SpaceX explosion likely to cause some delay of launches

The loss of a SpaceX Falcon 9 rocket and Israeli communications satellite in a fiery launch pad explosion in Florida on Thursday comes just as the commercial space industry is starting to flourish.

Networks of hundreds or even thousands of small satellites are being proposed for launch in coming years. Launch companies dedicated to giving those tiny satellites a ride to space seem to crop up every few weeks. And launch schedules for SpaceX and its largest competitors are filled up through 2016 and beyond.

SpaceX has already completed eight launches this year and it had planned for an additional nine.

SpaceX will hold off on new launches until the root cause of the failure at SpaceX’s Cape Canaveral Space Launch Complex 40 is found. But while the investigation is likely to cause some delay in the Hawthorne company’s plans, industry analysts say it won’t have much of an effect on the burgeoning industry’s momentum or on the company itself.

“The small vehicle guys are going to continue to press on and it’s going to be more or less business as usual,” said Phil Smith, senior space industry analyst at the Tauri Group. “I think if it was an actual launch attempt, it would have a slightly different impression.”


Indeed, the fact that the explosion occurred before launch is key.

A launch-pad failure narrows the possible causes, and the investigation is probably less complicated than an explosion in flight, like the June 2015 disintegration of a Falcon 9 rocket just minutes after takeoff, industry analysts said.

That should cut the time before launching can resume.

“Every day that that satellite sits in a warehouse is lost revenue,” said Marco Caceres, senior space analyst for the Teal Group.

In a statement released Thursday, SpaceX said the “anomaly” happened during a “standard pre-launch static fire test” ahead of the expected Saturday launch of the Amos-6 commercial communications satellite. SpaceX said the explosion “originated around the upper-stage oxygen tank” and happened while propellant was being loaded into the Falcon 9 rocket.

There were no injuries and all workers were clear of the launch pad, in accordance with standard operating procedure, SpaceX said.

“We are continuing to review the data to identify the root cause,” the company said.

Because SpaceX already offers cheaper prices than the competition — the starting price for its Falcon 9 rocket is $62 million — companies probably won’t flee to other launch providers, Caceres said.

”It’s unlikely they’re going to lose customers unless it’s something that’s going to delay them months and months,” he said. “And I just don’t see that in this case.”

Satellite communications firm Iridium was set to launch 10 satellites aboard a Falcon 9 rocket at Vandenberg Air Force Base in California toward the end of the month. That is the first of seven launch contracts it has with SpaceX to build the firm’s eventual 66 satellite constellation dubbed Iridium Next.

The company’s satellites are already at the launch site awaiting fuel. Iridium spokeswoman Diane Hockenberry said the company was aware of the incident and confident that SpaceX would resolve any issues that caused the explosion.

“Once they do,” she said, “we’ll be ready to go.”

Still, Iridium’s stock price fell 56 cents, or 6.7%, to $7.77 on Thursday.

While most of SpaceX’s customers could probably handle delays, Iridium and NASA are the two with the most pressing schedules, said Bill Ostrove, aerospace and defense analyst at market research firm Forecast International.

NASA contracts with SpaceX to take supplies to the International Space Station.

The aerospace industry, of course, is no stranger to catastrophic accidents.

“We’ve had launch anomalies before and we will surely have them again,” Eric Stallmer, president of the Commercial Spaceflight Federation trade group, said Thursday. “It is a very short-term setback, but I think the industry is going to continue to move forward. The pace and the technological advancements that the industry is making, I think that outweighs what happened today.”

And compared with Russian rockets, which have had some workmanship mistakes over the last few years, American and European rockets are very reliable, Ostrove said.

He pointed to SpaceX’s 93% success rate, which is “right in the ballpark” of the industry average of 95%.

“There’s an expression that ‘space is hard,’ and it is,” Ostrove said. “Considering they do have a decent success rate, I don’t see much harm being done to the industry as a whole.”

The only danger is one that SpaceX could inflict on itself, analysts said.

With such a crowded launch schedule, the company cannot race through an investigation simply to stay on track with customer orders, Caceres of the Teal Group said. If other failures happen in a short period of time, SpaceX could start to lose customers, especially at a time when there is already concern about how the pace of small-satellite launches can keep up with current launch providers.

“They just can’t afford to take any shortcuts,” Caceres said.

For more business news, follow me @smasunaga