the chances that a new rocket will launch on time? And if it doesn’t, how long is the delay between the initial launch goal and the actual rocket launch? What are the potential consequences of ghost rocket contracts, whether a company hits its initial launch goal, or not?  

A Sampling of Legacy Rocket Delays

The history of delays is so long and prevalent that one must wonder what on Earth drives companies and governments into the arms of inexperienced startups and low-performing launch companies. What possesses them to sign a contract with a company, even though it has not once launched a rocket into orbit or suborbit? Especially if the agreement is entered years after the same company has already blown well past its first anticipated launch date. Is it a case of insanity, where people repeat the cycle over and over, expecting a different result?

Ariane 5 is one example of not hitting its initial estimated launch goal. But it’s far from the worst. 

The rocket’s development (along with the Hermes spaceplane) started in 1988 after it was approved at the 1987 Ministerial conference. The first two Ariane 5 qualification flights were scheduled for some time in 1995. Ariane 5 eventually launched a year later, in 1996. That would be one of the shortest durations between an initial launch goal estimate and an actual launch. 

Boeing and Lockheed Martin were on the hook for developing rockets for the Department of Defense’s (new) Evolved Expendable Launch Vehicle program (EELV). The program’s Buy 1 contracts established:

“…demonstration flights in the year 2000, with production versions of the medium EELVs to begin flying in 2002. The next year, each contractor’s heavylift vehicle would fly a demonstration flight, with production models prepared to launch from Vandenberg in 2005 and the Cape in 2006.”

Based on the contracts, Boeing had to develop and launch its brand-new Delta IV rocket sometime in 2000. Its Delta IV Heavy would need to launch in 2003. Lockheed was to launch its Atlas V rocket (also new) sometime in 2000 as well. Neither company made the initial estimated launch goal dates for any of their launch vehicles.

Boeing first launched its Delta IV in November 2002. Lockheed launched its Atlas V a few months earlier, in August 2002. Both launched about two years after their initial estimated launch year. The Delta IV Heavy, on the other hand, launched in December 2004, merely a year behind its initial goal.

Those examples are of “old space” companies and processes from which one might expect delays. The latest “new space” rocket startups must be exemplars of cutting processes and breaking legacy nonsense to develop their rockets faster than legacy companies, right?

New Space for the Win? Maybe a Participation Award.

Except, no… not really.

Vector Space Systems is probably one of the more extreme examples of not making the schedule, as the company folded before launching a single orbital rocket. Vector was supposed to develop and launch smallsat-focused rockets. Its CEO announced in April 2016 that the Vector-R would start launching commercially sometime in 2018. 

It’s in this period where we also see some examples of customers signing up for launches, despite Vector not having any rocket to launch with. The company’s CEO noted also in 2016 that Vector had signed launch contracts valued at about $160 million. Two years later, in 2018, he mentioned that Vector had sold launches for 2019 and 2020. At the time, the company still hadn’t launched a rocket to orbit. 

A year later, in Dec 2019, Vector filed for Chapter 11 bankruptcy. Since then, it’s returned as Vector Launch (still with no orbital rocket in 2023), but for this article, the company’s story ends here. The company’s promised smallsat rocket never appeared.

Another company of the New Space era, Virgin Orbit, managed to develop and operate an orbital rocket. 

In 2012, the company anticipated first launching its smallsat rocket, LauncherOne, in 2016. In the same announcement, the company noted it had signed up several customers for LauncherOne. However, those customers could not have known they would need to tack on four more years to that initial launch estimate: LauncherOne’s first launch attempt was conducted in May 2020. It failed, and customers waited eight more months until the next launch (which was successful). 

Virgin Orbit folded a few years later, in early 2023.

There are New Space companies who have managed to survive and launch rockets into orbit. Perhaps they developed their rockets on schedule?

SpaceX, for example, had initially scheduled the first launch of its Falcon 9 for the second quarter of 2007. The Falcon 9’s first launch was conducted three years later, in June 2010. Despite delaying its first launch goal, the company’s Falcon 9 currently dominates the global launch market.

There’s also the company whose CEO quote inspired this analysis: Rocket Lab. In late 2014, Peter Beck said the company was aiming to test-launch its Electron rocket for the first time near the end of 2015. He predicted the company would routinely launch Electron for commercial missions in 2016. However, the first Electron launch didn’t happen until May 2017 (which was a launch failure). 

The next Electron launch occurred about seven months later, in January 2018. It was successful, and despite the three-year delay and disheartening start, Rocket Lab is the dominant dedicated-smallsat launch provider in the world.

The four New Space examples above exceeded their initial launch date estimates, with two failing outright. They (except Rocket Lab) also took longer to develop and deploy their rockets than the legacy space company examples. 

Exceeding Industry Standards? Or Establishing New Expectations.

Surely, current rocket development efforts demonstrate that these companies are learning from their own and their competitors’ experiences. 

Or maybe not. 

Blue Origin has hyped up its New Glenn reusable rocket for years. Its leader and investor, Jeff Bezos, forecasted in 2016 that New Glenn would launch by 2020. New Glenn hasn’t been test-launched. If the rocket launches next year, Blue Origin will have matched Virgin Orbit's four-year delay and doubled Boeing’s and Lockheed Martin’s two-year deviations from their launch estimates. If New Glenn’s first launch is after 2024, it will be one of the most excessive extensions of an initial estimated launch goal.  

SpaceX with Starship has also been hyped into mainstream awareness, especially with the dubious former acronym BFR. The company also exceeded initial forecasts for the first integrated BFR tests in 2019. In September 2019, Musk forecasted: 

“This is going to sound totally nuts, but I think we want to try to reach orbit in less than six months,” Musk said. “Provided the rate of design improvement and manufacturing improvement continues to be exponential, I think that is accurate to within a few months.” 

SpaceX’s management has mentioned new projected orbital Starship launch dates since then, including landing on the Moon in 2022. However, as of early December 2023, it still hasn’t successfully launched Starship into orbit. If it succeeds in 2024, it will have exceeded its initial Starship launch projection by five years.

ArianeGroup is less behind its initial projection for Ariane 6 than SpaceX is with Starship. Ariane 6’s inaugural launch was to be in 2020. However, the rocket has yet to be launched, with the most recent estimate aiming for the middle of 2024.

The upshot is these companies did not hit their initial launch date projections. Worse, the newer companies (except Rocket Lab) and their latest rocket development efforts have exceeded the older companies’ durations between the initial goal and the actual launch.

But hype still pushes the notion of value in these contracts, as represented in this headline: Amazon signs record-breaking launch deals for Project Kuiper internet megaconstellation. Those deals, especially, fit Peter Beck’s criteria for not meaning anything. Especially since almost everything involved is unproven.

It’s not apparent Amazon can quickly manufacture satellites on a massive scale. Nor do the rocket companies involved have operational rockets to commit to the required 80+ launches. All have exceeded their initial launch goals by at least four years. One company, Blue Origin, has never manufactured or launched an orbital rocket before, much less a reusable one. 

On December 1, Amazon announced it purchased three rides on the rocket currently operational - SpaceX’s Falcon 9.

Incentives and Consequences

As indicated earlier, Amazon isn’t the only company to contract for ghost rockets, implying good reasons to do so. If the customers don’t need their satellites deployed right away and have access to ample funds, then they have nothing to lose. Such a scenario does not describe a startup space operator’s situation.

However, governments and Amazon can afford to wait for rocket development. If a rocket is late, the launch customer can expect a few favorable concessions in compensation. If the rocket never gets manufactured, the customer can theoretically go to a different company. Neither scenario negatively impacts that type of customer.

Such contracts can be good for launch companies, demonstrating a high level of customer confidence (or naivety). SpaceX, for example, expertly balances exaggerated launch/performance promises while inspiring increased investment. But SpaceX has also been outperforming its competitors.

However, rocket manufacturers offering ghost rockets face challenges, which Beck highlighted from his experiences: 

“Rocket Lab had to offer “really low introductory pricing” with its Electron vehicle when it was unproven, prior to its first commercial flight in 2018.”

“We carried some of that introductory pricing on for years […] For years, we had some really bad missions,” Beck added. “I just don’t want to go down that road again. […] I would much rather arrive to the market with something that works, that commands a premium, then fill my manifest up with a whole bunch of low-value launches now.”

The launch company relied on a self-destructive strategy to gain customers: lower launch costs. Offering introductory low launch pricing ($4.9 million) didn’t help Rocket Lab, taking money off the table the startup could have used. Also, low pricing, like low rent, invited customers of dubious quality (the bad missions). Rocket Lab eventually raised its Electron launch prices to $7.5 million.

One company has already chosen that road. Blue Origin contracted with NASA using introductory pricing for its first New Glenn launch ($20 million). Since governments typically pay more for products and services, did Blue Origin and the other two launch services provide better terms to Amazon? How do those (potentially) low-value launches impact their businesses?

It appears that Rocket Lab would have gladly dispensed with those low-value launches. But the company was contractually committed, putting it in a bind. Rocket Lab survived those mistakes. Result: Beck adjusted how his company will offer Neutron when it becomes operational. 

Beck understands that binding customers to contracts without an operational rocket is meaningless and destructive. Customer relationships become tense when promises are broken. The initial low-value multiple-launch contracts and limited startup rocket inventory prevent the company from pursuing more lucrative contracts.  

There’s little downside to entering into ghost rocket agreements for Amazon Kuiper since it appears to be “well-monied.” Amazon could alternatively launch with SpaceX. However, the consequences for Arianespace, Blue Origin, and ULA are challenging, as Beck elaborated. The negatives of offering ghost rockets, not reaching initial launch goals, and clearing manifests of low-value launches put them at risk instead of setting them up for success. 

John Holst is the Editor/Analyst of Ill-Defined Space, dedicated to analysis of activities, policies, and businesses in the space sector.

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