Space Technology Library

StellaTkatchova

Emerging
Space
Markets
Emerging Space Markets
SPACE TECHNOLOGY LIBRARY
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Stella Tkatchova

Emerging Space Markets

Stella Tkatchova
Brussels, Belgium

Space Technology Library

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To my Daughter
Preface

The objective of this book is to introduce commercial space activities and com-
mercialization processes in the last 15 years and to give an idea of the future
challenges NewSpace companies are bound to face when developing commercial
space markets. What is new and what has happened in these markets during that
period? Is there a business case for private companies for commercial space? What
are the targeted commercial space markets? Could the targeted markets of
NewSpace companies alone encourage the development of orbital commercial
space transportation services? Who are the future customers for commercial
space transportation markets? How can NewSpace companies attract investors? Is
there an existing business model that encourages this evolution, and what is it? Can
we learn lessons from the traditional space industry or other industries? What are
the lessons learnt from ISS commercialization for encouraging the creation of
sustainable NewSpace markets?In what way has the last 15 years made a difference
in the evolution of space markets? Is there a future for the commercialization of
space station services? These are some of the issues which will be discussed in
this book.

Commercial Space Activities

Over the past 20 years, space agencies have been exploring ways to encourage
private companies to get involved in the development of commercial space mar-
kets. Commercial launch services, space tourism, in-orbit satellite servicing, space
debris mitigation and space-based resource exploitation are some of the markets
worth exploring.
During those years, space agencies have learnt that commercialization of space
technology, built for scientific purposes, is challenging and difficult. Yet it also
holds the promise of new market opportunities, the development of new space
transportation vehicles and new space applications.

vii
viii Preface

In the early days of ISS commercialization, space agencies set up common

objectives and policies for encouraging the commercial utilization of the ISS
on-board resources by non-space companies (e.g. Pharma, Biotech, Medical Device
companies, etc.). However, in recent years, the ISS partners (e.g. NASA,
Roscosmos, ESA, JAXA, CSA) have undertaken vastly different approaches
towards commercial space activities.
The USA decided to follow the path of encouraging the development of a
competitive commercial space transportation industry and of strengthening US
leadership in space-related science, technology and industry. This led to the crea-
tion of a robust and competitive commercial space sector to enhance capabilities
for assured access to space (National Space Policy of the United States of America,
2010, 28th of June). This encouragement was driven by the Shuttle retirement in
2012, NASAs expensive dependency on Roscomos for flying US astronauts to the
ISS and budgetary constraints.
Through implementation of the NASA COTS and CCDev programmes, the USA
fostered the development of a commercial space transportation industry and the
development of orbital (e.g. Dragon, Cygnus, CST-100 Starliner) and sub-orbital
transportation vehicles (e.g. XCOR Lynx, etc.). This successful path continued
when NASA encouraged the implementation of similar programmes for future
lunar missions (e.g. Lunar Catalyst programme), future Mars missions or asteroid
mining missions, such as the Asteroid Redirect Mission (ARM).
In Europe, the ESA undertook a bottom-up approach towards implementing a
space exploration user-driven exploitation strategy driven by objectives related to
science, economics, global cooperation and an inspirational dimension. There-
fore, the envisaged strategic partnerships with the private sector in the space and
non-space industry may lead to products or services with the longer-term objective
of commercial viability (ESA, Call for Ideas, Space Exploration as a Driver for
Growth and Competitiveness: Opportunities for the Private Sector, 2015, 1/03/
2015).

Fig. 1 The first Cygnus commercial cargo spacecraft built by Orbital Sciences Corp. is
photographed by an Expedition 37 crew member on the International Space Station during
rendezvous and docking operations and SpaceX Dragon cargo grappled by the Canadarm (Credit:
NASA)
Preface ix

This bottom-up approach for gathering ideas will help ESA create future
programmes that will encourage the development of sustained exploitation of ISS
research utilization (e.g. lower cost, shorter time to access, increased number of
commercial companies, etc.), further evolution of Space 4.01 and regular ISS access
for the European user community. In response to the changing environment in the
global space arena, in 2017, ESA launched the Grand Challenge which is an
initiative to generate ideas, foster innovation, support cost-effective R&D and
encourage the development of new space applications.
Over the past 35 years, Europe has emerged as a recognized player in the
commercial space satellite launch market because of the successful Ariane
launcher. In order to sustain this competitive edge, Europe is now developing the
Ariane 6 launcher, which offers Ariane launch reliability which is coupled with a
competitive price advantage (Rumpf 2015). The European space industry will have
to find a balance between political and market forces, due to increasing competition
from US NewSpace companies in the commercial space transportation markets.
Nevertheless, implementing a bottom-up approach for gathering ideas for the
European space exploration strategy will result in new concepts that will offer
unique commercial market opportunities, not only to space companies but also to
non-space industries (e.g. Pharma, Biotech, etc.).

Background

The successful assembly of the ISS encouraged space agencies to start looking at
various ways to secure low-cost access to the station and to encourage the devel-
opment of new ways to utilize microgravity environment.
In recent years, the USA changed its strategy towards commercial human
spaceflight and focused on setting up goals for recapturing leadership in the
commercial space transportation market by reducing launch costs, thereby ensuring
a sustainable and efficient access to space (National Space Policy of the United
States of America, 2010, 28th of June).
Driven by the need to have reliable and permanent low-cost transportation
access to the ISS and to eliminate its dependency on Russian launchers, NASA
launched two new programmes in 2005, COTS and CCDev programmes, discussed
in Chap. 1.
With the launch of these programmes, NASA hoped to encourage the develop-
ment of privately owned commercial space transportation vehicles and to boost the
development of commercial space transportation markets. The successful evolution
of these programmes in the last 10 years led not only to the development of new
launchers like Falcon and Antares but also to the creation of the first commercial

1
Space 4.0 is considered to be the evolution in the space sector into a new era, through interaction
between governments, private sector, society and politics (ESA 2016d).
x Preface

transfer vehicles Dragon and Cygnus. They were successfully docked several times
to the ISS, transporting experiments and food to the ISS astronauts. All private
companies involved in investing, developing and building orbital and sub-orbital
space transportation vehicles or offering commercial services and products are
referred to as NewSpace companies.
The emergence of commercial spaceflight activities are, however, not new to the
international space community. For example, in the late 1980s and early 1990s in
the USA, a private company known as Spacehab developed a commercial module
to host experiments in the Shuttle Bay. In 1995, NASA signed a $54 million
contract with the company in support to the Shuttle/MIR logistics flights (Spacehab
2015). In the mid-1990s, Russias first attempts for commercial utilization of the
MIR space station emerged from the need to attract funding in order to keep the
MIR station operational2. The difficulties of the inevitable economic transition to a
market economy pushed the Russian space industry to face symbolic space budgets.
Russian space officials quickly identified new markets and encouraged the setup of
space entertainment projects (Tkatchova 2011). A few examples include flying a
Japanese journalist to the MIR space station in 1990, the launch of the Pepsi and
Pizza Hut branding projects and others3.
In Europe, the interest in commercial human spaceflight services started as a
result of the US and Russian commercial activities on board the ISS. They had a
potential promise, and in 2000, ESA set up a policy to encourage the commercial
utilization of 30% of the ESA Columbus module. Several R&D projects were flown
by ESA, linked to osteoporosis research (e.g. OSTEO facility), blood measurement
instruments (e.g. BMI), a new generation of energy saving lamps (e.g. high-
intensity discharge (HID) lamps) and some promotional products like the Mediet
food tray (ESA, ESA Health Care Network 2005) using new food processing
technology.
In contrast to the rest of the ISS partners, Japan started its commercial activities a
bit later. In 2004, JAXA set up the JAXA Open Space Lab programme aimed at the
creation of new projects and the development of a space brand4. The ASICS space
shoes is an example of such a commercial project. Other interesting commercial
projects are related to the development of space products, like space sake and space
yoghurt that was flown on the Russian ISS segment. These commercial projects
demonstrated the potential existence of commercial space markets, such as cargo/
crew transportation markets, space tourism, in-orbit satellite servicing and micro-
gravity R&D. Since 2000, commercial space start-up companies, or so-called
NewSpace companies, have attracted over USD13.3 billion investment from over

2
The MIR operations costs per year were between $220 million and $240 million (Astronautix,
1997). For more information, see Chap. 5.
3
Denis Titos flight was initially planned to be to the MIR station, however, with the de-orbiting of
the station in 2001, Denis Tito flew on the Russian segment of the ISS.
4
The space brand JAXA launch was called JAXA Cosmode Project which provided an official
brand for certified space-related products.
Preface xi

80 angel investors and venture-based space companies (Group 2016). According to

the same authors, in the early twenty-first century, an average of three space
companies were started per year, while in the last five years, the number of new
companies has averaged eight per year, with 2015 being the record setting year,
with an investment of USD2.3 billion and hundreds of investors, over 66% of which
being US-based and 34% being distributed in 25 countries. These optimistic figures
may be questioned by European commercial space start-ups, who have difficulties
accessing private venture capital in Europe. Certain companies will thrive in the
competitive environment, while others like Rocketplane and Excalibur Almaz will
have to announce the end of their activities.
Venture capitalists will be looking at a quick return of their investments, high
profits and short times for space-based products and services to reach the markets.
NewSpace companies will need to discover, identify and target commercial space
markets and attract new customers rather than the traditional space agencies.
Disruptive technology innovation will be the only way for these companies to
win new markets and remain competitive. The use of an inflatable space station
module (e.g. BEAM) on board the ISS and the launch of reusable vehicles are some
of the examples of imagination capturing innovations taking place. Such an exam-
ple is the return of a first stage of a rocket back to the launch site several minutes
after launch as Space X achieved with their Falcon 9 rocket. These innovations are
completely changing the business of the traditional space industry. The following
questions arise: Will reusable launch vehicles be much cheaper to use? Will the
refurbishing costs for the first stage of a rocket be sufficiently low to have profit-
ability on each launch? Will there be sufficient demand for the reusable vehicles?
What are going to be the environmental impacts from using these reusable rockets?
Will venture capitalists understand and be willing to invest in the development of
these vehicles and inflatable modules?
The market evolution of commercial space transportation markets may step up
the demand for development of reusable launch vehicles and encourage the creation
of self-sustainable commercial space markets.
With the implementation of the NASA COTS and CCDev programmes, the USA
has demonstrated a new vision that encourages the transition from government-led
to private industry-led human spaceflight activities in low Earth orbit (LEO). The
development of commercial space transportation vehicles under the NASA COTS
and CCDev programmes, in turn, will have a direct impact on the European space
industry. This evolution may go in two directions: it may either create or constrain
opportunities for the emergence of commercial space transportation services in
Europe.
European customers needing launch services may choose to directly buy trans-
portation services from US NewSpace companies due to their competitive prices
and maturity of their launch vehicles. This in turn will increase the European space
industry dependence on non-EU technologies. Understanding the challenges
European stakeholders face in the development of emerging commercial space
markets constitutes the first step towards analysing the risks and providing different
ways of creating commercial space markets in Europe. On the other hand, European
space companies may start collaborating with NewSpace companies to create joint
xii Preface

ventures, acquire new competencies and access new markets. In this way, they will
reduce Europes dependence on non-EU technologies.
The pioneering nature of developing new space transportation vehicles, the risks
before NewSpace companies in developing commercial spaceflight markets, in
defining the unique selling position of their solutions and dealing with the difficul-
ties to attract private investors face similar challenges and risks that private
companies and space agencies encountered in the space station commercialization
(e.g. MIR, ISS).
Traditionally, space agencies are the biggest public investors in space station
development and utilization. Historically, private investors had been reluctant to
invest in space station commercial utilization and projects due to high market risks
and long space qualification processes of commercial payloads. Private investors
had mainly invested in the development of telecommunications, navigation and EO
systems (e.g. DigitalGlobe, RadarSat, Deimos Imaging, exactEarth, Skybox). Tra-
ditionally, they have considered investments in launch systems and human space-
flight activities as risky and costly.

Conclusions

The commercial utilization of space technology has been a business challenge to

the space industry from the early days of the Space Shuttle. For over 20 years, space
agencies have been exploring ways to encourage and attract the involvement of
private companies in the development of commercial space markets. During these
years, space agencies have learnt that commercialization of space technology built
for scientific purposes is challenging and difficult, yet it also holds the promise of
new market opportunities, the development of new space transportation vehicles
and new space applications.
The potential future commercial space markets comprise commercial launch
services, space tourism, in-orbit satellite servicing, space debris mitigation and
space-based resource exploitation. Since 2000, commercial space start-up compa-
nies have attracted over USD13.3 billion investment from over 80 angel investors
and venture-based space companies. However, venture capitalists will be looking at
the quick return of their investments, high profits and short times for space-based
products and services to reach the markets. NewSpace companies will need to
discover, identify and target commercial space markets and attract new customers
rather than the traditional space agencies. Disruptive technology innovation will be
the driver for providing competitive advantages. The use of an inflatable space
station module (e.g. BEAM) on board the ISS and the launch of reusable vehicles
are some of the examples of imagination capturing innovations taking place. These
innovations are completely changing the business of the traditional space industry.
The questions that arise are as follows: Will reusable launch vehicles be much
cheaper to use? Will the refurbishing costs for the first stage of a rocket be
sufficiently low to have profitability on each launch? Will there be sufficient
Preface xiii

demand for reusable vehicles? What will be the environmental impacts from using
these reusable rockets? Will venture capitalists understand and be willing to invest
in the development of these vehicles and the construction of inflatable modules?
The current success of the NASA COTS and CCDev programmes provides a
precedent in the US human spaceflight programme and creates possibilities for
achieving the successful utilization of the ISS on-board resources. Other space
agencies like ESA have undertaken a bottom-up approach for gathering innova-
tive ideas for sustained exploitation of ISS utilization (e.g. lower cost, shortened
time to access, etc.). The successful evolution of these programmes and the creation
of self-sustainable commercial space markets may encourage space agencies to
implement similar programmes for future Lunar or Mars missions.

Brussels, Belgium Stella Tkatchova

Acknowledgements

The encouragement and support of my family and friends made this book a reality.
First of all, I would like to thank Ramon Khanna and in particular Alessia Valdarno
for their support and patience in the preparation of this book.
Next, I would like to thank Michel Van Pelt, Todome Kazuhide, Bruno
Carvalho, James Murray, Pierre Lionnet, Arno Wielders, Pierre-Francois Migeotte,
Gianluigi Baldesi, Jim Keravala and Ken Davidian for discussing and reviewing the
chapters and for providing me with their valuable ideas and recommendations.
Their inspirational views on the future of space exploration, the role interplanetary
travel, sub-orbital space industry, in situ resource mining, space debris mitigation
and commercialization of space technology inspired me to write many of the
chapters.
In addition, I would like to thank Amir Blachman, Silvio Sandrone and Clark
Lindsey for sharing with me their personal views on the future development of
human spaceflight, NASA COTS programme and evolution of commercial space
markets. I also would like to thank Barry Johnson, Theo Pirard, Nadia Imbert-Vier
and Bert Ulrich for they support on getting access to the right information and
access to the relevant images. Also I would like to thank Booster Industries,
NanoRacks, Bigelow Aerospace, Axiom and Planetary Resources.
I am indebted to my mum, the best Mum in the world, Stefana Roussenova, for
her courage to spend a month reading and editing my English and encouraging me
to continue writing. In addition, I would like to thank Mina Roussenova for helping
me crystallize some ideas and for her enthusiasm.
Finally, I would like to thank all my family, partner and friends for their great
support and patience during all these years.

xv
About the Book

This book analyses the commercial space activities and commercialization pro-
cesses of the last 15 years and maps the future challenges that NewSpace companies
will face developing commercial space markets.
What is new and what has happened in these markets up till now? Is there a
business case for private companies for commercial space? What are the targeted
commercial space markets? Who are the future customers for commercial space
transportation markets? How can NewSpace companies attract investors? Can we
learn lessons from traditional space industries or other companies in other areas? In
what way have the last 15 years made a difference in the evolution of space
markets? Is there a future for in situ resource mining, space debris services,
in-orbit satellite servicing and sub-orbital transportation? What are the lessons
learnt from ISS commercialization?
In addition the reader will find a synopsis of several space transportation
programmes, commercial space markets, future Moon and Mars missions, in situ
resource exploitation concepts, space debris mitigation projects and sub-orbital
commercial markets. Major lessons learnt are identified, related to the attraction
of first-time customers and long-term R&D funding, managing technological and
market risks and developing new markets and applications.

xvii
Contents

1 Space Agencies Commercial Space Transportation Programmes . . . 1

1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Demand for Commercial Cargo and Crew Launch Services . . . 4
1.4 Demand for Sub-orbital Launch Services . . . . . . . . . . . . . . . . . 5
1.5 NASA Commercial Space Transportation Programmes . . . . . . . 7
1.6 Worldwide Space Act Agreements . . . . . . . . . . . . . . . . . . . . . 8
1.7 NASA COTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.8 NASA CCDev . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.9 NASA CCP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.10 NASA Flight Opportunities Programme . . . . . . . . . . . . . . . . . . 13
1.11 Collaboration for Commercial Space Capabilities . . . . . . . . . . . 15
1.12 NASA Commercial Data Relay Satellites . . . . . . . . . . . . . . . . 16
1.13 Economic Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.13.1 Market Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.13.2 Economic Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.14 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2 Commercial Space Markets and Stakeholders . . . . . . . . . . . . . . . . 21
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3 Market Segmentation Challenges . . . . . . . . . . . . . . . . . . . . . . 24
2.4 Commercial Space Market Overview . . . . . . . . . . . . . . . . . . . 25
2.5 Criteria for Classifying Future NewSpace Markets . . . . . . . . . . 28
2.6 Description of Commercial Space Markets . . . . . . . . . . . . . . . 30
2.7 NewSpace Industry Stakeholders . . . . . . . . . . . . . . . . . . . . . . . 33
2.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3 Commercialization Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

xix
xx Contents

3.3 Space Shuttle Commercialization . . . . . . . . . . . . . . . . . . . . . . 36

3.4 Space Station Commercialization Lessons . . . . . . . . . . . . . . . . 38
3.4.1 Industrial Space Facility . . . . . . . . . . . . . . . . . . . . . . . 38
3.4.2 MIR Space Station . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.4.3 ISS Station Commercialization . . . . . . . . . . . . . . . . . . 44
3.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4 Interplanetary Settlement and In Situ Exploration . . . . . . . . . . . . . 49
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.3 Interplanetary Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.4 In Situ and Planetary Resource Exploitation . . . . . . . . . . . . . . . 53
4.5 Lunar Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.5.1 Moon Village . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.5.2 NASA Lunar Catalyst Programme . . . . . . . . . . . . . . . 62
4.5.3 NASA NextStep Programme . . . . . . . . . . . . . . . . . . . 63
4.6 Targeted Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.6.1 Lunar Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.6.2 Lunar 3D Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.6.3 Mining Asteroids . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.7 Mars Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.7.1 Mars One Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4.8 Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.9 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5 Commercial Space Station Activities . . . . . . . . . . . . . . . . . . . . . . . 73
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.2 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.3 Lessons Learnt from Space Station Commercialization . . . . . . . 78
5.4 Targeted Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5.5 Market-Driven Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
5.5.1 USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
5.5.2 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
5.6 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
6 Space Debris Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
6.2 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
6.3 Space Debris and Aviation Safety . . . . . . . . . . . . . . . . . . . . . . 98
6.4 ESA Space Debris Programmes . . . . . . . . . . . . . . . . . . . . . . . 99
6.5 JAXA Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
6.6 Targeted Markets and Services . . . . . . . . . . . . . . . . . . . . . . . . 101
6.7 In-Orbit Satellite Servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
6.8 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Contents xxi

7 Sub-orbital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
7.2 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
7.3 Sub-orbital Reusable Vehicle Lessons . . . . . . . . . . . . . . . . . . . 110
7.4 Targeted Sub-orbital Markets . . . . . . . . . . . . . . . . . . . . . . . . . 112
7.4.1 Space Tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
7.4.2 R&D Payloads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
7.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
8 Spaceports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
8.2 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
8.3 Targeted Markets/Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
8.3.1 USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
8.3.2 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
8.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
About the Author

Stella Tkatchova is a project manager for a Belgian space company and previ-
ously worked as a project manager on a long-term research innovation for the
European Commission. She also worked at the European Space Agency (ESA) on
payload commercialization and industrialization for the International Space Sta-
tion. In 2006 she was awarded a PhD by the Faculty of Aerospace Engineering of
the Delft University of Technology (the Netherlands), and she holds a Master of
Space Science from the International Space University (ISU).
She is the founder of the International Journal of Space Technology Manage-
ment and Innovation (IJSTMI) and an author of several articles on the commercial-
ization of space technology and the book Space-Based Technologies and
Commercialized Development. Her work and research experience give her a unique
insight in the financial and management issues that impact the future of commercial
space markets and NewSpace companies.

xxiii
Chapter 1
Space Agencies Commercial Space
Transportation Programmes

1.1 Introduction

The objective of this chapter is to present the demand for commercial launch
services, introduce space agencies commercial space transportation programmes
and analyse their economic impacts. The chapter will describe the role of commer-
cial programmes in the context of the evolution of NewSpace markets and future
space agencies exploration missions. The final recommendations will be related to
NASA COTS, CRS and CCDev1 programmes in the context of encouraging the
creation of sustainable commercial NewSpace markets, development of low-cost
launchers, new markets and space applications.

1.2 Background

In 2005 the Bush administration announced the launch of a US Constellation

programme for future human spaceflight missions and the retirement of the Space
Shuttle in 2011. The visionary programme came in response to the Columbia
accident in 2003 and aimed at demonstrating to the US people that the USA will
continue to pursue human spaceflight exploration. The programme was part of
President Bushs goals as set forth in the Vision for Space Exploration (VSE) which
was unveiled in January 2004. The primary objective of the VSE was to create and
implement a commercial cargo transportation programme. In 2005, Admiral Craig
Steidle under Sean OKeefe laid out a plan for existing and new launch vehicles to
compete for the development of a Crew Exploration Vehicle (CEV) (Foust, The

1
NASA Commercial Orbital Transportation Services (COTS) and Commercial Resupply Services
(CRS) are NASA programmes for delivering cargo to the ISS, Commercial Crew Development
programme (CCDev).

Springer-Verlag GmbH Germany 2018 1

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_1
2 1 Space Agencies Commercial Space Transportation Programmes

Space Review 2004). With the change of NASA management, there was a switch to
aiming at the creation of Ares 1/Ares V rockets and Orion capsule, to be designed
and developed by NASA. The proposed architecture for Constellation faced major
technical and budgetary challenges, mainly involving the Ares I launch vehicle,
which had to be safe, simple and soon (Simberg 2009). The proposed US
Constellation programme was a wonderful concept for returning to the Moon and
for future human Mars exploration missions, but unfortunately symbolic budgets
were allocated for it (Fig. 1.1).
In 2010 the Obama administration cancelled the US Constellation programme
but continued to support the development of US affordable, safe and sustainable
commercial space flight technology. The NASA COTS programme objective was
set to encourage private companies to design, develop, and test commercial space
transportation launchers and transfer vehicles. They will be used by NASA for
serving primarily transportation needs for the ISS and other customers after the
retirement of the Space Shuttle. Parallel to it, the administration also continued
supporting the future development of the Orion vehicle and the heavy Space
Launch System (SLS).
At present new ideas for future NASA exploration missions are emerging, for
instance, a mission for the implementation of an asteroid retrieval mission by 2025
(Studies K. I. 2012) by moving an asteroid the size of around 7 m to Lunar orbit,
another one for performing in situ resource utilization (ISRU) activities by astro-
nauts, a mission for analysing and extracting natural resources (i.e. a 7 meter asteroid
may contain up to 100 tons of water (Studies K. I. 2012), carbon, nitrogen, iron,
nickel, sulfur, platinum-group materials, etc.). A future Near-Earth Asteroid (NEA)
mission may attract either asteroid mining companies to exploit the resource-rich

$ in millions
25,000
Pres. FY05 Five-Year Retire Crew Complete Station First Human
Budget Plan Shuttle Exploration Research Objectives Lunar Mission
vehicle
20,000
FY05 Budget
(inflationary growth post 2009)
Exploration Missions
15,000
Human/Robotic Technology
Crew Exploration Vehicle

10,000 International Space Station

Space Shuttle
ISS Transport
5,000

Aeronautics and Other Science Activities

0
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
NOTE: Exploration missions Robotic and eventual human missions to Moon, Mars, and beyond
Human/Robotic Technology Technologies to enable development of exploration space systems
Crew Exploration Vehicle Transportation vehicle for human explorers
ISS Transport US and foreign launch systems to support Space Station needs especially after Shuttle retirement

Fig. 1.1 NASA Constellation programme 2004

1.2 Background 3

asteroid or space companies ready to exploit the asteroid resources. The advancement
of full-scale commercial operation activities will also boost the demand for services
to space customers. Low-cost space transportation vehicles may become the primary
transportation vehicles in future mining missions, and the commercial space trans-
portation industry will thrive. By demonstrating the success of commercial space
transportation vehicles, NASA can continue to encourage the development of com-
mercial space transportation markets.
With the launch of NASA COTS programme, the agency avoided the experience
of developing an extremely expensive and complex launch vehicle, such as the
Space Shuttle. The programme was born of NASAs need to access the ISS, to
reduce technology development costs and to encourage the creation of a new type
of vehicle that will serve both institutional and commercial customers.
The demand for commercial launch services is both for civil and military
purposes, while the demand for sub-orbital launches is considered to be primarily
commercial. In addition there is a demand for launching 1520 commercial GEO
satellites globally every year. SpaceX is now launching about 50% of those. The
number of LEO satellites ranging from Iridium and DigitalGlobe mini-sats to
Planet Labs CubeSats is quite substantial and growing rapidly. SpaceX, ULA,
Orbital as well as new small launch vehicles will be launching more and more of
those as well (Fig. 1.2).
The demand for orbital launch services naturally increased with the retirement of
the US Space Shuttle in 2011. Its withdrawal created a new market opportunity for
launch services to the International Space Station (ISS). Currently this opportunity
is managed by NASA and well exploited by Russia in the provision of Soyuz launch
services to the USA. In 2009 NASA signed an agreement with Russia for longer-
term flight opportunities on board the space station that allow US and European
astronauts to work on board the space station for a period of around 6 months. The
NASA and the Russian Federal Space agency (Roscosmos) also signed a contract
worth of up to USD719 million under which NASA purchased 15 seats and 5.6 tons
of cargo delivery to the space station. In 2013 the US President extended the

Fig. 1.2 Worldwide commercial launches in 2015 (FAA 2016)

4 1 Space Agencies Commercial Space Transportation Programmes

contract with Roscosmos by an additional USD424 million modification for full

crew transportation services to the International Space Station. This is an opportu-
nity that NASA offers to NewSpace companies and is explored by the two finalists
under the COTS programme with the successful launch and docking of the Dragon
and Cygnus vehicles to the ISS. Thus, their cargo transfer vehicles can reach the
necessary maturity and reliability under the frame of NASA COTS and CCDev
programmes.

1.3 Demand for Commercial Cargo and Crew Launch

Services

Historically in space industry, civil and military institutional customers have had a
strong impact on the demand for launch services, thus influencing the commercial
launch services market.
Crewed flights on board commercial transportation capsules to the ISS are
assumed to start in 2017, as presented in Fig. 1.3 that shows NASA ISS commercial
cargo and crew flights from 2012 to 2021.
The FAA assumed that there would be around 64 launches using commercial
cargo and crew services for ISS resupply which means around 67 launches per
year of heavy launch payloads. In this way NASA has guaranteed a sufficient
launch market for NewSpace companies until the lifetime of the ISS.
These launches may increase in case of the successful development, launches
and exploitation of Bigelow space stations. However, the institutional demand for
commercial crew and cargo transportation services may drop within several years
after the end of the ISS in 2028. The rate of reduction of the demand until the end of
the ISS will be directly influenced by NASA and other space agencies operating
human space flight exploration missions and will be dominated by the institutional
customers.

Fig. 1.3 Forecast for COTS, CRS and commercial crew missions
1.4 Demand for Sub-orbital Launch Services 5

However, the lack of post-ISS exploration of human space flight missions will
create a very high level of strategic uncertainty for NewSpace companies. In 2024
the ISS markets will have reached a mature stage of market evolution, and there will
be a sustained demand for microgravity platforms. Therefore, NewSpace compa-
nies will be competing to offer cargo launch services2 not only to NASA but also to
military customers like the US DoD and DARPA.
The question arises: what uses these commercial human-rated transfer vehicles
will be put after the retirement of the space station? Do NewSpace companies
already consider any new ideas, for example, Bigelow inflatable stations,3 future
Mars One mission or other exploratory missions?4 Future Mars missions will
generate demand for future commercial launch and cargo services and hence
open new markets for NewSpace companies. An additional demand for commercial
cargo launch services may be generated from the teams that participate in the
Google Lunar X Prize or NASA Lunar Catalyst programme and use NewSpace
launch vehicles for launching their rovers to the Moon.
In order to prevent loss of revenues due to the space station retirement,
NewSpace companies have already started securing contracts for launching tele-
communications, military and Earth observation satellites. In the case of SpaceX,
its launch list was so overbooked that certain launches get delayed.
NewSpace companies will most probably start offering regular cargo launch
services to military institutional customers that will generate sufficient demand for
their services and thus put traditional space companies under competitive pressure.

1.4 Demand for Sub-orbital Launch Services

With the successful launch of SpaceShipOne in 2004, the last 12 years have brought
hopes for the creation of a sub-orbital industry with the prime objective to offer
space tourism services. Sub-orbital vehicles will fly up to 100 km to the border of
space and offer a microgravity environment of around 4 min which will give
researchers short flight opportunities at a lower cost and higher flight rates than
flights to the space station.
Presently high publicity is given to sub-orbital vehicles both in the USA and
Europe around 2004; new sub-orbital vehicles are under development, and compa-
nies start branding and offering sub-orbital transportation services for both

2
In particular for the companies that are developing human-rated transfer vehicles like the Dragon,
Cygnus and the CTS-100 under NASA COTS programme.
3
In 2016 the BEAM module was launched and docked to the ISS, and several days later it was
successfully opened.
4
Future Mars missions could also be driven by private initiatives similar to the Mars One of
sending on a one-way trip future Astronauts to Mars on a one way trip to Mars. At present
advocates for future Mars missions believe that SpaceX Falcon Heavy launch vehicle provides the
most affordable transportation means.
6 1 Space Agencies Commercial Space Transportation Programmes

Fig. 1.4 Tauri projections for sub-orbital flight (Group T. T., Suborbital Reusable Vehicles: A
10 year forecast of Market Demand 2013)

payloads and for the launching of microsatellites to global customers. In 2014

Virgin Galactic announced its plan to build a space port in Abu Dhabi.
Over the last few years, sub-orbital companies have diversified their markets and
aimed at launching microsatellites in LEO, performing Earth observation missions
for meteorological agencies and also parabolic flights. Sub-orbital service providers
are targeting to offer services to at least eight markets in addition to space tourism.
As presented under the FAA report and a study performed by The Tauri Group,
their targeted markets are commercial human space flight, satellite deployment,
remote sensing, aerospace technology test and demonstration, basic and applied
research, education, media and public relations and point-to-point transportation.
The primary targeted market is space tourism as presented in Fig. 1.4, and the
projections show that in the first year, there will be around 373 seats per year
(Group T. T., Suborbital Reusable Vehicles: A 10 year forecast of Market Demand
2013). The current reservation trends correspond to the constrained scenario with
an expected growth of up to 4%; for the baseline scenario, the expected growth can
reach up to 18% per year and for the growth scenario up to 40%. However, It is very
difficult to predict consumer behaviour for a period of 10 years; hence, the more
realistic scenario is the constrained scenario.
The second market with the highest estimated demand is the basic and applied
research market5 referred to as R&D market. This market is related to the successful
launch and operation of R&D experiments for osteoporosis, protein crystallization,
cell/tissue engineering and medical device testing on board sub-orbital vehicles.
Flying and testing payloads on board sub-orbital vehicles may be less expensive,

5
This market is similar to the targeted ISS RD markets that ISS partners wanted to develop in 2001
when they initiated ISS commercialization.
1.5 NASA Commercial Space Transportation Programmes 7

and fewer safety regulations will apply for flying payloads than for space tourists. In
spite of that, NewSpace companies may face similar challenges in developing these
markets as the ISS partners faced in developing new markets and attracting
pharmaceutical companies to perform research in microgravity environment.
In the post-ISS era and in view of the lack of any other space station in LEO,
there is a possibility for an increase of demand for basic and applied research on
board SRV, particularly with space agencies becoming the prime customers for
performing experiments on board sub-orbital vehicles. Therefore, it is possible that
demand for this market would outgrow the space tourist one. In addition, certain
NewSpace companies may decide to develop first this market and only then the
space tourist one, as the safety and regulative requirements are much more stringent
and costly to companies rather than the ones for qualifying payloads for unmanned
flights.
The third market with an unexplored potential has to do with the use of
sub-orbital vehicles for microsatellites launches. At present Virgin Galactic,
XCOR, Starfighters, Dynetics, Interorbital Systems, Generation Orbit Launch Ser-
vices and Microcosm are looking at adapting their vehicles for launching
microsatellites. Nevertheless, sub-orbital launch service providers will have to
develop strong business cases and identify demand in order to convince their
investors to invest additional money in adapting their sub-orbital vehicles for
microsatellite launches.
Both the demand growth for space tourist activities and basic and applied
research can be expected; the latter may even overtake in demand the space tourist
market. With the expected retirement of the ISS in 2024, space agencies may turn to
sub-orbital platforms for performing their microgravity experiments. NewSpace
companies may at first develop this market due to less stringent requirements for
flying payloads than space tourists. With the potential growth of microsatellite
market using sub-orbital vehicles still unclear, the expected growth of 4% of the
space tourist market may be sufficient to encourage the sub-orbital industry devel-
opment and growth.

1.5 NASA Commercial Space Transportation Programmes

In 2004 President Bush announced the US Constellation programme with the

objective to return with a human space mission to the Moon and to Mars after
2035 and to encourage the development of commercial transportation capabilities
with the launch of NASA COTS programme. During the same period, the X Prize
foundation together with private entrepreneurs created the Ansari X Prize, a prize
that offered a USD10 million prize for the first non-governmental organization that
launches a reusable manned spacecraft for a period of 2 weeks. The prize was won
by SpaceShipOne designed by Burt Rutan which started a new era of the emergence
of sub-orbital reusable vehicle developments that attracted private funding from
prominent entrepreneurs. The increased private investors interest to invest in
8 1 Space Agencies Commercial Space Transportation Programmes

developing commercial space transportation vehicles, the promise of the space

tourist market and the NASA demand for space transportation services due to the
retirement of the Space Shuttle created good conditions for the launch of NASA
commercial space transportation programmes. These programmes are under NASA
Space Act Agreement (SAA) and give the agency the possibility to partner with
industry, foreign governments and associations in order to advance its space mis-
sions. In 2006 NASA COTS programme was launched with an allocation of
USD500 million for the COTS programme and USD50 million for the development
of the Commercial Crew Development (CCDev) services. These programmes have
evolved and encouraged the development of commercial space markets, new
services and the emergence of new players.
In 2017, with Donald Trump being the new US President support for NASA
initiatives to encourage commercial crew and cargo transportation services and the
growth of the space economy in the USA will probably flourish.

1.6 Worldwide Space Act Agreements

Countries all over the world have set up Space Act Agreements in order to be able to
encourage the NewSpace companies to exploit new business opportunities.
In Europe Sweden has set up a Space Act Agreement that establishes the
regulatory regime of having licences for carrying space activities from Swedish
territory.
In the USA, NASA partners with various organizations under the SAA and
offers new commercial opportunities to the industry. The agreements under SAA
are reimbursable, non-reimbursable, funded and international. Through the funded
and unfunded agreements, NASA encourages the development of commercial
space crew and cargo transportation capabilities in the USA. By 2014 NASA has
signed the following funded6 and unfunded7 Space Act Agreements (SAA):
Funded Crew SAA: Round I Blue Origin, Boeing, Sierra Nevada Corporation,
United Launch Alliance (ULA) and Paragon Space Development Corporation
Funded Crew SAA: Round IIBlue Origin, Boeing, Sierra Nevada Corporation
(SNC), Space Exploration Technologies (SpaceX)
Funded Cargo SAA: Orbital Sciences Corporation, SpaceX
Unfunded Crew SAA: Round IIAlliant Techsystems Inc. (ATK), Excalibur
Almaz Inc., United Launch Alliance (ULA)

6
Funded agreements are the ones under which the commercial crew/cargo services are for concrete
NASA missions.
7
By these types of agreements, NASA encourages these companies to develop innovative tech-
nologies by sharing technical requirements for cargo and crew transportation vehicles.
1.7 NASA COTS 9

The SAA agreements provide opportunities for the industry to easily access
NASA space engineering competencies and gain a better understanding of NASA
crew/cargo requirements. The benefit for NASA is to gain access to a variety of
suppliers that operate commercial crew/cargo space transportation vehicles. Being
one of the main customers of NewSpace companies, the agency will have the
purchasing power to negotiate lower prices for using commercial space crew and
cargo services.
In Asia, Japan is a country with a well-established Space Activity Law which
encourages private companies to launch satellites and boost commercialization of
space technology.

1.7 NASA COTS

In 2006 NASA launched the NASA COTS programme with an initial budget of
USD800 million with the objective to encourage commercial space industry to
develop and demonstrate safe, reliable and cost-effective transportation capabili-
ties. The companies are paid only when reaching certain development milestones in
their technology concept developments.
Capability AExternal/unpressurized cargo delivery and disposal
Capability BInternal/pressurized cargo delivery and disposal
Capability CInternal/pressurized cargo delivery and return
Capability DCrew transportation
In 2006 three companies were selected to be financed under the COTS
programme: SpaceX, Rocketplan Kistler and Orbital Sciences Corporation. However,
in 2007 NASA terminated its agreement with Kistler due to financial and technical
shortfalls. Both companies were committed to the development of an integrated cargo
transportation system that includes launcher vehicles and cargo/crew capsules.
SpaceX won a contract of $396 million for the development of the Falcon
9 launch vehicle and the Dragon capsule, while Orbital won a contract of $288
million for the Antares launch vehicle and the Cygnus spacecraft.
Since 2010 SpaceX has launched the Falcon 9 successfully many times and a
few times the Dragon cargo vehicle which was the first commercial transfer vehicle
to visit the ISS. SpaceX has won an additional funding of $1.6 billion for providing
at least 12 cargo resupply missions to the ISS for NASA and its ISS partners. The
Antares vehicle of Orbital was launched in 2013, and Cygnus transfer vehicle
successfully docked to the ISS. In addition Orbital also won a $1.9 billion contract
with NASA for the provision of at least eight cargo resupply missions to the space
station. Through NASA COTS programme, NASA has access to two launch and
transfer vehicles. Through the implementation of NASA COTS programme, NASA
may have lower technology development and operating costs and at the same time
implement a programme that is attractive politically for NASA and offer an
interesting commercial opportunity to the industry. Furthermore, NASA may
10 1 Space Agencies Commercial Space Transportation Programmes

offer to the rest of the ISS partners to use the Dragon and Cygnus transfer vehicles
for transporting their experiments to the International Space Station, thus indirectly
supporting the US NewSpace companies to enter new international markets.
Therefore, space agencies that have invested in developing and launching their
transfer vehicles like the ATV8 and the H-II will be exposed to competition from
the Dragon/Cygnus transfer vehicles. Furthermore, due to budgetary pressures in
combination with lower launch prices from NewSpace companies, certain ISS
partners may choose to use the services of NewSpace companies. This could be
beneficial in the short term but could endanger the future growth of the national
space companies that contribute to the development of the ATV and H-II vehicles.
The launch success of SpaceX Falcon vehicle and Dragon capsule demonstrated
the potential of the COTS programme. A similar COTS-like programme approach
may be discussed in the long-term future for NASA Asteroid mission to NASAs
Innovative Lunar Demonstration Data (ILDD) programmes. The true success of
NASA COTS programme can be at hand only after the demonstration of safe,
reliable and cost-effective sustainable space transportation capabilities even after
the lifetime of the International Space Station. This programme encourages US
NewSpace companies not only to develop new crew/cargo launch and transfer
vehicles but also to enter the international launch markets and compete with
traditional space companies.

1.8 NASA CCDev

In addition to NASA COTS, there is the Commercial Crew Development (CCDev)

programme funded and managed by NASA. The programmes objective is to
encourage the private sector to develop and demonstrate safe and cost-effective
space transportation capabilities, such as launch vehicles and spacecraft. The
programme has three phases: the first one is CCDev 1, CCDev 2 and CCDev
3 renamed Commercial Crew Integrated Capability (CCiCAP). The mission objec-
tives of the programme are to deliver and return four crew members, provide safe
crew return in case of emergency and remain docked to the space stations for
210 days.
The CCDev programme started in 2010, and around USD50 million were
awarded to five companies. The companies selected were Blue Origin, Boeing,
Paragon Space Development Corporation, Sierra Nevada Corporation and United
Launch Alliance.
The second round of the Commercial Crew Development (CCDev2) kicked off
in April of 2011 when NASA awarded nearly 270 million to four companies to aid

8
ESA ATV programme had initially planned to have built and launched seven ATV to the ISS.
However, only five were launched to the ISS; the ATV was considered by many experts as one of
the most expensive transfer vehicles.
1.8 NASA CCDev 11

in further development and demonstration of safe, reliable and cost-effective

transportation capabilities.
Blue OriginFor the development of a launch abort system and the develop-
ment of a composite pressure vessel, etc.
BoeingFor the development of their CST-100 capsule for both seven crew and
cargo configurations
Paragon Space Development CorporationFor the Environmental Control and
Life Support System (ECLSS) Air Revitalization System (ARS)
Sierra Nevada CorporationFor the development of the Dream Chaser
sub-orbital and orbital spaceplane that will carry either cargo or up to eight
passengers
United Launch AllianceFor the Emergency Detection System (EDS) for
human rating of its EELV launch vehicles
SpaceXFor the launch abort system of the Dragon capsule
The third round of the CCDev programme now referred to as CCiCAP started in
August 2012 and lasted until 2014. Its objectives were to support the industry to
mature the design and development of an integrated Commercial Transportation
System (CTS) (Tkatchova, FAA Role in Encouraging the Development of the
U.S. Commercial Space Transportation Industry: Interview with Ken Davidian,
Tkatchova (2011b). The selected companies for the third tour are Sierra Nevada
Corporation for the development of the Dream Chaser spaceplane/Atlas V, SpaceX
for the Dragon capsule/Falcon 9 system and Boeing for the CST 100/Atlas V
system. The allocated funding by programme phase can be seen in Fig. 1.5.
Boeing, SpaceX and Sierra Nevada Corp (SNC) are the three companies with the
highest funding under CCiCAP programme. Today in 2017, Orbital ATK has built
and successfully launched its Cygnus capsule and SpaceX its Dragon cargo capsule,
while SNC is planning to launch its Dream Chaser Cargo in 2020 to the ISS.

CCDev /CCiCAP funding summary

CCDev 1 (2010-2011) CCDev2 (2011-2012) CCiCAP(2012-2014)

460
440

212.5

92.3 80 75
22 18 20 6.7
3.7 1 1.4

Blue Origin Boeing Paragon Space Sierra Nevada United Launch Space X
Development Corporaon Alliance
Corporaon

Fig. 1.5 CCDev/CCiCAP funding 20102014

12 1 Space Agencies Commercial Space Transportation Programmes

Starting from 2019, SpaceX and Boeing will be providing crewed transportation
services to the ISS. NASA had chosen Boeing CST-100 Starliner concept and
SpaceX Crew Dragon capsule for launching astronauts to the ISS.
Under CCDev 2, NASA also selected unfunded proposal from companies like
ULA, ATK and EADS Astrium and Excalibur Almaz Inc. Sadly Excalibur Almaz
was liquidated and its only capsule auctioned.
Nevertheless, the proposals selected under CCDev 2 without NASA funding
should not be ignored. Three companies were selected by NASA, and they self-
finance their technology developments and will cooperate with NASA for the
following developments:
ULA proposed additional work for human rating of the Atlas V launcher. NASA
signed a SAA for sharing information towards human rating Atlas V.
ATK and EADS Astrium proposed the development of the Liberty rocket
derived from Ares I and Ariane 5. With this agreement, NASA is sharing
expertise and technology.
At present these agreements are unfunded. However in case the above compa-
nies succeed in their technology developments, it is possible that NASA should
change its policy depending on change of its mission needs and fund them. The
companies above may be able to attract sufficient non-NASA customers and enter
new markets; thus, further evolving their concepts and generating sufficient inno-
vation are of interest to NASA.

1.9 NASA CCP

The objective of NASA CCP was to develop space transportation systems that will
safely launch astronauts to the ISS. The agency foresees the CCP programme as a
cost sharing for new technology developments.
NASA defines the technical requirements for the crew vehicles, such as requiring
that the vehicles carry at least four crew personnel, must be capable of providing a
safe haven during an emergency in space and be capable of remaining docked to the
space station for a minimum of 210 days. The companies select their own designs to
fulfil those requirements and lead the development of the implementations of those
designs. NASA and the companies agree on an oversight framework, development
milestones and tests to insure that the systems do in fact fulfil those requirements to
NASAs satisfaction.
The CCP consisted of several phases, each with particular goals, rounds of
participant selection, separate funding requests and contracts. The phases include:
Commercial Crew Development (CCDev)Split into CCDev 1 and 2
Commercial Crew Integrated Capabilities (CCiCap)Originally CCDev 3
1.10 NASA Flight Opportunities Programme 13

Commercial Products Contract (CPC) Phase 1

Commercial Crew Transportation Capability (CCtCap)New name for CCP
Phase 2
There were complex politics involved in the CCP that involved some powerful
figures in the US Congress that sought to slow if not kill the programme. For several
years, the CCP received substantially less funding than requested by the Obama
Administration. The political battles surrounding the CCP are outside of scope of
this book except to say that they were at least partially to blame for the slow growth
of the programmes annual funding.

1.10 NASA Flight Opportunities Programme

NASA Flight Opportunities programme offers flight opportunities for companies

and universities to fly their technology experiments on board sub-orbital vehicles,
parabolic flights and high-altitude balloons. NASA has provided up to USD3.5
million funding of testing of around 14 experiments that will be flying on board
commercial sub-orbital vehicles. The experiments will perform research on active
thermal management, advanced avionics, pinpoint landing and advanced in-space
propulsion. They will be tested on board SpaceShipTwo and the Xaero sub-orbital
vehicles and in the future on board the Lynx vehicle.
NASA has signed six commercial-type contracts with the following companies:
Blue Origin
Masten Space Systems
Near Space Corporation
UP Aerospace
Virgin Galactic
World View
The programme offers other reusable sub-orbital platforms like the SpaceLoft
tm XL, mCLV-RSR and STIG and also access to high-altitude balloons. For
example, the first flight of SS2 under NASA Flight Opportunities programme was
scheduled for mid-2014 (Fig. 1.6).
NASA Flight Opportunities programme encourages the development of new
technologies and the R&D markets (NASA, ARC Instrument Working Group
2016a, 3rd of August). It offers the opportunity to sub-orbital service providers to
build up a backlog of flights and increase reliability of the selected commercial
reusable sub-orbital vehicles, thus indirectly learning about the payload require-
ments of the R&D customers from NASA STEM community.
Does that mean that these NewSpace sub-orbital vehicle companies are also
competing to secure NASA and its STEM community for customers? Is there not a
danger that the first NewSpace companies under NASA Flight Opportunities
programme would create very high market entry barriers for the follow-up
14 1 Space Agencies Commercial Space Transportation Programmes

Fig. 1.6 NASA Flight Opportunities programme (Credit: NASA)

NewSpace companies? The following questions arise: Is NASA going to include

other reusable sub-orbital vehicles in their Flight Opportunities programme for
researchers? For how long will the Flight Opportunities programme fund the
research that will be flown on board the same vehicles? This will demotivate
newcomers from entering into NASA Flight Opportunities programme and thus
limit the choice of sub-orbital vehicle platforms for research experiments.
In 2014, NASA selected 12 experiments that will be flown on board SS2 under
the NASA Flight Opportunities programme. Therefore, Virgin Galactic will have
the opportunity to learn about the STEM R&D needs for payload integration, gain
payload integration competencies and possibly aim at developing the R&D micro-
gravity markets.
However, only companies that have operational sub-orbital vehicles will gain
view over the end-customer needs. The companies that have not reached the same
level of technology development may become laggers and once ready may be
exposed to unfair competition as the first comers will have already secured
institutional customer from NASA. The STEM community market is a small
market with NASA being the main player; it is a market with low profitability
and limited potential for generating economies of scale. Therefore, this market
will hardly be able to sustain newcomers and probably not even well-established
players.
Nevertheless NASA Flight Opportunities programme provides an opportunity
for NewSpace sub-orbital companies to build flight reliability, improve their tech-
nology and secure future customers. They will possibly aim at developing the R&D
microgravity markets.
1.11 Collaboration for Commercial Space Capabilities 15

1.11 Collaboration for Commercial Space Capabilities

In addition to the funded programmes, NASA also launched Collaboration for

Commercial Space Capabilities programme for companies to partner with NASA
for designing and developing commercial lunar landers. This programme is an
unfunded one. The objective of the CCSC programme is to encourage the devel-
opment of private sector integrated space capabilities so that the emerging products
or services are commercially available to government and non-government cus-
tomers. Through the Lunar Catalyst programme, NASA is encouraging the industry
to develop commercial lunar cargo capabilities that will deliver payloads to the
lunar surface.
The recently selected companies are the following:
Astrobotic TechnologyDeveloped its first software version of its flight soft-
ware for precision guidance for the Griffin lander
Masten Space SystemFor the development of the XEUS lander
Moon ExpressFor the development of the MX-1 lander
For a 3-year period, NASA will provide support through engineering expertise,
access to test facilities, equipment loads and/or software for lander development
and testing (Fig. 1.7).
The future markets for commercial lunar landers are still unclear regardless of
the ongoing discussions about lunar mining in the context of resource extraction
(Helium 3). In case NewSpace companies develop new robotic commercial landers,
NASA will have knowledge and access to these landers. Furthermore, the

Fig. 1.7 NASA Lunar exploration (Credit: NASA)

16 1 Space Agencies Commercial Space Transportation Programmes

experience of NewSpace companies in developing cheaper and miniaturized com-

mercial lunar landers may be beneficial to NASA for future robotic missions.
NASA will also be able to buy commercial lunar lander services in a similar way
as under the COTS programme, as a customer and without investing in the
technology development of the landers. The selected technology concepts would
be similar to the ones competing for Google Lunar Prize.
In case of successful development of commercial lunar markets such as the ones
for commercial robotic resource extraction or new medicine development under
lunar gravity or education activities, NASA will be able to gain political support
and justify future Asteroid Retrieval Mission (ARM).
The market potential of commercial lunar markets is unknown and unexplored,
in spite of the fact that the interest in Google Lunar X Price demonstrates strong
commercial possibilities.

1.12 NASA Commercial Data Relay Satellites

NASA issued a call for proposals in which commercial companies can offer to
NASA relay services to support users at Mars, including landers and rovers and
potentially future aerobots and orbiters. The commercial company will owe and
operate the relay service orbiter, while NASA will service over some period of
time. The idea is that the agency encourages innovative and more cost-effective
ideas9 for serving the communication needs of the Mars landers.
Data relay services are provided for current and future Mars missions such as
Mars Atmosphere and Volatile Evolution (MAVEN), Interior Exploration using
Seismic Investigations, Geodesy and Heat Transport (In Sight) and the European
mission ExoMars. Besides NASA, other space agencies like ESA may buy data
relay services for supporting data communication for their missions. In addition
other future Mars missions like Mars One may use these services to complement
their own.
Mars-bound Demonstration Mission and Communication Satellite will be
launched in 2018. Future data relay service providers will be able to target potential
customers not only institutional customers such as NASA and ESA but also offer
services to NewSpace companies, such as Mars One. Furthermore, securing space
agencies as an end customer for commercial data relay services will attract private
investors to the project. Nevertheless, certain commercial companies may be
reluctant to operate such orbiters due to high operating costs. However, these

9
NASA successfully demonstrated optical communications from the Lunar Atmosphere and Dust
Environment Explorer (LADEE) spacecraft at the Moon to Earth, with download rates of
622 megabits per second (Mbps). It also demonstrated an error-free data upload rate of 20 Mbps
transmitted from the primary ground station in New Mexico to the spacecraft orbiting the Moon.
1.13 Economic Impacts 17

companies may receive initial support from NASA to leverage the risk associated
with high operating costs.
The above initiative opens new business opportunities for NewSpace and tradi-
tional space companies which will bring benefits both to space agencies and
commercial companies.

1.13 Economic Impacts

The market evolution of commercial space transportation services will result in

economic spillovers in other industry sectors, such as information technologies, real
estate, manufacturing and others. The newly created markets will evolve in differ-
ent market structurescertain markets may resemble oligopoly while others
monopoly, and therefore, new entrants may be exposed to various high market
entry barriers. Furthermore, measuring the economic benefits from the NewSpace
company activities will result in attracting institutional and private investments.

1.13.1 Market Structures

In the evolution of commercial space transportation markets, NewSpace companies

will depend initially on NASA funds under the COTS, CCDev and other
programmes. Part of these programmes will have access to NASA R&D require-
ments and its STEM community needs. Thus, there is a danger that companies
which are part of NASA Flight Opportunities programme would create high market
entry barriers for newcomers.
In order to prevent the creation of oligopoly market structures, NASA will have
to carefully monitor the call for proposals under COTS and CCDev programmes.
This will prevent the NewSpace companies from creating high market entry
barriers to future players.

1.13.2 Economic Benefits

In 2016 the US NewSpace companies reached more than 50 companies, thus

bringing economic benefits to the US economy, such as employment, increased
revenues from sales, increased importance of aerospace technology innovation
projects and others. Nevertheless, the current economic conditions create a difficult
environment for NewSpace companies to access venture capital and win govern-
ment support. Governments will be pushed to justify their space technology invest-
ments but will start using the services of commercial space transportation
companies in order to reduce space mission costs.
18 1 Space Agencies Commercial Space Transportation Programmes

The direct and indirect economic benefits are interdependent: some like employ-
ment or revenues from certain economic activities have spillovers in other sectors
like information services, manufacturing, real estate, rental, leasing, finance, insur-
ance, health care, education and others. For example, in 2010 the FAA measured
the economic impacts of commercial space transportation services in other indus-
tries taking into account the employment, economic activity (the value of goods/
services produced in an economy) and earnings and the sum of employees salaries
(FAA, The Economic Impact of Commercial Space Transportation on the
U.S. Economy 2010).
The economic spillovers of commercial space transportation activities will
probably increase with the market evolution of commercial space transportation
markets. Future European institutional bodies such as national space agencies may
consider measuring the economic spillovers from NewSpace activities in other
industry sectors like housing, health, education and others.
In spite of that, NewSpace companies will have to be able to attract private
investment, develop their business models, calculate their net present value (NPV)
and rate of return, perform sensitivity analysis and perform SWOT analysis and
therefore will have to measure the socio-economic impacts of their activities. They
could be the following:
Direct benefitsEmployment, new space application markets, revenues from
sales, increased cost savings, technology reliability and operability
Indirect benefitsFree publicity, technology innovation, international partner-
ships, education and environment monitoring/protection
In the context of the economic benefits which NewSpace companies bring, there
are many examples. In the orbital market companies like SpaceX, they generate
both direct and indirect benefits. For example, the direct benefits for SpaceX are
around 2000 employees, revenues from sales, increased cost savings for their
customers, technology interoperability, free publicity and international partner-
ships. Increased cost savings are from lower launch prices which SpaceX offers
to its customers, due to their capability to keep development, design and production
in in-house facilities and the lack of subcontractors. Combined with aggressive
business development, this will allow them to have a very competitive market
positioning and lower launch prices and to put competitive pressure on traditional
launchers like Ariane 5 ECA, Proton M and others.
SpaceX with their Falcon 9 vehicle offer competitive prices for commercial
satellite operators. Blue Origin with their New Glenn reusable first stage launcher is
expected to be launched in 2020 from Cape Canaveral which also offers compet-
itive launch prices. Their first customer for their launch in 2021 is Eutelsat, a
European organization which traditionally launches its satellites with Ariane 5.
These prices not only put under competitive pressure traditional launch service
provide, but put immense pressure on Arianespace to be able to offer competitive
low-cost launch services. ESA and the EU in the long-term future may decide to
create a joint undertaking which will not only aim at implementing the EU space
strategy but also contribute to support European space companies to sustain their
competitiveness and develop new services.
1.14 Conclusions 19

The above is combined with technology interoperability of their Dragon capsule

with the ISS, the massive public support and worldwide free publicity they have
generated. Furthermore, they will generate direct benefits from the partnership they
set up with Bigelow Aerospace for international customers that will use Falcon 9 to
fly on board the Dragon capsule to reach future commercial space stations. Clearly
NewSpace companies can easily demonstrate the benefits their activities bring to
the US economy.
Economic benefits can be also observed in the sub-orbital arena. For example,
two European NewSpace companies developing sub-orbital vehicles like Virgin
Galactic announced the development of LauncherOne for launching microsatellites
to up to 100 kg. Both companies will develop new markets and generate revenues
from sales to institutional and commercial customers. If successful they may be
able to offer competitive prices and bring cost savings to their customers. The
indirect benefits such as technology innovation, publicity and others should also be
carefully taken under account as they have direct impact on the direct benefits. As
already successfully demonstrated by VG, excellent publicity will increase their
customers but also result in indirect benefits like international partnerships with
organizations like NOAA in the context of environment monitoring.

1.14 Conclusions

The chapter has discussed the demand for commercial launch services and intro-
duced space agencies commercial space transportation programmes describing
their role in the evolution of NewSpace markets and future space agencies explo-
ration missions.
NASA COTS programme has been created to meet the need of the agency to
access the ISS, reduce technology development costs and encourage the develop-
ment of a new type of vehicles that will serve both institutional and commercial
customers.
The COTS and CCDev programmes fulfil NASA needs for sending crew and
cargo to ISS and reduce their reliance on Russia for crew/cargo transportation
services. In order to prevent loss of revenues due to the space station retirement,
NewSpace companies should already start securing launch contracts for telecom-
munications, military and Earth observation satellites to be launched on board their
vehicles after 2021 and in this way enter into competition with traditional space
companies.
Both the demand growth for space tourist activities and basic and applied
research can be expected, the latter even overtaking in demand the space tourist
market. In view of the expected retirement of the ISS in 2024, space agencies may
turn to sub-orbital platforms for performing their microgravity experiments.
NewSpace companies may aim to develop this market first due to less stringent
requirements for flying payloads than space tourists. However, they may face
similar challenges in developing these markets as the ISS partners faced in the
20 1 Space Agencies Commercial Space Transportation Programmes

late 1990s, as will be further discussed in Chap. 6. While the potential growth of
microsatellite market using sub-orbital vehicles is still unclear, the expected growth
of 4% of the space tourist market may be sufficient to encourage the sub-orbital
industry development.
The launch success of SpaceX Falcon vehicle and Dragon capsule demonstrated
the potential of the COTS programme. A similar approach as the COTS-like
programme may be discussed in the long-term future for NASA Asteroid mission
to NASAs Innovative Lunar Demonstration Data (ILDD) programmes. The true
success of NASA COTS programme can be established only after the demonstra-
tion of safe, reliable and cost-effective sustainable space transportation capabilities
even after the lifetime of the International Space Station is over. This programme
encourages US NewSpace companies to enter on the international launch markets
and to compete with traditional space companies. NASA Flight Opportunities
programme provides chances for NewSpace sub-orbital companies to build flight
reliability, improve their technology and secure future customers. It also carries the
threat for potentially creating high market entry barriers for new players.
Falcon 9 and New Glenn offer competitive prices not only put under competitive
pressure traditional launch service provide, but put immense pressure on
Arianespace to be able to offer competitive low-cost launch services.
The market potential of commercial lunar markets is unknown and unexplored,
in spite of the fact that the interest in Google Lunar X Price is a positive indicator.
NASA issued a call for proposals in which commercial companies can offer to
NASA relay services to support future Mars missions, including landers and rovers
and, potentially, aerobots and orbiters.
The initiative above opens new business opportunities for NewSpace and tradi-
tional space companies which will bring benefits both to space agencies and
commercial companies.
The market evolution of commercial space transportation services will result in
economic spillovers in other industry sectors, such as information technologies, real
estate, manufacturing and others. The newly created markets will evolve in differ-
ent market structures, certain markets may resemble oligopoly while others monop-
oly, and therefore new entrants may be exposed to various high market entry
barriers. Furthermore, measuring the economic benefits from the NewSpace com-
panies activities will result in attracting institutional and private investments.
Chapter 2
Commercial Space Markets and Stakeholders

2.1 Introduction

This chapter presents and analyses commercial space markets of the past and the
present. The space economy is expected to become a multitrillion dollar industry in
the coming decades. With more than $13 billion (Thomas 2017) being invested in
the last 16 years in space-related start-ups and space companies, the new space age
has become a reality. Their classification and analysis makes possible a selection of
primary future commercial space markets of interest for NewSpace companies.
These are commercial space transportation markets, orbital and suborbital space
tourism, R&D commercial payloads (i.e. instruments, etc.), in-orbit satellite ser-
vicing, in situ resource extraction and space debris prevention. Stakeholders in
NewSpace companies (SpaceX, Blue Origin, XCOR, Armadillo Aerospace, etc.),
service providers (Space Adventures, Virgin Galactic, etc.), space agencies (NASA,
ESA, etc.), federations (Commercial Spaceflight Federation) and targeted cus-
tomers will also be discussed.

2.2 Background

Space applications based on navigation, telecommunication and Earth observation

space systems are essential to the safety of our day-to-day lives. Companies for oil
and rack positioning, disaster management, precision agriculture, meteorology,
environment and communications have offered services of the highest value to
national economies. In the last 15 years, research on board the ISS engaged with
experiments by non-space companies for drug development, osteoporosis, protein
crystallization growth, development of lightweight and nanomaterials and telemed-
icine has demonstrated the successful evolution and existence of ISS commercial
space markets. The nascent stage of development of these markets started in the

Springer-Verlag GmbH Germany 2018 21

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_2
22 2 Commercial Space Markets and Stakeholders

Fig. 2.1 ISS, BEAM module, Dragon and Cygnus capsules docked to the ISS (Credits: NASA)

mid-1990s further discussed in Chap. 3. At that time, first-time markets were

identified, customers were still unknown and profits negative, and space agencies
strongly regulated these commercial space activities. ISS markets entered a growth
stage when early adopters began to invest in placing R&D experiments on board the
ISS. Competition brought about an increase in the numbers of commercial payloads
flown on board the ISS and CubeSats deployment1 by companies like NanoRacks
and markets entered a growth (frenzied) stage of development.
These activities encouraged private investors to put money in the development
of orbital and sub-orbital commercial space transportation cargo and crew vehicles.
All those developments hold promise for the future evolution of commercial space
markets beyond low Earth orbit (LEO), towards in-orbit satellite servicing, space
debris removal and in situ resource exploitation (Fig. 2.1).
The strong optimism of NewSpace stakeholders for the market potential of
commercial space transportation services has been driven by the retirement of the
Space Shuttle in 2011, the launch in 2005 of NASA COTS/CCDev programmes and
the successful launch of the first sub-orbital vehicle in 2004 SpaceShipOne. The
expected retirement of the ISS in 2024 and the necessity to compete with traditional
space companies for entering some of their markets as concluded in Chap. 1 may
lead to numerous challenges which NewSpace companies may face, e.g. the
assumption that the creation of a market is easy, the existence of a strong compe-
tition from terrestrial technologies/solutions, difficulties in attracting venture cap-
ital for technology developments and reliance on a single institutional customer.

1
NanoRacks has installed on board the ISS the so-called NanoRacks CubeSat Deployer (NRCSD)
which is capable of holding six CubeSat units, allowing to launch 1U, 2U, 3U, 4U, 5U and 6U
(2  3 and 1  6) CubeSats. According to the material provided by the company until May 2016,
they have deployed from the ISS more than 100 CubeSats (NanoRacks 2016).
2.2 Background 23

Space agencies may also create programmes similar to the COTS model for
future Lunar and Mars exploration missions or space debris ones, resulting into
NewSpace companies starting to offer services to space agencies. Certain ISS
lessons, learnt by the space agencies when initiating MIR and ISS commercializa-
tion (Tkatchova 2013), could be considered by NewSpace companies when devel-
oping commercial space markets. NewSpace companies may also target R&D
markets (e.g. drug development, osteoporosis, etc.) or the entertainment industry
(e.g. space tourism) similar to the ISS R&D markets. The space start-up markets
will pass through the same phases of the development as the ISS markets.
The new kids in the block entering and creating new space markets and appli-
cations will be experiencing similar processes as the stakeholders faced in the early
days of ISS market evolution (Fig. 2.2). The phases of market evolution as
presented below are a natural for innovative products or services that are introduced
for the first time on a certain market. The space station services/products of the
Russian MIR station and of the early days of ISS commercialization in the mid- and
late 1990s passed through the phases below. Figure 2.2 presents the evolution of the
ISS markets versus space agencies investment in the ISS programme and market
development.
In the early days of ISS commercialization, the biggest challenge to the process
was the assumption that there is a market and its creation is easy as further
discussed in Chap. 3. Customers and markets are unknown and explored. The
diversity of the commercial space markets will pose a challenge to the companies,
as their customers will have different value chains depending on their industries

ISS programme
investment
Nascent Frenzied Turbulent Mature
Introduction Growth Maturity Sustain

Innovation driver increase Market reach Co-operation

New markets created Market expansion Middle majority Customers laggards
Unknown customers Early adopters High profits Profit decline
First time buyers Profits rise Survival of the fittest Consolidation process
Profits negative Regulation relaxed Stable number of competitors Government
Strong government Competition Market/customer reach
withdraw from
regulation Joint Venture formation commercialisation
Unfamiliar markets
to outsider
industries

ISS partners investment

in ISS market
development

ISS markets Time

Fig. 2.2 ISS market evolution vs. ISS programme investment (Tkatchova 2013)
24 2 Commercial Space Markets and Stakeholders

(e.g. pharma, automotive, etc.). In addition, the multidisciplinary scientific research

performed on board the space station has demonstrated the diversity of market
applications and the challenges to tapping into these markets and customers. Often,
service diversification would occur too early for a certain market and customers.
Sometimes future customers would find the development and launch of R&D
experiments too long, not permitting them to quickly introduce the product on the
market, in other words, the time to market will be too long for commercial
customers to wait. Thus, non-space customers may encounter difficulties in under-
standing the benefits of microgravity and the complexity of developing, certifying
and launching R&D payloads to the space station. However, as demonstrated by the
case of protein crystallization2 growth in microgravity in the early days of ISS
commercialization, competition from terrestrial technologies for growth of protein
crystals may hinder its market development in its infancy state. Besides the risks
associated with new market development, they may encounter difficulties emerging
from negative publicity due to tragic accidents. Moreover, the risk of too much
exposure to the budgetary fluctuations of space agencies may force NewSpace
companies to halt the development of their space vehicles (e.g. due to reduced or
fluctuating funding from institutional customers.). They may also be constrained in
the development of self-sustainable markets by reliance on a single government
customer to supply commercial space transportation services.

2.3 Market Segmentation Challenges

Describing and classifying commercial space markets is a difficult task due to the
diverse nature of commercial space transportation services offered by NewSpace
companies. Services range from orbital and sub-orbital crew and cargo transporta-
tion, in situ resource exploitation, 3D printing in microgravity to integrating R&D
payloads on board the space station. The diversity of the R&D research performed
on board the ISS by a wide range of sciences, from material science to biotechnol-
ogy and biological research, adds an additional layer of complexity in classifying
the ISS commercial space markets. NewSpace companies are bound to face not
only technological but also political and business management challenges. Here are
some of them:
Customers and markets are unknown and unexplored.
Diversity of the targeted commercial space marketscustomerswill have
different value chains depending on their industries (pharmaceutical, automo-
tive, mining etc.).

2
In the mid-1990s, it was believed that microgravity environment will contribute to improve
protein crystallization growth. Protein crystallization is the process of growing protein crystals
from a solution (19981999, 1999) and was observed and concluded that space-based protein
crystallization does not replace ground-based research, as it can add time, expense, and question-
able economic motivation.
2.4 Commercial Space Market Overview 25

Disruptive technology and innovation leads to the development of unknown

markets and attracts early adopters as customers.
Lack of clear, direct and indirect benefit definition, methodology and historical
statistical information and market information for the first-time customers.
Some challenges, faced by NewSpace companies, can be mitigated while others
may further evolve.

2.4 Commercial Space Market Overview

Commercial space markets are user-driven markets where demand for space-
based services, products or payloads (e.g. experiments) is met by suppliers that are
either traditional or are NewSpace companies that offer a wide range of services/
products, e.g. from the use of satellite communications to navigation, Earth obser-
vation, launch or other services.
The creation of sustainable NewSpace markets is expected to generate afford-
able services for institutional and commercial customers. The question related to
the creation of self-sustainable markets has been further researched by various
authors, and the following stepping stones have been identified by Pittman
(2015):
1. Frequent, reliable and cheap access to LEO for crew and cargo
2. Vehicles capable of moving payloads and passengers beyond LEO to orbits
around other planetary bodies
3. In-space resource extraction and processing systems to provide materials needed
to support operations in cis-lunar space (CLS)
4. Resource depots in LEO and out in CLS to support asteroid and Mars missions
5. Established, reliable high bandwidth communication and navigation
6. Landers capable of landing people and equipment upon bodies with significant
gravitational fields
The milestones described above show a long-term vision for creating a sustain-
able NewSpace market environment that will also include in-orbit satellite servic-
ing, in situ resource extraction and other capabilities. At present NASA through its
COTS programme (see Chap. 1) has provided the opportunity for companies to
develop launch and transfer vehicles that will offer frequent, reliable and cheap
access to LEO. Nevertheless, once the milestone of frequent and cheap access to
LEO is achieved, as already mentioned in Chap. 1, NASA may implement other
future programmes similar to COTS for Lunar exploration. Considering vision and
the set milestones, the NewSpace markets could be grouped under several domains
for exploration: under interplanetary exploration (e.g. in-space resource extraction,
lunar/asteroid resource exploitation, etc.), orbital exploration (e.g. ISS utilization,
26 2 Commercial Space Markets and Stakeholders

Fig. 2.3 Primary

NewSpace market grouping Interplanetary Exploration

Orbital Exploration

Sub-orbital Exploration

Space Ports

space debris mitigation, in-orbit satellite servicing, etc.), sub-orbital exploration

and commercial spaceports activities (Fig. 2.3).
Currently the LEO exploration market is the most mature due to the increased
ISS utilization and ISS partner programmes that encouraged ISS commercializa-
tion, resulting in the launch of many commercial experiments which have been
performed on board the station during the last 15 years. The rest of the market
segments are emerging, while others just like the sub-orbital market have been
generating very strong publicity and reasonable interest by private investors and the
public since 2004.
NewSpace companies involved in the above-mentioned markets will be
addressing the following questions: what are their targeted markets? What are
their targeted customers? What are the interdependencies between the NewSpace
markets? What is their business case? What are the prime market risks they are
exposed to? How are sub-orbital companies going to attract customers for flying
R&D payloads on board their vehicles? What are the ways in which they will price
their services? These issues will be touched upon in this chapter.
The NewSpace markets above are interrelated. The successful evolution of
commercial space transportation services under the LEO market, for instance,
will contribute to the future growth of interplanetary and commercial spaceports.
Future interdependencies could also be observed between space debris and in-orbit
satellite servicing markets.
The future evolution of NewSpace markets will result in increased interdepen-
dencies between the markets and will permit the possibility to analyse the future
evolution of NewSpace value chain. This evolution may result in transversal
market segments for the primary NewSpace market grouping of interplanetary,
LEO, sub-orbital exploration and spaceports.
2.4 Commercial Space Market Overview 27

R&D Entertainment/ In-orbit satellite Space In situ resource

marketsa space tourism servicing debris extraction
Interplanetary exploration
Lunar    
exploration
Asteroids/   
comets
Mars    
exploration
Orbital exploration
ISS utilization   
LEO/GTO/  b
MEO satellites
Sub-orbital  
exploration
Spaceports   
a
R&D markets also include payloads that are considered technology demonstrators
b
Solar-powered satellites in LEO

These transversal market segments have a different level of market maturity,

for example, the R&D markets for ISS utilization are at a frenzied stage of growth
with increased growth of new companies flying payloads to the ISS. This is a natural
evolution, as various ISS commercialization activities started already in the late
1990s and were encouraged by ISS space agency programmes (see Chap. 6). The
US set-up of the Space Act Agreement, COTS and Flight Opportunities programme
(see Chap. 1) have encouraged the development of safe and cost-effective space
transportation services and have created a regular opportunity to fly R&D payloads
to the ISS. This market is not only growing, but reusable rockets are changing the
paradigm of the launch industry and increasing the competitive pressure on tradi-
tional launcher service providers. Newly emerged services as financial and insur-
ance services are being offered by consulting companies to NewSpace companies.
R&D markets for sub-orbital vehicles have not entered the nascent stage of
development yet and are still considered unfamiliar to potential customers, such as
pharma and biotech companies. In view of the retirement of the ISS in 2024, many
space agencies may turn to use sub-orbital platforms for performing microgravity
experiments. The R&D markets may continue to grow regardless of the retirement
of the ISS in 2024. R&D customers may turn to utilize commercial space stations or
the Russian or Chinese space stations. Over the last 12 years, the dreams and
expectations for growth of the entertainment/space tourism market are about to
come true. The market has not developed yet due to delays in new sub-orbital
vehicle developments and high market uncertainty. Nevertheless, the successful
launch and operations of future sub-orbital vehicles will become a major driver for
its successful evolution and growth.
With more than 1300 satellites orbiting the Earth and with the growing number of
space debris of more than 20,000 catalogued pieces of space junk larger than a softball
28 2 Commercial Space Markets and Stakeholders

orbiting the Earth (NASA, Space Debris and Human Spacecraft 2013), the importance
of providing in-orbit satellite services and space debris markets will evolve rapidly.
In-orbit satellite servicing is about the need to repair and refuel LEO or GEO
satellites in order to extend the lifetime of the satellites and their services. The expected
benefits of future in-orbit satellite service missions will aim at demonstrating the
ability to create new space systems at greatly reduced cost for end users. Technology
demonstration missions for both LEO and GSO satellites are being explored and on
board the ISS are being studied by space agencies. This transversal market segment is
in a nascent stage of market development. In spite of that, the technology success
combined with expected value may result in the introduction of in-orbit satellite
servicing disruptive technology that may quickly evolve in a new commercial market.
Space debris growth has become a concern in recent years since collisions at
orbital velocities can become highly damaging to functioning satellites. The
expected launched of broadband satellite constellations, such as OneWeb 720 sat-
ellites, Boeing 2960 satellites, SpaceX 4000 satellites and Samsung 4600 satellites,
will inevitably result into increase of space debris. As by today in 2017, satellites
are not designed to be repaired.
Moreover, space stations produce even more space debris following the Kessler
syndrome, and the amount of debris and debris impact escalates (Baldesi 2011). The
need to address this concern is rapidly pushing space agencies to find solutions for space
debris avoidance, removal and prevention. Certain space agencies, such as ESA, are
looking at implementing space debris active removal missions that will offer opportu-
nities to European companies to create new services and markets (ESA 2016a, b, c).
Both space debris markets and in-orbit satellite service markets carry the long-
term promise of growth and creation of new services for space debris removal and
mitigation and in-orbit satellite servicing.
In situ resource extraction is a new emerging market and is about mining
asteroids for space resources or the production of rocket propellants derived from
the ice situated on the lunar poles. Certain European countries like Luxembourg even
announced the creation of a legal framework and regulations in the context of future
ownership of minerals extracted in space from Near-Earth Objects (NEOs) such as
asteroids (Resources S. 2016). This creates the opportunity for US-based NewSpace
companies to settle in Europe and create European in situ resource extraction
markets. The technologies and solutions developed for the in situ resource extraction
markets will be of critical importance for future Lunar and Mars missions.
The diversity and interdependence between different markets creates challenges
in describing and mapping the future NewSpace markets.

2.5 Criteria for Classifying Future NewSpace Markets

Some NewSpace markets seem more developed than others which are still in an
emerging state. Identifying promising NewSpace markets will be a complex task
since their growth depends not only on the encouragement of space agencies
programme but also on the technology maturity of their vehicles and the upcoming
2.5 Criteria for Classifying Future NewSpace Markets 29

COMMERCIALIZATION CHASM
Proven HIGH TRL w private industry involvement -
Technology usually technology demonstrations Industry

ld
or
lW
OBJECTIVE: What is the industry-

ea
specific infusion point for microgravity

R
related discoveries?

/
ion
u lat ping
m y
Si otot
University Pr

Lab
Basic
Principles

System/Subsystem Prototype
Analytical or Experimental

Prototype Demonstration
Application Formulated

Qualified in Real World

Component Validation

Component Validation
Observed & Reported

Product Completed &

Technology Concept

Proof of Concept
Basic Principles

Product Proven
In Real World

In Real world
In Simulation

In Simulation
TRL 1

TRL 2

TRL 3

TRL 4

In Lab

TRL 5

TRL 6

TRL 7

TRL 8

TRL 9
Fig. 2.4 ISS R&D market Commercialization Chasm (Rasky 2014)

flight opportunities of space agencies. For example, in the context of the ISS R&D
markets, the potential of microgravity research and accessibility and the successful
ISS operations have resulted in developing the ISS R&D markets and the Com-
mercialization Chasm in the context of NASA TRL (Rasky 2014) (Fig. 2.4).
The high TRL of the technology development is a prerequisite for industry
involvement. However, the earlier involvement of industry players in the technology
development of orbital and sub-orbital space transportation vehicles in the NewSpace
markets is evident. This trend is a result of the successful implementation of the NASA
COTS programme as well as of the need to develop and provide NewSpace services
that meet the requirements of future customers, as is the case of sub-orbital vehicle
developments. Therefore, it is important for future commercial space stations com-
mercial customers to be involved in the early stage (Phase A) of the space experiment
facility design. A comparison with ISS commercialization along this line will show
that NewSpace companies are already involved in the early stage of TRL development
and, parallel with it, in the market identification and fundraising. The diversity and
complexity of NewSpace markets pose a challenge for their classification.
Yet, the following initial criteria for monitoring the evolution of future markets
may be used for classifying them:
30 2 Commercial Space Markets and Stakeholders

Addressing certain gaps market opportunities through introducing a technology

or product/services
Developing a variety of market applications
Attracting customers and funding
The above criteria will be considered when analysing the future evolution of
transversal and NewSpace markets.

2.6 Description of Commercial Space Markets

Commercial space markets are the markets in which NewSpace companies offer
services, solutions and products to customers who pay a certain price for using these
products, services and solutions. NewSpace companies offer interesting solutions
for in situ resource extraction, crew and cargo orbital and sub-orbital transportation,
3D printing in microgravity and CubeSat launches from the ISS. The diversity of
the services and technology solutions developed by NewSpace companies will
result in primary and secondary market sectors and development of new space
applications (Fig. 2.5).

Fig. 2.5 Commercial space markets

2.6 Description of Commercial Space Markets 31

The targeted markets will have increased interdependencies which could result
in the emergence of transversal market segments like the ones referred to as R&D
markets, in-orbit satellite servicing, space debris growth and in situ resource
extraction. Markets evolution could be unpredictable, and certain primary targeted
markets, like space tourism for sub-orbital flights, could become secondary in
priority, while others, like R&D markets, could become primary. The description
of markets, stakeholders and future trends in their market evolution will be dwelt
upon later in this book. With the future evolution of these markets, there will be a
need for further research of the interdependencies between the orbital, sub-orbital
and spaceports segments, the primary and secondary market segments and the
transversal ones. The market features and challenges experienced in certain markets
may transfer or may be even similar to the ones experienced as in the interrelated
markets. For example, certain pharmaceutical companies working on R&D exper-
iments, to be flown on board the ISS, may consider initially testing their experi-
ments on board sub-orbital vehicles.

Fig. 2.6 NASA NewSpace developments (NASA, Emerging Space, The evolving landscape of
21st Century American Spaceflight 2015b)
32 2 Commercial Space Markets and Stakeholders

Table 2.1 NewSpace stakeholders, organizations, markets and services

Stakeholders Organizations Markets Services
Manufactures/ Mars One Mars explora- Mars transportation ser-
operators Inspiration to Mars tion vices
(interplanetary Moon Express Lunar explora- Mining Lunar resources
exploration) Golden Spike tion Lunar space transporta-
B612 Foundation Asteroid tion services
Shackleton Energy exploration Planetary defence
Planetary Resources Rocket propellant/
Deep Space industries refuelling depots
Asteroid mining
Manufactures/ SpaceX, Blue Origin Orbital Orbital launch services
operators Orbital, ULA, Boeing, exploration-ISS Air-launch orbital ser-
(Orbital Bigelow Aerospace, Sierra crewed trans- vices
exploration) Nevada Corporation portation ser- Orbital transfer vehicles
Made in Space vices Inflatable habitats
Stratolaunch Systems, Mars explora- R&D payloads/3D print-
NanoRacks, AlphaSparks tion ing on board the ISS
MDA R&D markets CubeSats launch from the
ISS
Manufactures/ Blue Origin, XCOR, Masten Sub-orbital Sub-orbital launch ser-
operators Space Systems, Virgin exploration, vices
(sub-orbital Galactic, Scaled Compos- entertainment/ Space tourism services
exploration) ites, Booster Industries, space tourism Flying R&D payloads
Reaction Engines, Copenha- R&D markets
gen Suborbital 3D microsatel-
Dassault Aviation lite launch
Vector Space Systems
Service pro- Space Adventures Orbital and Space adventure enter-
viders Zero Gravity sub-orbital tainment services
(Exploration/ Up Aerospace transportation
orbital/subor- Zero2Infinity Financial and
bital/ space Swedish Space Port insurance
debris) Caribbean Spaceport companies
Cosmica airplanes
Customers Space agencies
(interplanetary SATCOM companies
exploration)
Customers Space agencies
(orbital Governments
exploration) Non-space customers
Pharma, biotech, automotive
companies
Customers General public Edutainment
(sub-orbital Non-space customers and educational
exploration)
Federations Commercial Space Federa-
(interplanetary, tion, Inspiration to Mars,
orbital, Citizens in Space
sub-orbital
exploration)
2.8 Conclusions 33

2.7 NewSpace Industry Stakeholders

NewSpace companies will be providing space transportation, R&D payload inte-

gration and manufacturing services to space agencies and private companies. The
majority of NewSpace companies are newcomers, and only in certain cases, there
will be traditional aerospace companies entering the NewSpace arena. The services
NewSpace companies will be providing will be quite diverse, from space station
services to the ISS to launch commercial inflatable modules and build propellant
depots (Fig. 2.6).
The figure above clearly shows the diversity of NewSpace technology develop-
ments and of NASA key technology developments, such as the ISS and Orion
vehicle. The expected services that will be provided cover a diverse spectrum of
solutions, orbital and sub-orbital exploration and spaceports. The early diversifica-
tion of markets and services that NewSpace companies will provide is presented in
Table 2.1.
The stakeholders in the NewSpace markets will have different functions and
markets in the provision of NewSpace services.
The targeted markets and services to be provided by NewSpace companies are
quite diverse. For certain markets linked to interplanetary and sub-orbital explora-
tion at present, one could observe a mismatch between expected market maturity,
technology developments (TRL) and unrealistic expectations for strong customer
interest. Nevertheless, some of these markets may result in disruptive growth and
evolution in the long term due to the necessity to address a certain gap for the
provision of a certain service and achievement of a high technology readiness for
customers.

2.8 Conclusions

NewSpace companies face challenges and complexities similar to the ones space
agencies and companies faced in the early days of ISS commercialization. For
example, the biggest challenge to the process was the assumption that there was a
market and its creation was easy, or future customers could find the development
and launch of R&D experiments too long, which would not permit them to
introduce the product on the market quickly enough, or, in other words, the time
to market may be too long for commercial customers to wait. Thus, non-space
customers may encounter difficulties to understand the benefits of microgravity and
the complexity of developing, certifying and launching R&D payloads to the space
station. Commercial space markets are user-driven, quite dynamic and with a
diverse portfolio of services and different levels of market maturity. They could be
grouped into four groupings: interplanetary, orbital, sub-orbital exploration and
spaceports. The criteria used for the market grouping could be whether a certain
service/solution addresses a certain gap, sufficient technology maturity,
34 2 Commercial Space Markets and Stakeholders

capability to attract customers and funding and the presence of a long-term

strategic need for these services or solutions.
NewSpace companies will face the following questions: What are their targeted
markets and customers? What are the interdependencies between NewSpace mar-
kets? What is their business case? What are the prime market risks to which they are
exposed? How will sub-orbital companies attract customers for flying R&D pay-
loads on board their vehicles? What are the ways in which they will price their
services? With the successful evolution of certain market segments and increased
interdependencies between markets, transversal markets segments will emerge.
These market segments will be R&D markets, entertainment/space tourism,
in-orbit satellite servicing, space debris and in situ resource extraction. Market
evolution could be unpredictable, and certain primary targeted markets, like space
tourism for sub-orbital flights, could become secondary in priority, while others like
R&D markets could become primary.
Chapter 3
Commercialization Lessons

3.1 Introduction

The pioneering nature of commercial space market creation, new technology

development, high strategic and market risks and strong safety regulations will
results in NewSpace companies facing similar problems as the ones faced by space
companies in the 1980s and the 1990s. For example, in the 1980s companies like
Space Industries Inc. (SII) proposed the creation of a commercial space station
(i.e. Industrial Space Facility (ISF)) for the production of space materials in
microgravity or in the mid-1990s the MIR commercialization attempts of the
Russian and the early attempts of space agencies to commercialize the ISS. The
lessons presented refer to difficulties in the creation of new markets, negative
profits and strong government regulation.
The idea behind this chapter is to learn from history and raise awareness of the
future challenges NewSpace companies will face in their activities.

3.2 Background

Commercialization of space technology started initially with ideas for the commer-
cialization of the Space Shuttle in the early 1980s, followed by the launch of
commercial projects under the Russian MIR space station programme and the
set-up of ISS commercialization programmes in the late 1990s.
Space agencies had different reasons to initiate space technology commercial-
ization. NASA was driven by the opportunity to make cost savings, due to cheaper
spacecraft hardware production, and boost the creation of a competitive space
industry with new actors offering commercial space transportation services
(SpaceX, Bigelow, etc.) and modules (Spacehab). Roscosmos was driven by the

Springer-Verlag GmbH Germany 2018 35

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_3
36 3 Commercialization Lessons

need for cost recovery in order to keep the MIR operational, with annual operating
costs of around $240 million per year.
In addition to the Space Shuttle, MIR and ISS commercialization lessons, there
are also several lessons to be learnt also from the activities taking place in the
emerging sub-orbital space industry.

Interplanetary Exploration

Orbital Exploration

Sub-orbital Exploration

Space Ports

The lessons learnt from space station commercialization and by sub-orbital

companies will provide valuable recommendations for NewSpace companies that
are developing projects for in-orbit satellite servicing, in situ resource exploration,
sub-orbital vehicles and operating commercial spaceports.

3.3 Space Shuttle Commercialization

The Space Shuttle, launched in the early 1980s, was conceived and developed as a
reusable vehicle for servicing and repairing satellites and performing experiments
in low Earth orbit (LEO). Five Space Shuttles were built and used not only for
microgravity experiments but also for performing in-orbit satellite servicing mis-
sions and for constructing the ISS. The Space Shuttle had a bay where satellites
could be positioned and repaired by its robotic arm. Today, without the Space
Shuttle, we would not have discovered new galaxies and seen the amazing images
made from the Hubble space telescope. When the Hubble telescope was launched, it
turned out that there were major problems with the Hubble mirror that needed to be
resolved by in-orbit repair of the corrective optics. The first mission in 1993
(STS-61) demonstrated the importance of in-orbit satellite servicing, followed by
four servicing missions STS-82, STS-103, STS-109 and STS-125. The in-orbit
satellite servicing of the Hubble demonstrated capabilities, although it would have
3.3 Space Shuttle Commercialization 37

Fig. 3.1 Space Shuttle Atlantis STS-117 (Credits: NASA)

been cheaper1 to launch a new Hubble telescope than rather service it. In 2016
satellites are not being constructed to be serviced. In the long-term future, private
companies may start exploring the possibility of performing in-orbit satellite servic-
ing for space agencies, science or Earth observation missions and commercial
satellite operator missions (Fig. 3.1).
Space Shuttle commercialization has always been related to the activities of the
Spacehab module, which used to be a commercial module positioned in the Space
Shuttle cargo bay, offering 28.3 cubic meters of expanded space for experiments.
Spacehab flew on STS-96, STS-101 and STS-106 and could host 61 mid-deck
lockers. During the first flight of Spacehab, the prime customer for its services was
NASA. In the early 1990s, the company managed to sign an agreement with NASA
for USD184 million and managed to raise up to USD200 million for its activities.
However, it spent USD150 million on the design and the manufacturing of two
Spacehab modules that would fly on the Shuttle. An independent cost analysis
demonstrated that if NASA was going to design and manufacture these two
modules, the cost would be in the range of USD1.2 billion (Fig. 3.2).
The analysis showed that private companies should have a good understanding
of their customers needs if they wanted to design and manufacture space

1
With a cost around $1 billion per Shuttle mission.
38 3 Commercialization Lessons

Fig. 3.2 Spacehab module (Credits: NASA)

technology at more cost-effective prices. Spacehab did not manage to leverage on

its partnership with NASA and sign a contract with NASA on commercial terms.
Rather NASA decided to pay a cost-plus contract. In addition Spacehab did not
generate any commercial demand for their mid-deck lockers and relied primarily on
NASA as a customer. One of the lessons learnt from the Spacehab case study is that
full reliance on a single governmental customer with strong purchasing power and
the capacity to define contractual conditions is not beneficial. Therefore, NewSpace
companies that aim at building future commercial inflatable modules (Bigelow) or
construct commercial ones like the Axiom should be aware of the hidden strategic
risks of having a single governmental customer. They will have to ask themselves
what are the targeted markets and customers. How can an idea be transformed into a
business? How can a company be able to diversify its services? How to avoid
reliance on a single governmental customer?

3.4 Space Station Commercialization Lessons

3.4.1 Industrial Space Facility

The idea behind the Industrial Space Facility was to have a small microgravity
platform that would host up to 31 payload racks. The ISF will be an unmanned
facility, will be serviced by the Space Shuttle and will be positioned in a lower earth
orbit of 300 km and with Space Shuttle docking capability. The operational costs
for the ISF would be carried by private companies, and it is considered by NASA as
complementary to the ISS and the Shuttle programme. In the late 1980s, the
3.4 Space Station Commercialization Lessons 39

company proposing the ISF did not manage to attract enough private customers to
fly their experiments on board the ISF and tried to get a lease agreement with
NASA. The leasing agreement would have cost around $140 million over 5 years
for 70% of the first ISFs payload space. The idea was to enable the company to
raise around $250 million from the private sector for building the ISF hardware
(Astronautix, Industrial Space Facility). However, the actual lease was subject to
availability of future funding.
With difficulties to attract private companies to fly their payloads on board the
ISF, NASA became the prime customer of the ISF. In the face of the Space Shuttle
rising costs and the expected leasing costs of $700 million, fears arose in many
representatives of the space science subcommittee that the NASA budget will
increase. The cost of the lease would almost equal NASAs investment in micro-
gravity research for the same period. For NASA the cost would have been quite
high, due to the fact that the ISF did not attract enough private payloads to be flown
on board the ISF and it turned out that NASA would be its prime customer.
In addition, Spacehab complained that NASA will use the ISF facility rather than
their platform. NASAs costs for Spacehab were less, as it will pay $28 million for
each six flights including transportation costs (Universe) and would also lease up to
50 payloads on the Space Shuttle. However, the ISF would have enabled long-term
microgravity experiments, while Spacehab could only support experiments for a
few weeks during a Shuttle flight (Fig. 3.3).
The market for microgravity experiments financed by private companies was too
small to attract a sufficient number of commercial payloads to be flown on the ISF.
The cost impact on NASA budget, as the sole customer for both the ISF and
Spacehab, in combination with ISS programme commitment and Space Shuttle
costs was too high.

Fig. 3.3 Industrial Space Facility (Credits: NASA via Marcus Lindroos)
40 3 Commercialization Lessons

The ISF was exposed to too many risks of political, budgetary and market nature,
considering its early arrival on the market for microgravity research and the
reliance on a single governmental customer. The ISF facility could have been
initially the platform for flying R&D experiments of pharmaceutical, biotechnology
or medical devices companies. The successful development of the ISF could have
been a test platform for full ISS utilization and earlier R&D ISS market develop-
ment. In 2001 it could realistically permit the ISS partners the opportunity to
actually attract mature R&D customers to fly microgravity payloads on board the
ISS. Furthermore, with the expected retirement of the ISS in 2024, it was possible
that NASA can revive the idea for an ISF in LEO and private companies may
design, construct and operate similar to the ISF facility. NASA may even set up a
programme similar to NASA COTS and Lunar Catalyst programmes. The major
lesson to be learnt from the ISF experience is that they did not manage to clearly
define their unique selling point and failed to attract a sufficient commercial
customer base in order to become an attractive concept for NASA.

3.4.2 MIR Space Station

When the MIR station was launched in 1986 by the Russians, it became not only a
symbol of Soviet space engineering but also of international cooperation under the
Interkosmos programme. During its lifetime it hosted more than 104 cosmonauts/
astronauts from 15 countries and offered opportunities to countries like Bulgaria,
Hungary, Cuba and Poland to fly their own experiments on board the station.
In the early 1990s, most ex-communist countries from Central and Eastern
Europe woke up overnight in the new world of new democratization processes or
the so called world of free market economy. Centralized economies came to an
end. The economic changes lead to radical industrial restructuring, high unemploy-
ment and national currency inflation. The inevitable transition to free market
economies lead to the abrupt shrinking of space industry activities in many
ex-communist countries. Russia woke up with a space laboratory in orbit, and the
MIR annual operating cost running between $220 million and $240 million
(Astronautix 1997). For its 15-year-long lifetime, the total cost of operations of
the MIR space station amounted to between $3.3 billion and $3.6 billion. Clearly,
finding funding for the MIR annual operating costs in an economy of transition
became mission impossible for the Russian government.
Drastically reduced space budgets, economic stagnation, high inflation of the
national currency, low interest to work in the space industry combined with low
salaries and high MIR operational costs forced the Russian space officials to initiate
commercialization of space technologies.
Overnight the Russians had to become pioneers in the commercialization of
space technology, to quickly identify new markets and to quickly attract customers
for space entertainment projects. The MIR station became the first to host for 6 days
the Japanese journalist Toyohiro Akiyama, thus demonstrating for the first time the
3.4 Space Station Commercialization Lessons 41

market potential of space tourism. Other entertainment projects included placing

the Pizza Hut logo on a Proton launcher for the price of $1 million and even sending
pizzas to the Russian segment of the ISS. The lack of a space agency commercial-
ization programme turned out to be an opportunity, as it gave Russian space
officials the freedom to exploit different ideas to attract customers. Russian space
officials were to partner with private entities for attracting financing to keep their
MIR space laboratory operational (Fig. 3.4).
The following lessons from the MIR commercialization were drawn by the
Russian official Anfimov (2001):
Creation of a user-friendly environment for customers
Minimal period of time from users proposal to project implementation
Simple and clear processes for proposal review and selection
Transparent pricing policy
Provision of confidentially rights and IPR rights for commercial projects
During this period emerged MIRCorp, a company created by a partnership
between the Russian RSC Energia and American entrepreneurs. The prime mission
of the company was to attract commercial customers and projects using the MIR
space station as a commercial platform. It was the first company to sign an

Fig. 3.4 MIR space station (Credits: NASA)

42 3 Commercialization Lessons

agreement for leasing a commercial space station, to attract private funds to finance
the launch of the Soyuz TM-30 on the 4th of April 2000 with two cosmonauts on
board, Sergei Zalyotin and Alexandr Kaleri. Their mission marked an important
milestone in spaceflight by being not only the first one to be financed by private
funds but also by reviving the dormant MIR space station. MIRCorp managed to get
involved with NBC for the set-up of a reality show called Destination MIR and
also signed up the first commercial space tourist Dennis Tito who flew on board
the ISS.
As pioneers and creators of a number of exciting projects, MIRCorp took by
surprise space agencies by initiating a business model based on a well-defined
unique selling proposition, backed by private capital and governmental provision of
a space laboratory. But its glory did not last long as the ISS partners put political
pressure on the Russian space agency to de-orbit the MIR space station, in order
that the Russians meet their ISS commitments without delays. MIR could have been
considered by certain ISS partners as a potential threat to ISS utilization, as
non-space companies could initially have flown their payloads to MIR rather than
to the ISS. MIR Corp flew Denis Tito on the ISS, but after the MIR de-orbiting the
company reduced its activities.
The knowledge and historical competence generated during this period helped
the CEO Jeffrey Manber to create in 2008 the NanoRacks, a company famous for
deploying CubeSats from the space station by providing low-cost and standard
hardware for payload integration. NanoRacks realized that the ISS is underutilized
and that they could integrate several cubeLabs in a mid-deck locker (MDL). They
signed with NASA a SAA agreement and focused on offering their customer rapid
delivery of their payloads to the ISS. In a similar way as in the case of MIRCorp,
they became pioneers in the domain of the launch of small payloads integration and
took NASA by surprise.
Some MIR commercialization projects were successful, others just stayed as
feasibility studies. For example, in 1997, Boeing showed an interest in creating a
venture for offering integration, launch and operations services for external exper-
iments on Spektr. The idea was that the project should eventually market test
service provision for ISS. Boeing had approached between 75 and 100 companies
to study (Studies 1997) their interest to use their payload integration services for
external payload integration at a price of $7 million and lead time into space of
1215 months. The market study found some interesting conclusions: for example,
that the price of $7 million is too high and customers are ready to pay around $35
million, that customers require short-lead times of 7 to 8 months maximum and that
proprietary customer information is perceived as being at risk on a MIR mission.
The conclusions show clearly that 20 years earlier certain space agencies and
companies already knew of the challenges facing the commercial projects on
board space stations experience. The question could be asked whether the ISS
3.4 Space Station Commercialization Lessons 43

partners were aware of these results at the time of setting their ISS commercializa-
tion policies around 2000. ESA conducted a number of studies to gather user
feedback before setting up its ISS commercialization policies, and the results of
these studies came to a similar conclusion: there was no understanding of the
benefits which microgravity research could bring to their pharma or biotechnology
experiments. Another conclusion from these studies was that non-space R&D
customers wanted much shorter time to market lead times for designing, devel-
oping and flying their payloads to the space station.
It is likely that the services provided by NewSpace companies will have high
prices at first, before the markets have developed and generated economies of scale.
Furthermore, NewSpace companies should be able to quickly integrate the R&D
payloads; companies providing payload design and integration should be able to
develop these payloads in short lead times, probably within less than a year, and be
in a position to provide guarantees to companies to protect their IPR rights. Clearly
the success of a company like NanoRacks demonstrates the critical importance of
short lead times for the development and integration of payloads on board the
station and competitive cost-effective prices.
This is the case of Spacehab that designed and manufactured two Spacehab
modules to fly on the Shuttle for a price of $150 million, rather than for the $1.2
billion if NASA were to design and manufacture them. Or the example with Falcon
9, of which NASA produced a study of the cost assessment and proposed two cases:
the development of Falcon 9 under traditional NASA environment and the
second one, developed in a commercial environment. The study2 demonstrated
that the Falcon 9 would cost $3.9 billion based on NASA environment and around
$1.6 billion in a commercial environment (Policy 2011).
The attempts to commercialize MIR encouraged the ISS partners to think about
setting commercialization policies, defining ISS services and prices and creating
customer-friendly conditions.
MIR commercialization achieved many firsts like tapping into the unknown
markets of space-based advertising and space tourism, attracting considerable
private capital for launching two cosmonauts to the station and attracting the first
space tourist.
MIR commercialization demonstrated how national space agencies and indus-
tries should behave in case of drastic political changes that lead to insufficient space
budgets. The processes that took place in Central and Eastern European countries
demonstrated to space agencies the need of building up contingency plans to save
space budgets. It also demonstrated the critical importance of defining the direct
and indirect benefits from space-based projects and experiments on board space
stations. Since space stations are multidisciplinary laboratories and attracting first
time customers for performing early R&D is quite difficult, space agencies owning
modules from the space laboratories could set up commercialization programmes
not only for encouraging the development of a competitive space transportation

2
The study used the NASA NAFCOM model to perform the cost estimate simulation.
44 3 Commercialization Lessons

industry but also for sharing costs with industry in order to achieve considerable
savings.
MIR commercialization has established the basis for initiating ISS commercial-
ization, thus demonstrating the importance of changing the paradigm by involving
both the public and private stakeholders. Fifteen years later this process seems to
have brought many opportunities to non-space companies for performing R&D
research in microgravity and performing a number of experiments.
The question that arises is whether NewSpace companies will learn in the
lessons learnt from MIR and ISS commercialization. Can commercial utilization
be successful if government programmes alone provide the incentive for non-space
companies to fly their own experiments on board commercial space stations?

3.4.3 ISS Station Commercialization

MIR commercialization activities created an excitement among the space commu-

nity about the potential of flying non-space R&D payloads to the space station, such
as using the station for new drug development and testing osteoporosis medical
devices and others. The hype of the flight of the first space tourist on board the ISS
in 2001 also showed how promising space tourist market could be. Space agencies
foresaw an opportunity for partial cost recovery of the their costs for ISS operation
and the possibility to attract commercial stakeholders to the ISS programme. The
ISS partners even set up commercialization objectives and policies that were to
encourage the creation of new markets, achieve partial cost recovery, reduce ISS
ground segment operations and enhance national space industry competitiveness.
Once the ISS partners decided to commercialize the ISS, they decided to allocate a
percentage of their on board ISS resources3 for industry-based projects, and they set
up commercialization policies and defined their ISS products and services
(Table 3.1).
Research on board the ISS can contribute to finding new ways of preventing
bone loss and therapies for increasing bone density thus advancing medical sci-
ences. Successful technology demonstration on board the ISS was performed with
the launch of a new generation of energy saving lamps (i.e. high-intensity discharge
(HID) lamps). Another interesting project was the launch of the Mediet food tray
consisting of Italian cheese and packaged dry tomatoes using a new high-pressure
processing technology that eliminates bacteria but keeps the properties of the
fresh food.
The above activities encouraged the companies to fly on board the European ISS
Columbus module a new generation of osteoporosis medical devices for scanning
bone structure (i.e. OSTEO facility) and another one of a small fish for investigating

3
ISS resources include facilities and services, such as the Fluid Science Laboratory (FSL), the
Material Science Laboratory (MSL), Biolab or the European Drawer Rack (EDR).
3.4 Space Station Commercialization Lessons 45

Table 3.1 ISS partners commercialization initiatives

Commercialization policies and strategies
ISS products and services definition
ISS prices proposal
Creation of user-friendly conditions for
encouraging commercialization (e.g. ESA
reduced the internal process for selecting and
qualifyinga the commercial projects to
6 months).
Provision of technical proposal preparation
support to commercial customers in the devel-
opment and design of their commercial
projects
a
Commercial projects, flown on board the ISS, include payloads that need to be tested and
qualified for payload safety to ensure that they can withstand the launch itself and that the payloads
are safe for the crew and systems on board
Contract company performance of market
analyses of the targeted ISS R&D markets
(e.g. in the early days of commercialization,
ESA had requested research institutes and
companies to perform market analyses for the
biotechnology, nutrition and health sectors)
Commercial projects right to IPR and mar-
keting rights
ISS partners setting up of partnerships with
non-space companies (i.e. such as ESA com-
mercial agent)
ISS price promotions for commercial projects,
e.g. for ESA member state projects
Certain space agencies like ESA supported
commercial customers in the preparation of
their experiments to be flown to the ISS

osteoprotegerin activity.4 Osteoporosis is a disease with which astronauts are

familiar, as they experience accelerated bone loss in microgravity of between
1 and 2% of bone density per month. Other more recent examples are the Amgen
product called Prolia for increasing bone mass for men at high risk of fracture. This
medication was developed based on testing the effectiveness of the medication
denosumab on mice in microgravity (Smith). The detailed overview of micrograv-
ity ISS markets can be seen in Chap. 5.
In the late 1990s, the ISS markets were still at a nascent stage of development,
and space agencies were still investigating the best ways to attract commercial
customers to fly their experiments on board the ISS. The ISS partners even
undertook a common approach to harmonize their commercialization policies and
pricing services and create a unified ISS brand. The early days of ISS commercial-
ization brought a number of challenges for space agencies, e.g. unclear R&D
markets, difficulties to attract commercial customers and fear from the traditional
space research community that ISS commercial utilization will take their on board
resources.
Political and market challenges were accompanying the early days of ISS
commercialization. Private companies willing to attract customers to fly their
non-space experiments on board the space station faced tough times as non-space

4
Osteoprotegerin activity on animals and humans is regulated by gravity.
46 3 Commercialization Lessons

companies were asking questions concerning the added value of microgravity

research, the lead time for developing and flying experiments and reaching the
market and the justification of investments in microgravity research and the amount
of investment returns.
Other questions asked by non-space companies were as follows: are there more
cost-effective ground-based R&D solutions, how will companies secure long term
financing for developing and flying their experiments to the ISS, what services and
products will be needed in order to fly a particular payload, what prices should be
paid and how will the launch cost be recovered, what is the frequency of guaranteed
access to the ISS, who will pay for the respective payload in case of failure, and how
will the initial investment be recovered?
In the face of fears of budgetary reductions, political pressures to achieve cost
recovery and apprehensions in the STEM community that commercial payloads
will overtake their flight opportunities, space agencies procured a number of studies
analysing the potential benefits, opportunities, stakeholders roles and markets.
Some earlier studies made in the late 1990s clearly identified a number of chal-
lenges (Beggs 1997) such as non-addressable business risks, high launch and
operating costs, poor flight frequency and schedule reliability, low
budget allocation for commercialization, procurement and procedural inflexibil-
ities. The study made some relevant recommendations regarding NASAs role:
1. To develop commercialization goals to shift its infrastructure to private
partnerships
2. To provide advice to commercial ventures
3. To formulate plans, strategies and policies to achieve commercialization goals
At present, almost 20 years later, NASA follows these recommendations and
encourages the creation of cargo and crew space transportation services.
NewSpace companies will have to create new markets while at the same time
pay attention to competition from terrestrial technologies, e.g. the case of protein
crystallization when the laboratory growth of crystals turned out to be cheaper on
ground than in microgravity.

3.5 Conclusions

One of the lessons learnt from the Spacehab case study was that full reliance on one
governmental customer gives power to define contractual conditions. Therefore,
NewSpace companies that aim at building future commercial inflatable modules
(Bigelow) or at constructing commercial ones, like the Axiom , should be aware of
the hidden strategic risk of having a single prime governmental customer with
strong purchasing power. They will have to identify targeted markets and aim at
diversifying their customer base in order to avoid dependency on a single prime
governmental customer.
3.5 Conclusions 47

The lessons learnt from space station commercialization under orbital explora-
tion and from the sub-orbital industry will provide valuable recommendations for
NewSpace companies that are developing projects for in situ resource exploration,
sub-orbital vehicles and operating commercial spaceports.
Major conclusions can be drawn from the ISF experience that they failed to
define their unique selling point clearly as well as to attract a sufficient commercial
customer base in order to become an attractive concept for NASA.
The ISF facility could have been initially the platform for flying R&D experi-
ments of pharmaceutical, biotechnology or medical devices companies. Its success-
ful development could have been a test platform for full ISS utilization and earlier
R&D ISS market development. Realistically permitting the ISS partners in 2001 to
actually attract mature R&D customers to fly microgravity payloads on board
the ISS.
In all, MIR commercialization has set up the basis for initiating ISS commer-
cialization and demonstrated for the first time in the history that new market
opportunities could be created and exploited in the context of space station
commercialization.
The following questions arise: can the combined MIR and ISS commercializa-
tion experience offer lessons to NewSpace companies regarding the long-term
commercial utilization of future space stations? Is it only government programmes
that will provide incentives to non-space companies to fly their own experiments on
board commercial space stations that can ensure the success of the commercial
utilization?
Space agencies procured a number of studies analysing the potential benefits,
opportunities, stakeholders roles and markets. Certain studies made a number of
recommendations regarding NASAs role: to develop commercialization goals, to
shift NASA infrastructure to private partnership and to provide advice to commer-
cial venture and formulate plans, strategies and policies for the achievement of
commercialization goals.
In summary in the mid-1980s and 1990s, the demand from commercial cus-
tomers to fly microgravity experiments was very low and insufficient to justify the
existence of both the ISF and Spacehab modules. Nevertheless, the successful
attempts of the Russians to commercialize MIR demonstrated the commercial
opportunities for space advertising and promotion campaigns. Today, almost
20 years after the first ISS commercialization activities, the microgravity R&D
markets are developing successfully, and private companies like NanoRacks are
integrating R&D experiments on board the ISS, while companies like SpaceX are
providing commercial cargo transportation services to the ISS. The above attests to
the successful evolution of NewSpace companies activities. In todays environ-
ment, space agencies are expanding their role in encouraging commercialization
activities for the successful emergence of a NewSpace industry and partnering with
NewSpace companies for the successful evolution of a NewSpace industry.
Chapter 4
Interplanetary Settlement and In Situ
Exploration

4.1 Introduction

Since the last Apollo 17 mission in 1972, interplanetary human spaceflight has been
on hold due to various political and budgetary reasons. Even at the time of Apollo, it
was a struggle to justify the direct financial return on investment, and politicians
were unable to sustain the lunar exploration missions. Nevertheless, the global
impact of the Apollo missions has never been forgotten. Many questions are asked
today in this connection: Why has humanity not returned to the Moon? Why has a
permanent human outpost not been constructed on the Moon? How can NewSpace
companies contribute to taking humans to the Moon? Why has humanity waited for
so long to exploit resources on the Moon and on asteroids or other near-Earth
objects (NEO)? More questions sprang up in connection with Mars research: Is a
future human spaceflight to Mars feasible? How can private initiatives and existing
commercial space transportation vehicles contribute to Moon and Mars settlement
bases? What are the economic benefits from exploiting in situ space-based
resources?
Interplanetary exploration is about long-term Moon and Mars human spaceflight
missions and in situ resource exploitation from the Moon or NEO. Asteroids could
contain iron, cobalt, manganese, nickel, aluminium and titanium, while lunar water
ice could be extracted and broken into oxygen and hydrogen for rocket propellant
(Energy 2016). The extracted iridium, silver, osmium, palladium, rhenium, rho-
dium, ruthenium and tungsten from the asteroids may be used for potential transport
back to Earth (Government 2016). In situ resource utilization will involve any
hardware or operation1 that harnesses and utilizes in situ resources to create
products and services for robotic and human exploration (Sanders 2016).

1
ISRU operations will include activities like resources assessment, resources acquisition, resource
processing, in situ manufacturing, in situ construction and in situ energy.

Springer-Verlag GmbH Germany 2018 49

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_4
50 4 Interplanetary Settlement and In Situ Exploration

The further growth of interplanetary exploration and in situ resource exploitation

will create conditions for the development of robotics which, in turn, will boost not
only the expansion of orbit satellite servicing and robotic capabilities but also
experiments in artificial intelligence for space robotics that will be used for explo-
ration and in situ resource extraction. Robotics space exploration will probably
become the major workforce in situ resource exploitation.

4.2 Stakeholders

Lunar, Mars and in situ resource exploration will attract a wide community of
visionaries and entrepreneurs in the nearby future. National governments will set up
national space programmes and develop legal and regulatory frameworks to
encourage lunar and in situ exploration. NewSpace companies, like Planetary
Resources, Deep Space Industries like Shackleton Energy Company and Moon
Express will be attracted, initially acting as manufacturers/operators. Traditional
space companies may begin offering products and space engineering services to the
companies, involved in setting up initiatives like Mars One (Fig. 4.1).
In this new paradigm, space agencies could become prime customers for the
services provided by NewSpace companies, while traditional and NewSpace com-
panies can cooperate and compete at the same time (Table 4.1).
There are governments that may be interested in encouraging and supporting in
situ space resource exploration in a similar way as in the USA, namely, by setting
up legal and regulatory conditions to attract NewSpace companies to perform their
activities. However, without initial seed funding and governmental programmes to
invest in development and maturing of the technology solutions necessary for in
situ resource exploitation, many of these concepts may remain just on paper. In
order to set up these programmes, national governments will need clearly to assess
4.3 Interplanetary Settlement 51

Fig. 4.1 Stakeholders interplanetary exploration

the direct and indirect benefits from in situ space resource exploitation. Research
programmes should also be established to support NewSpace companies to deal
with the challenge of developing new markets and at the same time to invest in
launching vehicle development.

4.3 Interplanetary Settlement

Public debates about initiatives, like Mars One, Google Lunar X Prize and SpaceX
vision for a Mars Colonial Transporter, have initiated a real debate about the
importance of interplanetary exploration. The Mars One vision for setting up a
one-way mission to Mars, with astronaut selection and preparations in a simulated
Mars base to be broadcasted worldwide to be viewed by the public, has triggered
worldwide publicity and discussion (Tkatchova 2012) (Fig. 4.2).
The Mars One mission will be realized in different phases starting with crew
selection, demo comsat and rover launch, followed by cargo missions before the
crew launch. The strong publicity the mission received globally has demonstrated
52 4 Interplanetary Settlement and In Situ Exploration

Table 4.1 Interplanetary exploration stakeholders

Stakeholders Organizations Markets Services
Manufactures/operators Mars One Mars explora- Mars transportation ser-
(Interplanetary exploration) Inspiration to tion vices
Mars Lunar explora- Mining lunar resources
Moon Express tion Lunar space transportation
Golden Spike Asteroid explo- services
Planetary ration Planetary defence
Resources Mars Rocket propellant/
Deep Space exploration refuelling depots
Industries Asteroid mining
Shackleton Lunar 3D printing
Energy Com-
pany
Made in Space
Arkyd Space
Astrobotic
Masten Space
Service providers Space Adven- Space tourism Space adventure entertain-
(Exploration/orbital/sub- tures ment services
orbital) B612 Founda-
tion
ZeroGravity
Up Aerospace
Zero2Infinity
Customers Space agencies Satellite repair Offering propellants for
(Interplanetary exploration) SATCOM and refuelling refuelling satellites
companies Metals for building infra-
R&D compa- structure
nies Offering rare platinum
Pharma, Bio- group of metals
tech
Non-space
Customers
Traditional space companies Airbus Providing space engineer-
Lockheed Mar- ing products and services
tin
SSTL

keen interest all over the world as well as the need for interplanetary exploration.
Mars One claims to have received around 202,586 applicants, from whom to select
50 women and 50 men to participate in the first crew to Mars (MarsOne 2015).
Many consider the mission initiative as the only viable way to reach Mars. Mars
One raises a question concerning the role of commercial exploration missions in the
global exploration roadmap of space agencies. It has also demonstrated the poten-
tial for gaining public attention, by bringing together the dream for interplanetary
4.4 In Situ and Planetary Resource Exploitation 53

Fig. 4.2 Mars One 2025 operational outpost (Credits: MarsOne)

space exploration and commercial objectives for private venture capital2 raised for
space exploration.
Elon Musks vision for a completely new architecture of a future Mars mission
has also attracted public attention. Long-term Mars missions could be the potential
way for creating a self-sustainable market for the Falcon Heavy launcher. Private
space companies may have various visions for future long-term space exploration
that are driven by the need for long-term sustainability of their emerging commer-
cial space transportation markets. The retirement of the ISS in 2024 may endanger
the sustainability of the present commercial space transportation markets. There-
fore, the work to promote interplanetary space exploration missions may become a
long-term roadmap to be pursued by NewSpace companies.
Politicians will be reluctant to invest in future Mars space missions due to fears
of the high costs of these missions and of the difficulties to present direct short-term
benefits from future Mars missions. Therefore, private companies involved in
developing and promoting future Mars missions will have to fully rely on private
financing and to develop sound business cases in order to attract long-term
financing.

4.4 In Situ and Planetary Resource Exploitation

Interesting developments are taking place in the institutional aspect. The utilization
of in situ resources for creating new products or services may even lead to the
increased importance of 3D printing for future human missions for Moon or Mars
missions. Certain near-Earth objects (NEO) contain precious metals like platinum,
palladium and rhodium, which are rare and costly on Earth but are used in

2
On December 12, 2016, Mars One announced that it secured an investment of 6 million euros
from a Hong Kong investment fund and is trading publicly its stocks at the Frankfurt stock
exchange (MarsOne, Mars One now trades publicly and closes 6 million euros funding 2016b).
54 4 Interplanetary Settlement and In Situ Exploration

Fig. 4.3 Asteroid exploitation (Government 2016)

electronics (Liesebeth Beneder 2016). Metals such as iron and zinc from asteroids
could be transferred to Earth or be potentially used for space station construction.
In the last 2 years, two countries, the USA and Luxembourg, became famous for
the efforts to set legal frameworks which offer opportunities to private companies to
exploit space-based resources from other celestial bodies. The USA first approved
the space mining bill, referred to as the Space Resource Exploration and Utilization
Act of 2015. Basically, it encourages the commercial exploitation of space-based
resources, permits the development of economically viable industries dealing
with space resource exploitation and promotes US companies (Space Resource
Exploration and Utilization Act of 2015, 2015).
The Luxembourg government has set up public initiatives for creating legal
frameworks to protect their rights to resources they extract i.e. resources from
4.5 Lunar Exploration 55

asteroids (Government 2016). This marks a new era in commercial space explo-
ration (Fig. 4.3).
Besides legal frameworks, Luxembourgs strong interest is demonstrated also by
the signing of a memorandum of understanding for cooperation together with the
banking institution Societe Nationale de Credit et dInvestissement (SNCI) and
the Silicon Valley-based asteroid mining company Deep Space Industries (DSI) for
cooperation in the context of exploration, use and commercialization of resources
from near-Earth objects (NEO), such as asteroids.
The national R&D space programme LuxImpulse will co-fund R&D projects
and use financing instruments from the SCNCI (Cluster 2016). There is even an
idea for Deep Space Industries to build a CubeSat mission called Prospector-X,
which will have cameras on board to observe asteroids that pass nearby Earth.
This initiative is expected to bring twofold benefits. On the one hand, it will
attract private US-based NewSpace companies like Planetary Resources, Deep
Space Industries, Shackleton Energy Company and many others. On the other
hand, it will encourage the transfer of space engineering knowledge and develop-
ment of national engineering competencies in CubeSat mission development. These
are competencies which will later permit Luxembourg not only to build their own
CubeSats but also be an active contributor to ESA Small Mission Initiatives.
Clearly the Luxembourg initiative could be considered a well-thought national
policy to attract US NewSpace companies to spin in their knowledge into future
European space missions. At the same time, Lux companies will be learning from
the US companies how to design, construct and test small spacecraft like the
Prospector-X telescope one.
Nevertheless, companies involved in ISRU projects will need to have viable
business cases with targeted end-users.
Companies involved in asteroid mining may look at the profits of terrestrial
mining. The terrestrial mining industrys annual growth rate of 8.5% (NASA
2014b) may seem attractive to NewSpace companies, but will they be able to pull
private infrastructure financing and generate sufficient profit to achieve return of
investment? Will they be able to have sustainable business models that will support
them in their activities? In the long run, will they be able to generate similar growth
rates as in the terrestrial industry? How far would the price of rare metals drop if the
market is flooded with cheap material from asteroids? Would the resulting price
be sufficient to keep the business going? How long would it take to earn back
investments in a lunar or asteroid mine?

4.5 Lunar Exploration

Lunar exploration will be a natural follow-up of the dream of interplanetary

exploration and expansion of research performed on board the ISS. In 2016 the
USA and Europe studied various opportunities for encouraging commercial
56 4 Interplanetary Settlement and In Situ Exploration

interplanetary exploration. Russia,3 Japan,4 China5 and India6 are also looking at
lunar robotic exploration missions, yet they have not explicitly indicated that these
future missions will involve commercial lunar exploration.
NewSpace companies are starting to investigate possibilities to provide com-
mercial logistics delivery services beyond LEO. The Blue Origin company has
declared interest to invest their competencies in the development of a Blue Moon
system and a lunar lander system, as part of a partnership with NASA.
In 2016 the US government granted to Moon Express the permission for the first
commercial lunar landing in 2017. The permission does not come as a surprise
bearing in mind that for the last couple of years successfully implementing the
NASA Lunar Catalyst programme (see Sect. 4.7) in which the agency is
cooperating with private companies for developing new competencies. The USA
does not only encourage US companies to perform commercial lunar exploration
but also conducts feasibility studies addressing questions related to commercial
lunar exploration. In 2015 NASAs emerging space office partially funded a study
under NextGen Space LLC about the Economic Assessment and Systems Analysis
of an Evolvable Lunar Architecture that leverages commercial space capabilities
and public-private partnerships. The studys primary research question is whether
America could return humans to the Moon, and ultimately develop a permanent
human settlement on the Moon by leveraging commercial partnerships within
NASAs existing deep space human spaceflight budget of $34 billion per year.
(Charles Miller 2015). One of the findings of the research team is that under the
COTS experience, a human return to the Moon may not be so expensive if there is a
commercial lunar base. A commercial lunar base may potentially pay for its
operations by exporting propellant to lunar orbit for sale to NASA, and in addition
there could be public benefits from building a commercial industrial base on the
Moon. Thus, national space agencies could become major customers to a commer-
cial lunar base. The observations of the authors of the Economic Assessment and
Systems Analysis of an Evolvable Lunar Architecture (ELA) (Charles Miller 2015)
are summarized below (Hall 2016):
Based on NASAs experience with COTS, a human return to the Moon may not
be so expensive as previously thought.

3
Russia is planning to rebuild the Russian Lunar lander robotic capability and perform five lunar
missions in which four lunar landers are included. The Russians are planning to launch the Luna-
26 orbiter and Luna-27 rover to the lunar surface and in 2024 launch Luna-25 Lander.
4
Japan is planning to launch by 2019 the SLIM mission and by 2022 the Selene-2 mission with an
orbiter, lander and rover on landing on the surface of the Moon.
5
The Chinese are working on a first robotic Moon lander that is supposed to be a precursor to a
manned lunar module that would carry Chinese astronauts to the Moon around 2030. Certain
authors report that the six Chang landers are being designed and builttwo landers each with
rovers, and as many as four other landers to complete two missions that would each bring back to
Earth 2 kg of lunar rock and regolith (Covault, November 2013).
6
India is planning to launch the Chandrayaan-2 mission with an orbiter, lander and rover.
4.5 Lunar Exploration 57

The USA could lead the development of a permanent industrial base on

the Moon.
An international lunar authority modelled by traditional public infrastructures
may be a most advantageous mechanism for managing the combined business
and technical risks associated with affordable and sustainable lunar development
and operations.
To the extent that national decision-makers value the possibility for economical
production of propellant at the lunar poles, it needs to be a priority to send
robotic prospectors to the lunar poles to confirm that water is economically
accessible.
The public benefits of building an affordable commercial industrial base on the
Moon could include economic growth, national security, advances in areas of
technology and innovation and others.
The above recommendations indicate interest from NewSpace companies to
promote commercial lunar exploration. For example, SpaceX announced a proposal
for the use of their Dragon capsule for a round trip to the Moon (Foust 2017). This
proposal may result in creating possibilities for partnership between NASA and the
private industry which will guarantee joint technology innovations under
programmes similar to the NextStep, as presented in a follow-up section. With
the expected ISS retirement, more and more NewSpace company will start promot-
ing different lunar exploration concepts.
In Russia, a future lunar base could be considered only in 2030, as proposed by
the Russian think-tank of TsNIIMash (Zak 2013). There have been discussions that
the Russians may launch a lunar orbiter and rover in 2020, followed by a lander in
2024. However, this time frame could be too optimistic having in mind that the
Russian competencies in lunar exploration might have been lost during the last
40 years with the retirement of most of the engineers working on the Luna
programmes.
Other experts suggested that Russia should focus on developing technologies,
such as nuclear power and propulsion systems, rather than target concrete
interplanetary missions.
In 2015 in Europe, ESA launched an open call for ideas for strategic partnerships
with the private sector that may lead to products and services with longer-term
objectives of commercial viability to be put on the market. The agency expected
bottom-up research ideas for partnerships in the context of the preparation for future
human Moon missions and utilization of in situ resources in support of the future
human missions. It welcomed ideas for services in support of future exploration
missions, such as those related to transportation to the Moon, communications on
the Moon, navigation and logistics (ESA, Call for ideas: Space Exploration as a
driver for growth and competitiveness: opportunities for the private sector 2015).
The open call will result in concrete ideas for developing competencies and
services of benefit for future lunar exploration though building an international
Moon village.
58 4 Interplanetary Settlement and In Situ Exploration

Fig. 4.4 Moon village (Credits: ESA)

4.5.1 Moon Village

The Moon village will be a result of the international collaboration between space
agencies worldwide and possibly the industry. It will be utilized for R&D, science,
technology testing, resource mining, business and other applications. The idea was
clearly described by ESA Director General Jan Woerner (Woerner 2016). He
explained in an interview that the Moon village will help combine international
competencies in human and robotic space exploration, and astronauts will work in
different fields beyond sciences, like business ventures, mining or tourism. In the
concept, the inflatable modules and 3D printing processes will be used to produce
multiple parts from lunar soil for shelters against micrometeoroids and space
radiation (ESA, Building a Lunar Base with 3D printing 2013a) (Fig. 4.4).
The Moon village will build upon the space agencies historical and future lunar
competencies, like the ESA Smart-1 mission, Russias Lunokhod Programme,7
Indias Chandrayaan-1 lunar mission and, of course, the unique heritage of
NASAs Apollo mission. ESA member states like Luxembourg may get actively
involved in international projects and gain robotic competencies from Japanese
companies like the Ispace one, which will develop a micro-robotic system to locate
and extract water from the lunar surface.
The Moon village concept could also benefit from technology solutions
developed by current NASA programmes like the NASA Lunar Catalyst
programme and technologies as the BEAM module developed under the SAA

7
Lunokhod-1 landed on the Moon in 1970 and Lunokhod-2 in 1973.
4.5 Lunar Exploration 59

Fig. 4.5 ESA Moon village (Credits: ESA)

agreement. Further on, NASA has continued to explore through its NextStep
programme8 the possibility of using the inflatable habitat innovation to support
future human spaceflight Moon and Mars missions (Aerospace 2015). Under the
NextStep programme, NASA hopes to attract NewSpace companies, like Bigelow,
to work on technology developments that potentially lower the cost of building
deep space habitats. NASA will also seek to develop habitats that will contribute to
future Moon log duration missions, with capabilities in tele-operations, robotics, in
situ resource utilization and other areas which will be discussed in section In Situ
and Planetary Resource Exploitation (Fig. 4.5).
European companies may have the opportunity to partner with NewSpace
companies and become involved into technology innovation at their own expense
thus learning more about building inflatable habitats without NASA funding.9
Primarily, this could act as a stopper for traditional space companies, used to
work on long-term contracts with national space agencies. However, it could also
be an opportunity for European companies to spin-in in Europe unique knowledge
on building and operating inflatable habitats.
ESA will need to perform an analysis whether it will benefit from cooperating
with Russia on future lunar missions or with the Chinese. Following up on the

8
NASA NextStep programme is a programme considered by NASA as a public-private partnership
for partnering with industry in the commercial development of deep space exploration capabilities
to support more extensive human spaceflight missions in the proving ground around and beyond
cislunar spacethe space near Earth that extends just beyond the moon (NASA, Next Space
Technologies for Exploration Partnerships-2 (NextSTEP-2) BAA Synopsis 2016d).
9
Foreign companies could be eligible partners under US-led consortium but must comply with the
Guidelines for Foreign Participation which will require no exchange of funding.
60 4 Interplanetary Settlement and In Situ Exploration

Fig. 4.6 Luna-1 and Luna-16 credit: personal collection

successful post-ISS cooperation, ESA could become an important partner of Russia

for future lunar base projects. In June 2016, it was announced that TsNIIMash are
working on a study10 of the key technologies and issues for building a lunar base
that will eventually hold up to 12 people. The historic Russian Moon competencies
from the Luna probes and the Lunokhod () programmes may prove to be
extremely valuable in a future Moon village mission. The Luna-9 launched 1966
performed the first ever soft landing on the Moon (Museum 2016), and the Luna-16
launched in 1970 performed the first automatic robotic lunar soil return. The
Russians had also a lunar programme and planned to have a human lunar mission,
one of the leading Russian cosmonauts, Alexey Leonov, being selected to be the
first cosmonaut to land on the Moon. The LK Lunar lander from the N1-L3 project
became the first Soviet spacecraft designed to deliver a cosmonaut to the surface of
the Moon (Zak 2013) (Fig. 4.6).
The lunar rover programme of the Russians, called Lunokhod, resulted in the
launch of Lunokhod-1 in 1970 that drove up to 10 km on the lunar surface and took
up to 20,000 images and in Lunokhod-22 in 1973. Many may argue that for 43 years
ago the Russians have probably lost their competencies to design and construct
vehicles, such as the Lunokhod-22. However, it is highly likely that the Russians
have sustained their knowledge but have just kept quiet about it (Fig. 4.7).
European-Russian cooperation may be similar to the ISS programme, where
both space agencies are not only involved in the development of the lunar infra-
structure but also create commercial opportunities for private companies to partner
in public-private partnerships with space agencies.

10
It has been reported that Roscosmos will spend 7.5 million $ on this study (Writers 2016).
4.5 Lunar Exploration 61

Fig. 4.7 Lunokhod-1 engineering model credit: personal collection

The creation of a Moon village might attract private companies that will perform
R&D research or extract lunar ice for producing rocket propellant or use lunar sand
for the construction of lunar modules. The creation of a post-ISS lunar laboratory
for performing R&D research and offering opportunities to companies to perform in
situ resource exploitation and 3D printing on the Moon could attract commercial
customers. Furthermore, pharma, biotech, material science and medical device
companies involved in ISS research may be interested in performing R&D in a
lunar-based laboratory. In the long term, future ESA and the EU may even consider
setting up programmes similar to NASAs Lunar Catalyst or COTS programme for
offering commercial space transportation services or even programmes for
supporting SME R&D payloads to be flown to the Moon village. If European
companies enter into partnership with American ones, ESA and the EU may set
up spin-in programmes to support these companies in transferring knowledge in
Europe from NASAs NextStep programme on building and operating inflatable
habitats for future Moon missions. However, the Moon village is a concept that
could become the basis for international cooperation between space agencies and
industry through the creation of future public-private partnerships that will be
responsible for the operations and its commercial utilization.
Yet, the creation of an international Moon village may result in increased
competition between commercial space transportation service providers and tradi-
tional launch service providers.
62 4 Interplanetary Settlement and In Situ Exploration

4.5.2 NASA Lunar Catalyst Programme

The NASA Lunar Catalyst programme, referred to as NASA Lunar Cargo Trans-
portation and Landing by Soft Touchdown (Lunar CATALYST), is a new
programme using the SAA (see Chap. 1) to encourage11 the development of robotic
lunar landers by private companies (Fig. 4.8).
The idea is to encourage NewSpace companies to develop commercial lunar
transportation capabilities that could be integrated in the future with US commer-
cial launch capabilities to deliver payloads to the lunar surface. It is assumed that in
the long run there could be an increased demand for performing R&D and lunar in
situ resource extraction which will put up the demand for robotic lunar lander
competencies.
Future commercial missions could include communication nodes and infrastruc-
ture, power and mobility infrastructure, cargo transport services, entertainment and
education (Young 2015).
Space agencies like ESA may even test new techniques like 3D printing for
construction of lunar modules, while others, like NASA, may encourage companies
like Bigelow to construct and test inflatable lunar modules. Or certain space
agencies, like the Russian one, may revive their lunar programme and cooperate
with ESA under similar barter agreements as for the ISS construction and
operations.
The future trend will be that space agencies set up programmes to encourage
private companies to develop commercial transportation services, robotic, in situ
resource competencies, 3D printing capabilities in microgravity environment and
in-orbit satellite service capabilities.

Fig. 4.8 NASA Lunar Catalyst concepts, credits: Astrobotic Technology, Inc., NASA/Masten
Space Systems, Inc, Moon Express, Inc.

11
The programme will operate in a similar way as the NASA COTS programme.
4.6 Targeted Markets 63

4.5.3 NASA NextStep Programme

NASAs NextStep Programme was set up to call for proposals from industry to
partner with NASA for the development of critical technologies needed for human
spaceflights for deep space human exploration. The idea is that through this
programme NASA should partner with private companies involved in technology
innovation that could deliver mission capabilities at lower costs both for com-
mercial low Earth orbit (LEO) advancements and long-duration deep space habi-
tation needs (NASA, Next Space Technologies for Exploration Partnerships-2
(NextSTEP-2) BAA Synopsis 2016d).
In the context of the development of habitation capabilities, NASA will seek to
attract companies that could propose studies that support mission architecture
definition, demonstration of key capabilities and others as discussed below:
Long-duration exploration systems testing
Automation, tele-operations and robotics
Human-assisted sample return
In situ resource utilization (ISRU) demonstration missions
Human research in deep space
Logistics support
General science
Deep space long-duration (e.g. Mars) spacecraft assembly, refurbishment and
validation
The idea is to design these surroundings in such a way that they could survive
deep space environment, e.g. higher radiation, and be used for future Moon and
Mars missions. In a way this programme offers an opportunity for NewSpace
companies to develop technology solutions for deep space habitation modules.
The capabilities developed under this programme by NewSpace companies could
also be used under the Moon village concept and spun in in Europe.

4.6 Targeted Markets

The space economy is expected to become a multitrillion dollar industry in the next
20 years as discussed by Goldman Sachs consulting company. They believe that
companies involved in space mining and tourism will draw a number of investors.
However, one should not forget that the space mining industry is in its infancy in
2017. The description of the targeted markets for future Mars, Lunar and space
resource exploration could be quite challenging since most of the concepts are at a
feasibility study stage .The targeted customers and markets were still unknown in
2016. According to authors like John Lewis (Lewis 2009), the following resources
for future exploration will be most attractive: lunar resources could be used for
oxygen for propellants and local life support, ferrous metals for local construction,
64 4 Interplanetary Settlement and In Situ Exploration

refractories (especially rutile) for heat shields and aerobrakes and Helium-3 for
fusion fuel on Earth.
Moon, Mars and near-Earth asteroids contain space resources of interest for in
situ resources exploitation.
Authors like Jerry Sanders (2016) also identify resources of main interest like
oxygen, water, hydrogen, carbon/CO2, nitrogen, metals and silicon. The following
major resources of potential interest have been identified on the Moon:
Regolith, oxides and metals (Ilmenite (15%), pyroxene (50%), olivine (15%)
and anorthite (20%))
Solar wind volatiles in regolith (hydrogen 50150 ppm, helium 350 ppm and
carbon 100150 ppm)
Water/ice and other volatiles in polar-shadowed craters (110% (LCROSS),
thick ice (SAR))
On Mars there are carbon dioxide, oxides and metals in the soil. Lunar regolith
could be potentially used for the construction of human habitats or landing pads,
roads or shelters against thermal radiation and micrometeorites (NASA, 3D Print-
ing in Space 2014a) on the Moon.
For ESA Moon village, the idea is to use 3D printing using lunar regolith for
building the habitat for the astronauts. NewSpace companies like Planetary
Resources have also looked at 3D printing using an asteroid composed of iron,
nickel and cobalt.
The use of 3D printing on the lunar surface at present seems an attractive
opportunity for NewSpace companies. However, there are a number of political,
technical12 and financing risks that need to be overcome before 3D printing
becomes a reality on the Moon.

4.6.1 Lunar Mining

Companies like Shackleton Energy Company (SEC) aim at providing rocket

propellant derived from ice13 located on the lunar poles (Keravala, JanuaryJune
2013). The SEC proposal is to extract the water from the ice, transport it to LEO and
convert it to liquid oxygen and liquid hydrogen for propellants to be sold commer-
cially. The propellant will be stored into propellant depots that will become hubs for
in-space transportation.
Their target is to set up by 2022 the first depots providing propellants in space
followed by servicing and other missions (Keravala, JanuaryJune 2013).

12
3D printing may be difficult on the Moon gravity.
13
Data from LRO, LCROSS and Chandrayaan probes have demonstrated the availability of huge
deposits of ice in the cold trap craters of the lunar poles.
4.6 Targeted Markets 65

According to SEC, the targeted markets between 2018 and 2042 will be the
following:
Early marketsGEO telecom satellites providing hypergolic propellant for the
life extension of satellites. The target is to service some of the 400 satcom
satellites.
Civil spacethe 14 governments from the International Space Exploration
Coordination Group (ISECG) and space agencies (e.g. US, Russia, China,
India, Pakistan, South Korea, Japan) may aim at purchasing long-term propellant
contracts.
The company will be aiming at developing modular, flexible, highly reliable
transporters that will provide the next generation of so-called in-space taxi services.
Their most optimistic scenario according to their customer demand model aims at
supplying approximately 50,000 metric tons of propellant by 2042 (Company
2013). Innovative concepts like this one will need to have an attractive business
model that will make possible the development of a large market initially targeting
governments as prime customers.

4.6.2 Lunar 3D Printing

3D printing in microgravity was successfully demonstrated when it was installed on

board the ISS. In 2014 a zero-G 3D printer14 was launched to the ISS and was used
as a machine shop for printing missing tools or parts or for creating structures that
are difficult to transport from Earth. In a study performed by NASA, it was
concluded that additive manufacturing has the potential for the construction of
structures that are fully optimized in zero-gravity environment (NASA, 3D Printing
in Space 2014a).
ESA is also investigating the use of lunar soil for 3D printing of a shelter that
could be used against micrometeoroids and space radiation (ESA, Building a Lunar
Base with 3D printing 2013a) (Fig. 4.9).
NewSpace companies like Planetary Resources have also looked at 3D printing
using asteroid materials. To perform a demonstration, they used asteroid sources
from Campo Del Cielo that contained iron, nickel and cobalt materials. In long-
term lunar space missions, 3D printing on the lunar surface will evolve into the
utilization of in situ materials and the capability to produce multiple parts and tools.
However, there are a number of questions that arise: Is there a market for 3D printed
products in microgravity? What is the market size? Who will be the targeted
customers?

14
A zero-G printer was launched into orbit in 2014 and was a result of a joined partnership between
NASA MSFC and the company Made in Space (Space 2015).
66 4 Interplanetary Settlement and In Situ Exploration

Fig. 4.9 ESA Moon village (Credits: ESA)

Will it be more cost-effective to make 3D printed tools on the ISS rather than
launch them to the ISS?
Private SME could be interested in participating in future lunar space missions,
in particular projects like ESA 3D lunar base, using lunar oil for constructing a
lunar settlement.

4.6.3 Mining Asteroids

Asteroid mining is expected to result in the extraction of water, hydrocarbons and

structural metals. They could be mined also for water for propellants and life
support, ferrous metals for use in space and the platinum group metals to return
to Earth (Lewis 2009).
The asteroid belt is rich of natural resources that could be mined like iron, nickel,
aluminium and titanium for construction in space; water and oxygen to sustain
astronauts; hydrogen, carbon and oxygen for use as rocket propellant; and many
other natural resources.
C-type of asteroids are the most common ones and considered to have been
formed in the beginning of the solar system. C-type asteroids are thought to contain
abundance of water, organic carbon, sulfur, nitrogen, phosphorous and ferrous
metals. Planetary Resources and Deep Space Industries were most active in
exploiting asteroid mining.
4.6 Targeted Markets 67

4.6.3.1 Planetary Resources

Planetary Resources are targeting four markets: fuel from water, extraction of
platinum, 3D printing from an asteroid (or meteorite) and Earth observation. The
company aims at producing fuel in space from carbonaceous chondrites rich in
water that can be broken down into highly efficient LOX/H2 rocket fuel (Resources
P. 2016a). The approach they will undertake will depend upon the composition of
the targeted asteroid. They claim that the mining equipment required will be quite
simple; it is even possible that no surface contact with the asteroid may be needed.
According to their concept, first they want to enclose a small asteroid or position a
cold plate in the vicinity of a large asteroid, and then they aim at concentrating
thermal solar energy onto the asteroid to reach a certain temperature, at which water
will volatilize and the gaseous water will freeze on contact with the cold place in a
pre-concentrated form. Once the desired quantities are captured, the place will
release the asteroid and deliver the water in LEO (Fig. 4.10).
The extracted water will be broken into hydrogen and oxygen rocket fuels. The
fuel will be stored in refuelling stations and will be used for refuelling GEO
telecommunications satellites. The availability of fuel will enable the growth of
space mining operations.
The second targeted market is linked to extracting platinum, since it is believed
that the platinum group metals (PGMs) are abundantly available on asteroids. The
access to platinum will encourage the production of technologies (e.g. catalytic
converters), aiming at reducing emissions and resulting in innovations in the
automotive sector and other sectors (Resources P. 2016a).
The company has been quite successful in signing an agreement for 25 million
euros with the Luxembourg government and the Societe Nationale de Credit et
dInvestissement (SNCI) for launching the first commercial asteroid prospecting
mission by 2020 (Resources P., Planetary Resources 2016b). In addition to the
above targeted market, the company is developing innovations in using 3D printing
technologies (Metals 2016) from asteroid metals to print a spacecraft prototype,
thus seeking to develop the market for 3D printing in the zero-gravity environment
of space. The company will concentrate on their asteroid mining activities in the
frame of their activities of asteroid mining in Luxembourg.

Fig. 4.10 Planetary Resources asteroid mining concept (Resources P. 2016a)

68 4 Interplanetary Settlement and In Situ Exploration

4.6.3.2 Deep Space Industries

Deep Space Industries15 is the other company concerned with asteroid and near-
Earth object mining. They are interested in extracting water and important elements
like organic carbon, sulfur, nitrogen and phosphorous and ferrous metals (indus-
tries). The company has a similar goal to retrieve and process space resources into
commercially useful products, aiming initially at near-Earth asteroids and
processing them into propellants for refuelling communication satellites and metals
for building infrastructures.
Their initial plan is first to launch the Prospector-X probe that will look for NEA
that will contain water, metals and silicates. This probe will be built within the
framework of the Luxembourg R&D space programme discussed in section In Situ
and Planetary Resource Exploitation.
The companies involved in promoting asteroid mining will need to focus on
developing viable business cases and to define the direct and indirect benefits from
mining asteroids. Similar to the terrestrial mining industry, the asteroid mining
industry will operate in severe environments and will be exposed to high mainte-
nance, operations and integration of infrastructure costs. In addition, this emerging
industry will also need to focus on having a return on investment and justify the
investment for building the infrastructure (Sanders 2016). The terrestrial mining
industrys annual growth rate of 8.5% (NASA 2014a, b) may seem attractive to
NewSpace companies and may build their business case around it. However, it may
be quite misleading as investors will raise questions related to whether these
companies will be able to attract private infrastructure financing and generate
sufficient profit to achieve return of investment and whether they can create
sustainable business models that will support them in their activities. How far
would the price of rare metals drop if the market is flooded with cheap material
from asteroids? Would the resulting price be sufficient to keep the business going?
How long would it take to earn back investments in a lunar or asteroid mine?
Nevertheless, the NewSpace companies interested in situ resource exploitation
should at first be in a position to identify the resources on the asteroids and then be
able to attract long-term financing for implementing their missions that will permit
the collection and extraction of these resources. These companies will also face
questions related to their capacity to build infrastructures that will operate in
extreme environment and be able to achieve long-duration and autonomous oper-
ations without any astronauts support. Clearly the Luxembourg initiative will
encourage the further emergence of new markets and the evolution of the concepts
for lunar and asteroid mining. The NewSpace companies involved in these

15
The company became famous for its Kick starting campaign of selfies into space using their
Arkyd telescopes, as part of their Ceres programme for the launch of ten Earth observation
microsatellites with the objective to provide EO services in agriculture, fire and pollution moni-
toring. Sadly due to low interest from the business community, the Arkyd Kick starting campaign
was cancelled, and the company will return the funding to the public.
4.7 Mars Exploration 69

activities will aim at demonstrating the technical feasibility of in situ resource

exploration. There may be several companies aiming at developing new unknown
markets linked to additive manufacturing, robotics, high-performing computing,
artificial intelligence and Earth observations. Due to the private nature of their
activities and the private funding attracted, the driving challenge will be to dem-
onstrate a return of investment, a self-sustainable business case and the develop-
ment of numerous space applications.

4.7 Mars Exploration

Mars exploration has always captured the dreams and imagination of visionaries
and recently of the public. Earlier concepts for exploration of Mars were discussed
by Mars Society proposal for a so-called Mars Mission Trans-Orbital Railroad plan,
using SpaceX Falcon 9 launch vehicle and Dragon capsule for crew transportation.
Buzz Aldrin also proposes a human Mars exploration starting first with the explo-
ration of the two Martian moons: Phobos and Deimos. The aim is to overcome
communication delays, to create conditions for operating equipment on Mars and
use these opportunities to pre-position habitats without need of on-site astronauts
(Aldrin 2013).
Nevertheless, the concept for Mars exploration that truly captures the imagina-
tion is the Mars One initiative. It is a fully private initiative with the primary goal to
establish a human settlement on Mars. The idea is to select a crew of around
40 astronauts from the public and bring four of them to Mars on the first mission.
The crew selection, training, preparation, launch and trip will be filmed in real time
and broadcasted all over the world. The founders of the Mars One initiative decided
to bravely go for a one-way mission for two reasons: first, it is to support the
mission objective of creating a Mars settlement (MarsOne, MarsOne Mission: Is it
really Possible? 2012), and second, the current complexity and cost for the return
make its cost prohibitive in the current technology landscape.
Zubrins concept uses existing launch technology and the Martian atmosphere to
generate rocket fuel, extracting water from the Martian soil, and eventually utilizing
the abundant mineral supplies of Mars for construction purposes (Aldrin 2013).
According to his concept, the markets of commercial space transportation will
grow drastically due to the need to launch around 30 tons of cargo on Mars which
will lead to increased demand for crew and cargo launch services and orbital
transfer vehicles. In addition, a bigger demand for inflatable habitats like the
Bigelow BEAM module may be expected. Furthermore, a long-term Mars mission
whose one-way trip will last at least 500 days will benefit from in-orbit satellite
servicing and 3D printing in microgravity environment of spare parts. At this early
level of concept maturity, it is difficult to predict the types of new commercial
markets that will emerge.
It is clear, though, that a future Mars mission will face an increased demand for
space transportation services, robotics, in-orbit satellites servicing and 3D
70 4 Interplanetary Settlement and In Situ Exploration

capabilities. The growth of space transportation services will potentially result in an

increased demand and competition between NewSpace companies like SpaceX,
Orbital and traditional launch service providers.

4.7.1 Mars One Concept

The Mars One initiative comprises the launch of a demo mission in 2022 seeking to
prove whether the concept for certain technologies works, the launch of a rover and
communication satellite in 2026, the launch of six cargos containing two living
modules and life support systems in 2029 and the launch of the first crew to Mars in
2031 (MarsOne, MarsOne Mission: Is it really Possible? 2012) (Fig. 4.11).
Mars One targets the edutainment and entertainment market since their business
model is different from the traditional space companies. Mars One will be looking
at several ways to generate revenues and tap into new markets, described below
(MarsOne, MarsOne Mission: Is it really Possible? 2012):
Global streaming media campaign
Astronaut selection programme
Ongoing streamed astronaut training programme
Crowd-sourced fundraising
Lease of Mars One research facilities
R&D markets through the sale of IPR associated with R&D research in the fields
of medicine, pharmacology, low-G biology, bio-engineering and solar systems
studies
The primary revenue will be from edutainment and the streaming media cam-
paign; however, the potential of R&D markets and the potential for leasing research
facilities should not be underestimated. Initiatives like Mars One possess the power
to capture the imagination, develop new markets and push the boundaries of space
exploration.

Fig. 4.11 Mars One first crew to Mars by 2031 (MarsOne 2016a, b)
4.9 Conclusions 71

Future Mars missions will increase the demand for commercial space trans-
portation services, new capabilities in robotics, tele-operations, artificial intelli-
gence, automation, ISRU capabilities and 3D printing. These will provide long-
term new market opportunities for NewSpace companies if they succeed in devel-
oping these capabilities.

4.8 Challenges

In addition to the major technical, financial and market risks, the NewSpace
companies involved in these activities will primarily aim at offering fuel for
refuelling GEO satellites and also extracting platinum. They may be exposed to
numerous challenges before they are able to develop their targeted markets.
Technical challengesdifficulties to locate the best deposits of ice and consid-
erable investments for identifying them (Rapp 2006), crew autonomy beyond
LEO, high reliability of life support systems, space radiation protection, auton-
omous vehicle system management (Hufenbach 2016), lack of in-orbit satellite
competencies and services for rendezvousing and refuelling satellites.
Funding capitalcompanies may fail to attract sufficient crowd funding for
realizing their ISRU concept; private investors may shy away from these con-
cepts as they may consider them to be expensive long-term infrastructure
projects.
Market developmentNewSpace companies may wrongly assume that there is
a huge market, that its creation is easy, since the time-to-market may be
too long.
Long-term cost overruns for safety operations may be expected for such com-
plex missions.
NewSpace companies will encounter some additional challenges connected with
lunar and asteroid mining, such as the following: difficulties to attract funding and
quickly generate return on investment; to develop viable and sustainable business
models for ISRU, lunar and asteroid mining; and to identify unknown markets and
customers. Certain companies might encounter terrestrial competition from
ground-based industries and exposure to high maintenance and operating costs
for asteroid mining. The establishment of the infrastructure and growth of produc-
tion resources will require patience and long-term investment.

4.9 Conclusions

NewSpace companies will have to both create new markets and take into account
the competition from terrestrial technologies. The terrestrial mining industrys
annual growth rate of 8.5% (NASA 2014a, b) seems attractive to NewSpace
72 4 Interplanetary Settlement and In Situ Exploration

companies, but will they be able to attract private infrastructure financing and
generate sufficient profit to achieve return of investment? Will they be able to
have sustainable business models that will support them in their activities? How
much would the price of rare metals drop if the market is flooded with cheap
material from asteroids? Would the resulting price be sufficient to keep the business
going?
Private initiatives for future Mars exploration like the Mars One mission, which
captured the imagination of the public, are changing the business model in the space
industry. They are tapping into the entertainment markets through live global
streaming of astronaut training and launch. In addition, they are also looking
at the development of the R&D markets in the fields of medicines,
bio-engineering, etc.
With future Mars missions, the markets of commercial space transportation will
grow drastically thereby increasing demand for inflatable habitats like the Bigelow
BEAM module. Long-term, one-way Mars missions lasting for at least 500 days
will benefit from in-orbit satellite servicing and 3D printing in microgravity envi-
ronment of spare parts. At this early level of maturity of the concept, it is difficult to
predict the types of new commercial markets that will emerge. The demand for
commercial space transportation services, new capabilities in robotics, tele-
operations, artificial intelligence, automation, ISRU capabilities and 3D printing
is expected to increase. This, in turn, will step up competition between NewSpace
and traditional launch services and generate economies of scale.
The promise of lunar and asteroid mining is expected to result in the extraction
of water, hydrocarbons and structural metals. The lunar water could potentially be
used for liquid oxygen and liquid hydrogen for propellants. Asteroid mining is
expected to result in the extraction of water, hydrocarbons and structural metals. If
we can coherently and convincingly define that vision, then the arguments for going
beyond GEO will start falling into place and the need for ISRU to enable that
commercially and cost-effectively will become compelling.
ESA may even create a programme to spin-in in EU technology developments
for constructing human space habitat and other capabilities developed under NASA
NextStep programme or other national space agencies programmes.
Space agencies may set up programmes to encourage private companies to
develop these competencies which will result in the creation of new commercial
space markets, new services and products.
The companies to become involved in these concepts will face a complex
environment. Yet, through potential public-private partnerships with governments
and space agencies, they could successfully implement these concepts. The evolu-
tion of 3D printing under microgravity conditions and the development of in-orbit
satellite servicing capabilities resulting in refuelling satellites are bound to bring
potentially environmental benefits to space debris mitigation.
Chapter 5
Commercial Space Station Activities

5.1 Introduction

At present five space agencies, NASA, Roscosmos, ESA, JAXA and CSA (e.g. ISS
partners), are operating the International Space Station in low Earth orbit (LEO).
They own and operate their own modules and share some of the on-board exper-
imental racks. The space station is the result of 25 years of international cooperation
between the agencies. The station is a space laboratory that could host up to six
astronauts, and its size corresponds to around two football playgrounds. The space
agencies have planned the operational life of the ISS to last until 2024; however,
there are discussions for prolonging it by 2028. Presently the ISS partners do not
have long-term plans for building a next generation of space stations although there
are various ideas. One of them is that after the launch of the Russian multipurpose
module in 2019, the Russian ISS segment will be fully independent from the rest of
the ISS in terms of power, communications and other resources. Permitting the
separation of the Russian ISS modules, a Russian space station may be created
which will even be fitted with inflatable modules (Zak 2016). In addition China has
been looking at launching its own Chinese large modular space station in LEO
around 2022. Researchers worldwide are invited to fly their experiments on board
it.
NASA called for private companies to offer transportation services thus intro-
ducing competition to encourage the development of crew and cargo transportation
services for LEO and beyond. By creating this commercial opportunity, the agency
undertook a risk, since the companies bidding for NASA COTS contracts might fail
to attract sufficient private funding1 to undertake the necessary technology

1
In the early days of NASA COTS programme, the agency had signed an agreement also with
Rocketplane Kistler, allocating USD207 million. The company failed to attract private funding,
and NASA cancelled their agreement with them, following the signing of an agreement with
Orbital for USD178 million.

Springer-Verlag GmbH Germany 2018 73

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_5
74 5 Commercial Space Station Activities

Fig. 5.1 International Space Station (Credits: NASA)

developments. The companies bidding might also face high technical risks in the
development of the launched vehicles, as they started developing them from
scratch. On the other hand, it offered unique commercial opportunities to compa-
nies to develop and test their new technologies and systems on board the ISS
resulting not only in suppliers competing for offering cargo transportation services
to NASA2 but also in developing innovative concepts for ISS utilization (Fig. 5.1).
An example is the docking of the Bigelow BEAM inflatable module attached to
the ISS in 2016 which creates the basis for developing the Bigelow next generation
space station consisting of two B330 expandable modules. Other companies like
Axiom are investigating the possibility to dock a commercial module to the ISS in
2020 and, after the end of the ISS in 2024, form the Axiom commercial space
station. The plan is to attach the inflatable Xbase module to it and create a fully
commercial space station (Fig. 5.2).
With the expected retirement of the ISS either in 2024, the role of space agencies
in building and operating space stations will shrink, but the research community
will still need to fly their experiments in microgravity. Therefore, new business
opportunities for flying and hosting microgravity R&D experiments will be created,
as there will be no permanent governmental space laboratory open for commercial

2
SpaceX Dragon vehicle was successfully launched on a Falcon 9 and already several times
docked to the ISS. Orbital ATK Cygnus vehicle was also successfully docked to the ISS and could
be launched on an Antares or Atlas 5 launcher. The CST-100 vehicle Boeing is planned to be
launched on an Atlas 5, while Sierra Nevadas Dream Chaser resembles a small space shuttle with
reusable capabilities and is planned to be launched on an Atlas 5 and Ariane 5 launchers. Lockheed
Martin Jupiter and Exoliner could also be launched on an Atlas 5.
5.2 Stakeholders 75

Fig. 5.2 The US commercial crew and cargo capabilities (Lynne 2015). Credits: NASA

payloads after 2028. By 2024 the ISS markets3 will have probably reached the
mature stage of market development, with high profits, stable demand and compet-
itors. As discussed in Chap. 1, governmental and private customers will have a high
demand for microgravity platforms hosting R&D experiments.

5.2 Stakeholders

In the early days of ISS commercialization, the prime actors in ISS utilization were
space agencies and traditional space companies. They used to cooperate with
non-space companies for helping them qualify and integrate their payloads on
board the ISS. In their nascent stage, the ISS markets had only few companies for
customers. Nevertheless, in the last 15 years the ISS markets have entered into a
frenzied phase of development, and the number of customers have doubled
(Fig. 5.3).
The difference between the early days of commercialization in the late 1990s
(see Chap. 3) and at the present is that space agencies are the customers of

3
In 2016 the ISS markets reached the frenzied stage of market development with market expan-
sions, raise of profits and increased competition.
76 5 Commercial Space Station Activities

Fig. 5.3 Stakeholders

NewSpace companies for commercial space transportation services programme.

Table 5.1 shows a short list of stakeholders, organization, markets and services.
Clearly there is a very wide spectrum of service providers to NASA for com-
mercial crew and cargo services. NASA is actively encouraging ISS utilization for
R&D research in microgravity in life and physical sciences, with a particular focus
on targeting customers from pharmaceuticals, biotechnology, physical sciences and
life sciences. In the USA there is a Center for the Advancement of Science in Space
(CASIS) that encourages the use of microgravity environment for R&D research on
board the ISS. Here is just an overview of the US-based R&D customers utilizing
the ISS on-board resources.
Clearly in Europe there are also many private companies involved in R&D
research on board the Columbus module. Presently in Europe, there is no institute
to encourage ISS utilization of the Columbus module. This is natural as ESA has an
8.3% contribution to the ISS programme. However, as already discussed in Chap. 3,
in the early days of ISS commercialization, ESA set up favourable conditions for
attracting R&D customers to fly small experiments to the ESA Columbus module
(Tkatchova 2013). However, today the R&D research is managed by ESA ELIPS
programmes in which research universities, institutes and SME are actively
involved in performing research in the areas of complex plasmas and dust particles
physics, fluid and combustion physics, material sciences, physiology and biology.
ESA is quite careful not to induce competition between institutional R&D and
commercial customers. ESA has only the Columbus module, and compared to
NASAs, its ISS resources are limited and primarily allocated for institutional
R&D.
5.2 Stakeholders 77

Table 5.1 Orbital exploration stakeholders

Stakeholders Organizations Markets Services/products
Manufactures/ Space-X, Orbital ULA, ISS cargo/crewed Orbital launch services
operators Boeing, Bigelow Aerospace transportation ser- Air-launch orbital ser-
(Orbital Sierra Nevada Corporation vices vices
exploration) Made in Space Mars exploration Orbital transfer vehicles
Axiom Space R&D markets Inflatable habitats
R&D payloads design/
development/3D print-
ing on board the ISS
CubeSats launch from
the ISS
Service pro- UTC Water provision Water provision to
viders NanoRacks (NASA customer) astronauts
(Orbital) AlphaSparks Internal/external Internal/external pay-
Teledyne Brown Engineering platforms load integration
BioServe Earth observation High-definition videos
Kentucky Space Biology Microfluid cell culture
Techshot entertainment platform
Red Space biology platforms
Space Adventures and services
Multilab space biology
platform
Bone densitometer and
centrifuge platform
Ultrahigh-definition
digital cinema camera
Customers R&D companies Biology Preventive cancer drugs
(Orbital Non-space customers Biotechnology/ and therapies
Exploration) Pharma (Lilly, Merck, P&G, drug develop- In vivo diagnostics
Novartis, etc.), Biotech, ment/cell & tissue Innovative models for
Aerospace (Honeywell) engineering diagnosis, prevention,
Automotive companies Space Health/osteoporo- treatments of osteoporo-
Adventures sis/medical sis disease
devices Nano-materials
Earth Observa- Hip, spine, ultrasound
tion/protection diagnostics
New materials

Information for the rest of the ISS partners research institutes involved in ISS
utilization is limited.
In spite of the fact that the Russians were pioneers in space station commercial-
ization (as already discussed in Chap. 3), they decided to focus on attracting
institutional rather than commercial customers. At present, Roscosmos is still the
only space agency flying astronauts and cosmonauts to the ISS and offering launch
services to the rest of the ISS partners.
In the late 1990s, CSA had the intention to attract commercial users for their ISS
mid-deck lockers and even contracted a big consulting company to develop a net
present value model for their activities. However, their commercialization activities
78 5 Commercial Space Station Activities

ceased as there was little interest from the Canadian companies in ISS commercial
utilization. JAXA initiated its ISS commercialization activities much later, in
2004,4 and used a so-called paid utilization system for the KIBO module for
research and cultural related projects.5 With the retirement of the ISS, the R&D
companies involved in microgravity research may look at flying their payloads on
board commercial space stations or the Russian or Chinese space stations. The
question that arises is whether US/European companies will be ready to fly their
payloads on board a Chinese space station.

5.3 Lessons Learnt from Space Station Commercialization

The lessons learnt by the ISS partners from space stations commercialization as
discussed in Chap. 3, are relevant for the future activities of NewSpace companies
and for space agencies interested in encouraging ISS commercial utilization.
NewSpace companies will have to create new markets and parallel with it, pay
heed to competition from terrestrial technologies. From the analysis of the lesson
learnt, NewSpace companies involved in flying microgravity experiments will have
to clearly define their unique selling points, diversify their customer base and
develop clear business cases. In spite of high expectations for success, the ISS
partners ran into many obstacles in developing ISS commercialization, as presented
in Table 5.2, Lessons learnt from ISS commercialization. Space agencies consid-
ered commercialization as a way to achieve partial cost recovery and increase
public awareness of the existing market opportunities. Today the concept is differ-
ent; ISS commercial utilization is seen as a way to encourage the creation of new
industries.
The former approach to commercialization was normal for the ISS partners as
they used to be public bodies which had no business or commercial experience, and
therefore, the prime benefits they foresaw from commercialization were connected
with cost recovery (Tkatchova 2013).
The above lessons have been drawn from the MIR and ISS commercialization
for the period of up to 2008. In the past few years, the ISS partners generated more
lessons from the research performed on board the ISS.
NewSpace companies may have too high market expectations and assume that
market creation is easy. However, as in the case of protein crystallization, their
experiments when flown in microgravity may be exposed to competition from
terrestrial technologies. In addition they will face difficulties in classifying their

4
JAXA set up an Open Space Lab to create new business models and projects (Tkatchova, JAXA
ISS Commercialisation strategy 2011). JAXA also launched the JAXA Cosmode Project that
provides a brand for space-related products and services.
5
Under the JAXA utilization system a number of projects were launched, such as the Olympus
Camera mission, Lotte Xylitol, Poetry competition, flying flower seeds in space and others.
5.3 Lessons Learnt from Space Station Commercialization 79

Table 5.2 Lessons learnt from ISS commercialization (Tkatchova, Space Station Lessons learned
2011)
Market creation is easy
Competition from terrestrial technologies
and solution
Different pricing policies
Top-down market analysis, rather than a
bottom-up market analysis (Tkatchova
2013)
Long time to market period of a commer-
cial project
Space missions take at least 10 years to
succeed
Space-based research versus terrestrial research
(e.g. in the mid-1990s protein growth in micro-
gravity was considered to contribute to the best
protein crystal structure; however, for several
years now, similar protein crystals have been
grown in terrestrial laboratories)
Protein growth in the microgravity environment
was a promising area of research; microgravity
environment creates the right conditions for
crystals growth. However, ground-based labora-
tories have managed to grow crystals with simi-
lar quality
ISS partners set up different prices for the ISS
services they were offering to customers
Cost estimates of today are doubled during mis-
sions, and cost overruns can be expected for
future interplanetary space missions
Unknown R&D customers and markets, com-
bined with a lack of historical reliable market
data, marketing and sales strategy
Therefore, time to market of a product is rather
long

markets, identifying their customer and pricing their services, as already discussed
in Chap. 2.
For the ISS partners, the value of the R&D research performed on board the ISS
is of critical importance for the research in the areas of osteoporosis, muscle and
bone physiology, neuroscience, new materials and processes and biotechnology.
The lessons learnt from the ISS partners were summarized in by the Multilateral
Coordination Board (MCB) in 2009 (Table 5.3).
Space agencies faced political, budgetary and strategic challenges, such as
budgetary reductions, political pressures to achieve cost recovery and fear from
the STEM community that commercial payloads will overtake their flight oppor-
tunities. Clearly after the end of the ISS, the space agencies role will evolve.
The markets, targeted by NewSpace R&D, will contribute to attracting private
investors to cofinance commercial payloads. Therefore, NewSpace companies will
need to get involved in the early phases of the early design of space station
programmes in order to be in a position to influence requirements and have access
to multidisciplinary racks and lockers that will meet their needs. Some of the
questions that arise are whether R&D customers will be willing to fly their payloads
on board a Russian or Chinese space stations or will they prefer to fly them on board
commercial space stations?
The questions space agencies will encounter are the following: How can the
remaining time on the ISS be utilized in the best way in order to enable the demand
80 5 Commercial Space Station Activities

Table 5.3 Lessons learnt from the ISS programme (MCB 2009)
Utilization
Difficulties from user communities to identify
benefits from ISS utilization
ISS science and applications
Consult with end-users early in the
programme to ensure useful ISS utilization
End-users should coordinate internationally
Commercial involvement
Considering commercial engagements early
in the process depending on their programme
Establish framework and await clear markets
for commercial engagement
Recommendations
Utilization should be developed as part of the
long-term mission strategy for the programme,
with clear technical, policy and communica-
tions goals
Exploration programmes should use the ISS to
pursue science and applications relevant to the
future of the space programme
Engage end-users early to ensure programme
design will have the needs of all parties
International coordination groups will bring
benefits with respects to ISS utilization
It is important to offer and ensure opportunity
for business involvement at an early stage of the
ISS programme
A common approach between ISS partners
should be set up

for LEO services to sustain commercially the LEO supply of services

(e.g. transportation, payload integration, etc.)? How can space agencies encourage
the continuation of private investment in LEO and microgravity research and
beyond? How can the commercial capabilities developed by private companies
be used for future lunar or Mars missions?
New policies will be implemented that will encourage the emergence of public-
private partnerships; the latter will promote the construction of private space
stations for hosting public/private microgravity experiments. The question arises
whether space agencies will continue to invest in LEO exploration through space
stations construction or whether they will primarily focus on scientific and
interplanetary missions. Will certain space agencies prefer the COTS model for
constructing commercial space stations, or will the creation of platforms as the
Industrial Space Facility be encouraged, as discussed in Chap. 3?

5.4 Targeted Markets

In the last couple of years there has been strong investor interest in the USA. In
2015 more than 50 venture capital firms invested in space deals worth of capital of
around $1.8 billion (Group, Start-up Space 2016). Recent studies have indicated an
interest of around 250 investors in start-up companies, 66% of whom are from the
USA and the rest, 34%, from outside the USA. The investor interest in NewSpace
companies demonstrates trust in the business cases, in the stable and increasing
demand for commercial crew/cargo transportation systems, earth observation appli-
cations, broadband satellite communications constellations, payload integration
5.4 Targeted Markets 81

services and other type of services. In recent years commercial projects related to
research on board the ISS have demonstrated that ISS markets have entered a
frenzied stage of development with increasing profits and markets and relaxed
regulation.
For 15 years the ISS partners have been investigating ways to attract non-space
companies to perform research on board the ISS. The diversity of the research
performed on board the ISS offers opportunities to non-space companies to perform
research in the areas of biotechnology, biology, new drug development, osteopo-
rosis, cell and tissue engineering, new materials developments, robotics and tech-
nology testing and demonstration. For the last 10 years, many studies have been
assessing the market demand for flying R&D experiments and space tourists to the
ISS. Some of these studies have analysed historical trends to make predictions for
the future demand for flying experiments to the ISS. For example, NASA issued a
study in which they propose two scenarios, one for the lower end and the second
for the upper end, the lower end being based on historical trends, while the upper
end reflecting expected growth (NASA, Commercial Market Assessment for Crew
and Cargo Systems 2011). The national interests market reflects other countries
national interest to fly their own astronauts or payloads to the ISS. Others presented
market demands including information about education markets. In this study
clearly NASA didnt consider the demand of the rest of the ISS partners when
calculating the historical estimate under applied R&D. The national interests
category presents countries that lack crew and cargo transportation programmes
and are willing to fly their own astronauts and experiments. The space tourism
category includes spaceflight participants who fly in space for their own pleasure.
Applied R&D includes customers interested in flying their experiments on board
the ISS, and other markets include subcategories, such as satellite servicing, media
and entertainment and education markets (Table 5.4).
From Table 5.5 it becomes clear that the market with the highest demand of
36 astronauts, even for the pessimistic scenario of human spaceflight services, is the
national interests market. With the retirement of the ISS in 2024, there will be a
new market opportunity, and NewSpace companies investing in the design and
development of commercial space stations will look into attracting customers from
these countries and offering in addition full astronaut programmes.

Table 5.4 Crew and cargo transportation demand estimates per market segment (NASA, Com-
mercial Market Assessment for Crew and Crago Systems 2011)
Cargo lower end Cargo upper end Crew lower Crew upper
Market segment (lbs)a (lbs) end end
National interests 6180 24,72028,340 36 186216
Tourism 990 17,700 8 143
R&D and technology 0 950013,400
development
Other enabled markets
Total 7170 51,92059,530 44 329359
1 lbs 0.45359237 kg
a
82 5 Commercial Space Station Activities

Table 5.5 ISS R&D and emerging markets (Tkatchova, Emerging markets and space applications
2011a)
R&D industry sector Industrial applications Market size
Health industry
Drug development New drug development, micro- In 2050, the total direct costs
Osteoporosis encapsulation from osteoporosis is expected to
Medical scanning Bone microstructure measure- reach 76.7 billion Euros in the
equipment ment EU (I.O.F 2005)
Sports equipment Preventive drugs/therapies, carti- DNA studies
Cancer research lage degeneration Development of preventive can-
Physiological studies Hip, spine, ultrasound diagnostics cer drugs and therapies for
equipment human spaceflight mission will
Radiation impacts on human need to be addressed for future
health for nuclear energy lunar, asteroid and Mars
Preventive drugs and therapies missions
Cell and tissue engi- Bioreactor development ESA ERISTO projecta
neering In vivo diagnostics Freqbone experiment on board
Bone formation Effects of drugs on bone cell the ISS
activity
Lighter and stronger Lightweight materials Aviation industry
materials for aviation Novel casting alloys Automotive industry
and automotive Bio-materials 3D printing in microgravity
industries High-temperature ceramics
Self-healing materials
Nano-materials
Waste management Water purification methods ISS water recycling (astronauts
Closed life cycle ESA Melissa project drinking recycled water)
systems
Software development Requirements integration, opera- Software solutions for SCADA
tions and procedures manage- systems management
ment for TM/TC data
management
Oil recovery Experiments for oil recovery Measuring thermo-diffusion
processes and the Soret effect
SCCO of crude oil
Tele-medicine Neurosurgery ISS METRON project for tele-
Mining industry Robotics for mining robotics operations
Nuclear industry Collision detection MDA is working on spinning off
Security industry Maritime applications its robotics experience for
Aviation applications developing a robotic tool for
neurosurgery (MDA 2009)
ADS-B applications for tracking
aircraft
Space debris Space debris experiments on
board the ISS
Food industry Food processing, preservation ESA Mediet experiment
and nutrition
(continued)
5.4 Targeted Markets 83

Table 5.5 (continued)

R&D industry sector Industrial applications Market size
Novel sectors
Advertising Pepsi adverts Pizza Hut advert on the Proton
Pizza Hut on Proton launcher launcher
Space yoghurt Richard Branson Volvo advert
Space beer
Space art and poetry Culture
Gaming Virtual lunar gaming Open source software similar to
Movies Board games Linux. Having open source
TV shows Space Wii results in reducing costs, sharing
information, preventing duplica-
tion of data
a
The objectives of ERISTO are to develop innovative models of osteoporosis either in vitro or
in vivo using the unique benefit of space environment to provide mechanical stress free
experimental conditions and to improve diagnosis, prevention and treatments of this disease
(ESA 2010)

Primary market sectors Secondary market Industrial

sectors applications

Drug development
Cell and tissue Osteoporosis
engineering Drug development
R&D markets Bone measurement
R&T
Equipment
Biotechnology Osteoporosis Preventive therapies
Medical equipment
Health Sports equipment
Nutrition Medical equipment
Environment Hip, spine, ultrasound,
Earth observation In-vivo diagnostics
New materials and protection
Food preservation
Emerging markets Lighter and stronger processing
materials
Education Space games
Media PC games Mobile
Advertising Movies, images Board games
TV shows Space games
Space tourism
Entertainment Astronaut training
Space tourism
Space Exploration Flight tourism Flight tourism
Parabolic flights
Space cosmetics Testing Advertising MIG flights
Pilot training
Publications

Fig. 5.4 ISS targeted markets (Tkatchova, Future Trends in Space Commercialization 2013)

For the R&D markets, non-space customers will have different value chains in
their industries. Furthermore, as already discussed in Chap. 2, non-space companies
will have difficulties to understand the benefits of microgravity research.
Primary market segments could be grouped into R&D markets and emerging
markets, as presented in Fig. 5.4.
The new markets that have started to develop in addition to commercial crew
and cargo transportation markets are in-orbit satellite servicing, 3D printing on
board the ISS, space weather and debris services prevention. The 3D printing
experiment Zero-G means that astronauts could fix and upgrade experiments on
board the space stations, one of the first tools printed on board the station being a
ratchet wrench. Certain materials for 3D printing could be launched to the ISS while
others could be recycled.
84 5 Commercial Space Station Activities

New drug development for treating osteoporosis is a success story, e.g. the Prolia
drug for treating osteoporosis which can be used by women at risk of bone fractures
or the encapsulation experiment on board the ISS that led to the development of a
new cancer preventive treatment (Smith 2013).
The R&D markets of health, biotechnology and food could be interrelated, for
example, the markets in biotechnology. The microgravity environment provides
new opportunities for scientific research in biomedical engineering, tissue engi-
neering, osteoporosis, biomedicine, cell growth, cartilage degeneration and
microencapsulation.
The lack of gravitational forces supports the process of 3D printing and in
addition offers the unique opportunity to print tools or parts that are needed for
performing research on board the space station. Companies like Made in Space
offers the full portfolio of 3D printers. For example, the additive manufacturing
facility will print with a wide range of polymers and is designed to last the entire
lifetime of the space station. In addition they also offer the possibility of a material
recycler. The use of 3D printing on board the space station will offer customers the
opportunity to select hardware they want to be printed on board the station,
avoiding the launch of this hardware to the ISS.
The absence of gravity could speed up the selection of drug candidates for new
drug developments, while companies can test biological models and their technol-
ogy, such as bioreactors. During spaceflight, astronauts experience health problems
such as loss of bone and muscle mass which allows for research in the area of
osteoporosis. Astronauts lose around 1% of bone mass per month, and this bone loss
in microgravity is faster than that of osteoporosis patients on the ground, which
makes possible to observe the processes taking place. Medical solutions could be
found to support ground-based osteoporosis research, for example, in the develop-
ment and testing of bone scanning instruments on astronauts and administering new
drug development for osteoporosis. These medical devices developed for bone
scanning in osteoporosis could, for example, be successfully tested on board of
the ISS.
Other success stories relate to the development of protein crystallization
research that resulted in the creation of a product called Vicetris for treating
hepatitis C.
Companies flying commercial payloads may be interested in broadcasting
images of their instruments working on the ISS. Potential customers can order a
bundle of services from R&D and emerging markets (Tkatchova S., From Space
Exploration to Commercialisation 2006).
Through the exploitation of existing commercial opportunities, companies could
increase their competitive advantages, sales and technology innovation. The suc-
cessful development of these industrial applications (i.e. osteoporosis) could be
beneficial to future space missions. The development of preventive therapies for
osteoporosis for astronauts could be beneficial to long-duration flights in particular.
5.5 Market-Driven Trends 85

5.5 Market-Driven Trends

Private companies are developing new technologies on board the ISS, with the USA
being in the frontline in attracting private companies to offer commercial technol-
ogies and services. An inflatable space station module (e.g. BEAM module) was
designed, developed and docked to the ISS programme, and new concepts are
investigated for attaching fully commercial modules to the space station as a
basis for future fully commercial space stations. The Dragon lab concept is about
the future transformation of the Dragon spacecraft into a microgravity laboratory
that will carry week-long experiments in LEO.

5.5.1 USA

Companies aiming at constructing and operating commercial space stations will be

targeted also by the national space agencies of countries with limited spaceflight
programmes but with interest to fly their own astronauts and experiments in
microgravity environment. Certain companies target this market, and according
to expectations, there will be an initial demand for 30 flights for the first commercial
space station, followed by a demand for 4560 flights, once the market develops.
Although various assumptions for the market demand of commercial space station
services circulate in the public sphere, these companies will have to develop new
markets and sustainable business cases and be able to secure a solid base of
customers.

5.5.1.1 Bigelow

Companies like Bigelow have won contracts with NASA for testing an inflatable
module on the ISS. Their objective with the BEAM module is to demonstrate the
viability of inflatable or expandable habitat technology. The module was docked to
the ISS with Canadarm2 and in May 2016 was successfully inflated, increasing by
an extra 16.0 m3 the living space of astronauts in the future. Astronauts opened the
module and have been monitoring it.
This module is the first inflatable module docked to the space station. The
successful technology demonstration paves the way to future inflatable module
development for commercial space stations and construction of lunar habitats. In
the long term, Bigelow will aim at launching a space station with two inflatable
modules. For example, Bigelow is developing an Expandable Bigelow Advanced
Station Enhancement (XBASE) under a partnership with NASA for the Next Space
Technologies for Exploration Partnerships (Fig. 5.5).
86 5 Commercial Space Station Activities

Fig. 5.5 Bigelow Space Station (Credits: Bigelow Aerospace)

Once the technology of inflatable modules has sufficiently matured for human
spaceflight, the companies constructing these inflatable modules will have to decide
what types of experiments to integrate in them and how to use these modules
(Fig. 5.6).
The launch of inflatable modules to the ISS will influence the demand for cargo
transportation to the space station. Space agencies using inflatable modules will
have a reduced demand for mass launched to the ISS. This will result in impacting
the launch industry as there will be a reduced demand for heavy launch vehicles.
A change in the paradigm of the launch space industry will be observed.

5.5.1.2 SpaceX

SpaceX was created in 2002 with the objective to develop and provide low-cost
crew and cargo transportation services. The company not only won several NASA
COTS contracts for providing crew and cargo launch services to NASA but was the
first to build a private transfer vehicle and dock it to the ISS. In 2014 it won a NASA
contract of $2.6 billion for flying astronauts to the ISS (Space-X 2015). It was also
the first private company to launch several satellites in space and then return its
rocket first stage back to the launch pad (Space-X 2015), thus challenging the
traditional paradigm of space industry (Fig. 5.7).
SpaceX became successful due to their rapid learning with Falcon 1 and their
approach to quickly improve the design. They had three unsuccessful launches of
Falcon I, and by the fourth launch, the company was almost broke. The company
5.5 Market-Driven Trends 87

Fig. 5.6 BEAM module docked to the ISS (Credits: Bigelow Aerospace)

Fig. 5.7 The SpaceX Dragon commercial cargo craft is grappled by the Canadarm2 (Credits:
NASA)

produces in-house more than 80% which permits them to save sufficient funding
from subcontracting and fully control the production process. The steady stream of
revenues from NASA COTS CRS contracts has allowed the company to get the
Falcon 9 and Dragon capsules in the pipeline stage. The company focuses on the
generation of economies of scale and on attracting a number of customers both from
private and governmental organizations. The reuse and recovery of the first stage is
88 5 Commercial Space Station Activities

still being questioned by other players, and the cost-effectiveness of this concept
still needs to be proven in the long-run.
One of the lessons learnt from SpaceX success is that hardware companies can
be profitable when they are fully in control of the production process and have a
diverse base of governmental and private customers.

5.5.1.3 Axiom

With the expected retirement of ISS, the expected retirement of the ISS companies
like Axiom plans to attach a commercial module to the ISS in 2020. The module
will probably be from Bigelow inflatable Xbase station. The company will detach it
after 2024 and construct a commercial space station, on board of which will be
flown astronauts and R&D experiments. The construction of the commercial space
station will be fully financed by private capital and host commercial and institu-
tional payloads.

5.5.1.4 NanoRacks

NanoRacks was created in 2009 with the objective to provide payload design/
development and integration on board the ISS. Nanoracks aims at rapid delivery
of experiments to the ISS and offers low-cost payload design, development and
integration services to non-space companies. The company realized that the ISS
was underutilized, and there is an opportunity to fly a dozen CubeSat experiments
on board the ISS. By 2016 they deployed 130 CubeSats. On the other hand the
company realized that universities, SME and R&D companies will be able to afford
to pay lower prices for small payloads that could easily be integrated in ISS
mid-deck lockers (MDL).
NanoRacks took the best approach for dealing with NASA and signed an SAA,
in 2009, for the CubeLab platform for cooperating with NASA. The objective of
this SAA was that NanoRacks should utilize the ISS installing its CubeLab platform
for performing educational and low-cost microgravity research. Another interesting
SAA which NanoRacks signed with NASA in 2016 was for the installation of a
commercial airlock in 2019. The commercial airlock is a result of the NanoRacks
and Boeing partnership and will be used for the deployment of CubeSats. Under the
SAA the NanoRacks experiments are completely self-funded, and the company
becomes a customer of NASA. For example, NanoRacks plate reader cost around
USD500,000 and was utilized for biochemistry, stem cell and microbial research.
NanoRacks made a commitment that if the plate reader does not work it will give
back to NASA the money for it. NanoRacks also self-funded a NanoRacks-Protein
Crystal Growth-1 experiment that aims a growing protein crystals in space using a
commercial of the shelf (COTS). Twenty-five (25) CrystalCards are sent to the
5.5 Market-Driven Trends 89

International Space Station (ISS), containing approximately 10,000 individual

microgravity protein crystal growth (PCG) experiments housed in a 3U
(10X15X20 cm) NanoRacks NanoLabsmall cube modules that house science
experiment on ISS. After 70 days on board the ISS, the results of the returned cards
showed 16 of 25 (64%) having crystals, compared to 12 of 25 (48%) of the ground
controls (NASA, International Space Station 2016b).
The company is successfully diversifying its customer base working with
NewSpace customers, as in the case of partnering with Blue Origin for the provision
of standardized payload accommodations for experiments flying on Blue Origin
New Shepard sub-orbital vehicle.
The NanoRacks company will install commercial airlock for deploying
CubeSats from the ISS. Other private companies may also aim at installing com-
mercial platforms on board the ISS. For example, NanoRacks will install an
external payloads platform, as presented in Fig. 5.8.
Companies like Teledyne Brown are developing Multi-User System for Earth
Sensing referred to as MUSES as part of their commercial digital business (NASA,
International Space Station 2016b).
Others like Hamilton Sundstrand signed an agreement with NASA to install a
water recovery system on board the ISS based on the Sabitier system; the agency
will be paying only for the water as a service (NASA, Water Production in Space:
Thirsting For A Solution 2015a).
With the successful integration of these commercial platforms on board the ISS,
there will be increased opportunities for various non-space customers to use them
and test their experiments in microgravity environment.

Fig. 5.8 NanoRacks external payloads platform (Credits: NanoRacks)

90 5 Commercial Space Station Activities

5.5.2 Europe

In 2015 in Europe, ESA launched a call for bottom-up ideas for user-driven
utilization of LEO platforms on the ISS for sustained exploitation for advancing
research, technologies and operations knowledge (ESA, Call for ideas: Space
Exploration as a driver for growth and competitiveness: opportunities for the
private sector 2015). The agencies welcomed innovative partnership ideas for the
following activities:
Improved (e.g. lower cost, shortened time to access, etc.) and sustained post-ISS
access for European users to perform research in LEO
New ideas for ISS utilization in order to maximize its potential to drive innova-
tion, economic development and inspiration to prepare Europes future role in
the international human exploration endeavour
With this call ESA seeks to encourage user-driven exploitation of LEO
infrastructures, future lunar and Mars exploration and joint R&D with the industry.
In the long-term future, there could be partnerships between national space
agencies and industry for exploiting ideas for user-driven exploration in the
context of future microgravity research, space debris and in-orbit satellite services
or future lunar programmes.
One of the major challenges to the NewSpace companies working on developing
commercial space transportation crew and cargo vehicle services for the ISS will be
the retirement of the ISS in 2024 or 2028 at the latest. The companies involved in
the development of commercial cargo transportation vehicles like the Dragon,
Cygnus or the Dream Chaser Cargo vehicles will face bigger challenges in finding
customers for their transfer vehicles after the retirements of the ISS.

5.6 Conclusions

In 2016 NASA encouraged the creation of a competitive environment through

opening this opportunity to the industry. The opportunity poses risks for the agency
since the companies bidding for NASA COTS contracts may fail to attract sufficient
private funding.6 The companies bidding could also face high technical risks in the
development of the launches and vehicles, as they would start developing them
from scratch. Today we witness inflatable commercial modules docked to the ISS
and concepts of NewSpace companies for installing commercial platforms on board
the space station. These platforms will offer commercial opportunities to non-space

6
In the early days of the NASA COTS programme, the agency signed an agreement also with
Rocketplane Kistler, allocating to USD207 million, the company failed to attract the private
funding, and NASA cancelled their agreement with them, following on signing an agreement
with Orbital for USD178 million.
5.6 Conclusions 91

companies to access microgravity environment. Regardless of the successful evo-

lution of the commercial crew and cargo services, the retirements of the ISS will
pose a threat to NewSpace companies with cargo vehicles since it will be difficult to
find customers in the post-ISS period. The lessons learnt from MIR and ISS
commercialization may serve NewSpace companies. These lessons concern diffi-
culties related to market creation and the competition from terrestrial technologies
to which their experiments flown in microgravity may be exposed. In addition they
will face difficulties in classifying their markets and pricing their services.
After the end of the ISS, in the USA NASA may set up a COTS programme for
encouraging NewSpace companies to launch commercial modules, while in Europe
ESA may set up a public-private partnership with the EU and the industry for
encouraging European companies to launch commercial modules that will host
microgravity experiments.
For the ISS partners, the value of the R&D research performed on board the ISS
is of critical importance for research in the areas of osteoporosis, muscle and bone
physiology, neuroscience, new materials and processes and biotechnology. In
addition to the commercial crew and cargo transportation markets, new markets
have started to develop, e.g. 3D printing on board the ISS and space weather
services. The use of 3D printing on board the space station will offer customers
the opportunity to select the hardware they want to be printed on board the station
thus avoiding the launch of this hardware to the ISS.
In the post-ISS era, R&D companies and institutional customers may fly their
experiments on board commercial space stations as the Axiom one or the Russian or
Chinese space stations.
Space agencies will encounter the challenge on how to manage best the time left
on the ISS in order to meet the demand for LEO services to sustain commercial
supply of LEO supply of services (e.g. transportation, payload integration ones,
etc.). Another issue worth considering is whether space agencies can encourage the
continuation of private investment in LEO R&D research and beyond. Certain ISS
partners may even become future customers to commercial space stations and fly
their microgravity experiments on board the commercial modules. The final ques-
tion which space agencies will face is whether the commercial capabilities devel-
oped by private companies can be used for future lunar or Mars missions.
Chapter 6
Space Debris Mitigation

6.1 Introduction

Space debris is orbital waste from satellites or space stations and is defined as all
nonfunctional, man-made objects, including fragments and elements thereof in
Earth orbit and those re-entering the Earths atmosphere. Man-made space debris
dominates over the natural meteoroid environment, except around millimetre sizes
(ESA, Space Debris 2013b). They consist of everything from the entire spent rocket
stages and defunct satellites to explosion fragments, paint flakes, dust and slag from
solid rocket motors, coolant released, deliberate insertion of small needles and other
small particles (Smith 2007).
Over the last 60 years of space activities, around 7200 satellites have been
launched corresponding to a mass of more than 8 tons currently in orbit. There
are 23,000 human made objects larger than 10 cm in orbit, both dead and opera-
tional, and there are around 750,000 smaller than 1 cm objects orbiting Earth. Of
those objects, 75% are catalogued and are in low Earth orbit (LEO) posing a threat
of collision either with the International Space Station or with operational satellites
(Team E. C. 2016).
Sometimes the speed even of the smallest space debris could reach 50,000 km/h
and could cause catastrophic events. The re-entry of objects from LEO happens due
to natural decay, and although the Earth residual air drag keeps certain areas clean,
debris at high altitudes than 480 km takes a few months to clean up.
One of the most famous cases of space debris was the incident on January
11, 2007, when the Chinese tested their anti-satellite weapon (ASAT) and space
debris destroyed one of their non-operational weather satellites FY-1C. The
destroyed satellite was in polar orbit at an altitude of about 865 km and a mass of
around 750 kg. The Chinese meant to demonstrate their military capabilities to the
world. Instead, this resulted in the creation of more than 2300 pieces of traceable
debris (approximately golf ball size or larger), over 35,000 pieces, the size of 1 cm

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94 6 Space Debris Mitigation

or larger, and 1 million pieces 1 mm or larger (Chapter 9, An Analysis of Two

Space Business Opportunities 2011).
Another well-known case happened in 1996 when the French military satellite
Cerise was struck several times by an Ariane upper-stage fragment, damaging the
Cerise gravity gradient stabilization boom. In 2009 the crash between the Iridium
communications satellites (Iridium 33) and Kosmos-2251 made headlines. They
collided at an approximate altitude of 789 km with an average speed of 42,120
km/h. During the collision the Iridium satellites were operational, while the Russian
ones had been out of service for 2 years (Fig. 6.1).
The problem with the space debris generation and increase is growing. Over the
last few years, the issue of space debris has bred serious concern in connection with
the safety of cosmonauts/astronauts on board the ISS, of satellites and aviation.
Uncontrolled entries of space debris happened already in the summer of 1979 when
the space station Skylab re-entered the Earths atmosphere earlier than expected
and flew over Australia. At present approximately 70% of re-entries of intact orbital
objects are uncontrolled, corresponding to about 50% of the returning mass (i.e. 100
metric tons per year). On average, there is one spacecraft or rocket body
uncontrolled re-entry every week, with 40 large space objects, bigger than 800 kg
re-entering Earths atmosphere each year and 1040% surviving the re-entry and
impacting the Earths surface (Matteo Emanuelli 2015).

Fig. 6.1 Space debris (Credits: ESA)

6.1 Introduction 95

Future Large Constellations

Constellation

Satellites 720 2960 4000+ 4600

Altitude 1200 km 1200 km 1100 km 1400 km

Sat.Mass 150kg > 100kg 390kg < 200kg

Fig. 6.2 Future large constellations (Credits ESA)

The problem may grow with the expected growth of future large constellations
of microsatellites and nano-satellites using the Ku- and Ka-band frequencies
(Fig. 6.2).
The expected growth of satellite constellations will result in increased space
debris and complete congestion of (LEO) and geostationary orbits.
The annual risk for aviation due to uncontrolled re-entry has been approximately
quantified as 3  10 4 in 2006 and for air traffic doubled every 15 years (Matteo
Emanuelli 2015). According to the analysis performed by Sgobba during the
Columbia accident, the probability of fragments hitting an airplane was 1/1000
for commercial airliners in the area and 1/100 for general aviation (Sgobba 2013).
The movie Gravity demonstrated very well the threat posed by space debris
and the Kessler Syndrome. The Kessler syndrome is a scenario in which the volume
of space debris is so high that the objects in orbit are frequently struck by space
debris. One of the expected results from this scenario is that space debris becomes a
direct threat to space exploration, potentially transforming LEO into a graveyard
for old satellites. It is possible that within 5 years discussions will be held on
governmental level on how to solve congestion of space debris in LEO, as
congestion in LEO will be much more dangerous and threatening due to its
uncontrolled nature than congestion in airspace. Governments owing satellites
and space stations in orbit may even start consultations with their national space
agencies and national air traffic controller organizations for setting up centres for
space traffic management.
Space debris accidents will raise complex legal questions related to liability and
damages. This additional complexity may even result in higher launch prices due to
the liability of the launching state as stated in the Outer Space Treaty dealing with
these questions.
Countries such as Japan are also active in raising the issues and discussing them
at the international symposium on ensuring stable use in outer space, held in Japan
with major themes related to Space Situational Awareness. Possible solutions for
reducing space debris impacts are dealt in four different ways (Baldesi 2011):
96 6 Space Debris Mitigation

Avoidancemoving the spacecraft to avoid collision with debris.

Protectionspace debris shielding of the spacecraft in LEO depending on space
debris size; for debris bigger than 1 cm > 10 cm, there is no solution for the
expected significant damage, and for debris bigger than >10 cm, there is an
avoidance manoeuvre that space agencies usually undertake.
Removalremoval of large objects from highly populated orbits, by different
means, such as use of electrodynamic tethers, small spacecraft capturing space
debris for de-orbiting them or using laser blasters to pulverize space debris.
Preventiondeorbiting spacecraft older than 25 years or parking them in so
called graveyard orbits.
Presently, it is difficult to predict which of the four approaches will generate
most services, based on space debris solutions. In 2050 it is possible to have
national space traffic centres dealing with space debris avoidance and have
NewSpace companies developing Smallsats that dock to dysfunctional satellites
in order to de-orbit or capture them. Therefore, the potential market for removing
dysfunctional satellites could experience unexpected growth and overtake both the
approaches for protection and prevention from space debris. In order to develop
space debris removal solutions and services, NewSpace companies need to have an
economic incentive to invest in developing technological solutions for space debris
avoidance, protection, removal and prevention. Certain companies may even
exploit ideas like constructing space elevators, such as the Japanese Obayashi
company that wants by 2050 to build a space elevator carrying passengers up to
36,000 km above Earth (Wall 2012).
A number of questions arise in connection with the congestion problem of space
debris in LEO and other orbits. Is it possible to have economic incentives to
encourage private companies to address the problem of removing space debris?
Can there be space debris services, tools and solutions developed by private
companies? Who are the customers and the targeted markets? Is it feasible to
have space debris removal missions leveraging on commercial partnerships
between space agencies and industry? Is the COTS model relevant to space debris
mitigation as well? How is space debris mitigation going to be financed? How can
NewSpace companies contribute to space debris mitigation? Will there be eco-
nomic benefits for the global economy from creating a space debris service and
solutions? (Fig. 6.3).
With the increase of commercial space transportation services and the launch of
Smallsats and CubeSats, there will be a growing threat to human life and satellites.
In order to avoid the growth of space debris collisions due to increased commercial
launch activities, national governments together with the industry could propose the
creation of a bounty system for active space debris removal (Alexandrova 2012).
Under this idea, owners of debris need to assign their property rights under the
current international law to the fund and set up a large prize similar to the Google X
Prize in order to encourage the development of de-orbiting technologies.
6.2 Stakeholders 97

Fig. 6.3 Space debris (Credits: ESA)

6.2 Stakeholders

NewSpace companies may exploit the emerging space debris market, in which the
prime stakeholders will be space agencies, meteorological, defence agencies,
commercial satellite operators, insurance companies that stand to experience loss
due to space debris damage. The global satellite industry (Group T. T., State of the
Satellite Industry Report 2015) has an expected growth rate of 4%, which
corresponded to a market of USD203 billion in 2014. This market is driven
primarily by commercial satellite operators. Their satellite consumer services
grew by 4% in 2014 and reached up to USD100.9 billion, from which satellite
TV corresponded to a market of USD95 billion, satellite radio of USD4 billion and
broadband services of USD2 billion.
Today in 2016 there are several companies like Tether Applications and the
Japanese Astroscale which consider developing innovative on-orbit solutions for
removing space debris. In the long-term future, parallel with the future constella-
tions, there may emerge a number of companies providing space debris removal
services.
Presently in 2016, space agencies like ESA, JAXA and others are investigating
ways for space debris removal and prevention.
98 6 Space Debris Mitigation

Fig. 6.4 Space debris stakeholders

Nevertheless, with the increased growth of space debris, the opportunity for
private companies to develop and offer space debris removal and prevention
services will grow (Fig. 6.4).
National governments, together with ESA and EU, could consider developing
programmes that will encourage further research studies in space debris removal
and prevention. Future H2020 EU calls for projects may invite ideas for in-orbit
satellite servicing and space debris prevention and mitigation.
ESA, national space agencies and national governments can best map the
requirements and understand the challenges in space debris removal and prevention
that need to be considered. Traditional space companies are bound to be actively
involved in these projects, and legal companies may follow suit with the growth of
those activities.

6.3 Space Debris and Aviation Safety

The growing threat of space debris to the aviation industry has become a topic of
strong consideration in the last 15 years. The annual risk for aviation due to
uncontrolled re-entry has been approximately quantified as 3  10 4 in 2006
and for air traffic doubled every 15 years (Matteo Emanuelli 2015). The threat of
6.4 ESA Space Debris Programmes 99

debris to aviation has always existed. For example, in 1996, a Chinese Boeing
757 flying from Beijing to Wuhan had to make an emergency landing after the
exterior glass of the cockpit was cracked by an unidentified object at 9600 m.
In March 27, 2007, a wreckage of the Russian Progress 23 ship was seen by an
Airbus A340 of LAN Airlines, the pilot estimated that the debris was 8 km away
from the aircraft and heard a sonic boom as it passed (Matteo Emanuelli 2015).
Another example goes back to January 2012, when the Russian Phobos-Grunt
made an uncontrolled entry, and the European airspace was closed for 2 h
corresponding to a calculated cost of 20 million euros (Matteo Emanuelli 2015).
To deal with the situation, governments owning satellites and space stations in
orbit may even start consultations with their national space agencies and national
air traffic controller organizations for setting up centres for space traffic
management.
In 2016 FAA in the USA began considering the possibility to inform commer-
cial, civil and foreign satellite operators of possible in-orbit collisions in coopera-
tion with the office of FAA commercial space transportation (Werner 2016). Since
FAAs ambitious goal is quite costly, it will have to work out a financial scheme by
which to fund the provision of this information type of service.
In Europe, it is ESA that deals seriously with the issue of space debris chal-
lenges. For example, ESA has already started working on setting up a Re-entry
Direct Broadcasting Alert System (R-DBAS) for developing a device that will
directly communicate with airplanes regarding dangerous areas due to falling
space debris (Sgobba 2013). ESA has also launched several R&D space debris
programmes, to encourage the creation of new technological solutions and services
for space debris mitigation.

6.4 ESA Space Debris Programmes

In order to respond to the growing threat of space debris, governments and space
agencies have defined clear requirements for space debris mitigation. In response to
the space debris challenge, ESA has already set up a Clean Space initiative that will
encourage the development of novel technologies and approaches for the removal
of space debris and for the design of non-debris creating missions. It is worth noting
that through this initiative, the agency aims to foster the transformation of the
environmental challenge into business opportunities for the European space
industry.
ESA Clean Space initiative aims at providing an insight into the technological
advancement1 achieved to date in the fields of space debris mitigation (SDM) and

1
Other national space agencies like CNES are researching a so-called orbital debris chaser concept
that is equipped with a 30 to 50 km long tether and is used for capturing space debris.
100 6 Space Debris Mitigation

active debris removal (ADR). In response to the above requirements, the Clean
Space initiative will be built upon three building blocks (ESA, Clean Space 2016a):
EcoDesigndesigning to address environmental impacts
CleanSatdesigning to reduce the production of space debris
eDeorbitremoving a large piece of space debris from orbit, such as the Envisat
satellite
The mission that provides the biggest opportunities for the creation of new
markets and services is the e.Deorbit mission. The e.Deorbit mission will be the
worlds first active debris removal mission that will aim at developing technologies
in the following areas: non-cooperative rendezvous and formation flight, capture
and control of large non-cooperative objects and development of competencies in
adaptive guidance, navigation and control (ESA, E.DEORBIT 2016b). The idea is
that after ESA develops the technology platform and demonstrates its feasibility,
private companies will use this technology platform or a similar one for removing
large old satellites from orbit. It is still unclear what approach will be chosen by
ESA to encourage the creation of new markets and services for space debris
prevention.
One possibility for ESA is to set up programmes under which private companies
could develop solutions to terrestrial problems using space-based technology (tele-
communications, earth observation and navigation systems). Another one is for
ESA to lease the platform for de-orbiting old satellites to private companies. This
scenario could be viable only if the private companies have strong economic
incentives to do it. A third scenario concerns the early phases of the missions
which are involved in the development of this platform, during which market
studies should be initiated about target customers as end-users. Thus, once the
platform is operational they could become the players responsible for its
commercialization.

6.5 JAXA Studies

Other space agencies like JAXA are focused on ideas for using electrodynamics
tethers for space debris removal. JAXA is working on a debris removal vehicle with
multiple EDT systems. The vehicle approaches a debris and installs an EDT system
on it which activates itself in a prescribed sequence and deploys the tether. The orbit
of the debris can be lowered by the EDT thrust until it re-enters atmosphere (JAXA
2013).
Companies like Nitto Seimo Co are looking at learning from the experience of
fishing net companies to develop technologies to clean up space debris. The
Japanese Nitto Seimo Co, a company with a fishing net manufacturing experience,
has already developed a space net, measuring 1 km long and 30 cm wide and made
of metal fibre. The idea is that the launched satellite will unveil the wire net at a
length of 300 m which will generate a magnetic field to move the debris (Daily
2014). This Japanese technology development has been possible due to the
6.6 Targeted Markets and Services 101

agreement signed between JAXA Japanese space agency and the Nitto Seimo Co
company. The idea behind this agreement was to pave the way to the creation of
new services, solutions and markets (e.g. in orbit satellite servicing). Unfortunately
the experiment didnt work. Nevertheless the creation of new markets for space
debris removal will results in increased competition between companies developing
space debris removal concepts and technologies in the far future.

6.6 Targeted Markets and Services

Space agencies should be the first to create programmes and set up the technology
demonstration platforms for space debris avoidance, protection, removal and pre-
vention. As mentioned earlier, it is early to predict which domains will grow and
develop best, yet, there are already a number of companies initiating various
projects for removal of space debris and exploiting those market opportunities.
Certain companies study the opportunities for launching autonomous spacecraft
with an electrodynamic tether that can capture debris and move them into grave
orbits, proposed by Tether Application Inc. (Inc. 2013). Others try to learn from the
experience of fishing net companies to develop technologies for cleaning up space
debris. Space agencies should encourage the creation of programmes under which
space companies could develop technology solution and services to that effect
(Fig. 6.5).

Fig. 6.5 ESA Clean Space initiatives (Credits: ESA)

102 6 Space Debris Mitigation

They could target the development of services around the Clean Space initiative,
particularly in the context of active debris removal. Certain companies may spe-
cialize in developing models for predicting space debris growth, risk analysis and
for capturing debris. Knowledge from the other industries like robotics, IT and the
fishing industry could be used to develop prediction models, technology solutions
and tools for space debris removal and prevention.
The space debris market is a transversal market, and its growth will result in the
development of technologies and concepts such as in-orbit satellite servicing, like
refuelling, repairs and many others.
The immediate market opportunity could be exploited by NewSpace companies
with competencies in constructing and operating CubeSats and by companies
providing commercial space transportation services. Space agencies could leverage
the creation of public-private partnerships, similar to the ones created by ESA or EC
with joint ventures or the NASA COTS model.
There will be a need to develop approaches for financing space debris removal
like a bounty system that will estimate the potential revenues for private companies
that are involved in space debris removal. The proposed framework computes the
expected damage that each space debris object can cause to existing orbital systems
as a function of debris mass, velocity, orbit and other characteristics in conjunction
with the orbit, size, and monetary value of orbital systems in operation. Using these
damage estimates, we then assign to each unit of space debris a monetary bounty
amount that could be paid by an international space debris bounty fund to the
company that de-orbits the debris.
In order to address the growing space debris threat, space agencies will have to
set up programmes with economic incentives to attract private companies to
develop solutions for space debris removal.

6.7 In-Orbit Satellite Servicing

In-orbit satellite servicing is about repairing, servicing and refuelling satellites. It is

widely used in space station repair and servicing, e.g. the famous Hubble telescope
which has already been serviced and repaired three times in-orbit. The first time the
light shield of the telescope was repaired, the second time the installation of the
New Outer Blanket Layer was serviced and a cooling system external radiator
serviced. Although the Hubble telescope had not been designed to be serviced, the
three in-orbit satellite missions were successful (Fig. 6.6).
Another area in which NASA encourages in-orbit satellite servicing is the
construction of a so-called Robonaut (R2) which will operate internally at first
and then be used to help astronauts during their external work outside the space
station (Fig. 6.7).
Organizations like DARPA are investigating the development of a Phoenix
programme whose objective is to reduce the cost of space-based systems by
developing and demonstrating new satellite assembly architectures and delivery
6.7 In-Orbit Satellite Servicing 103

Fig. 6.6 Hubble telescope repair (NASA, On-Orbit Satellite Servicing Study 2010)

Fig. 6.7 Robonaut (R2) (Copyrights: NASA)

systems. In addition, valuable components from retired, non-operating satellites in

geosynchronous orbit (GEO) satellites will be re-used. The programmes goal is to
demonstrate the ability to create new space systems at a greatly reduced cost. The
Phoenix project is going beyond traditional servicing concepts, such as refuelling
or relocating space assets that have run out of fuel. Instead, to seek a new way to
create value on- orbit today by testing remote on-orbit assembly techniques. In case
it is possible to assemble space systems on-orbit, in even simple terms, then there is
hope to be able to lower the cost of new space systems and change the economic
model for access to space. The idea is to re-use assets already in orbit and increase
104 6 Space Debris Mitigation

the return on investments in space assets, re-using (with permission) high-value

components that have already been placed in space (Barnhart 2013).
Private companies (e.g. SSL) are also investigating various ideas, like MDA are
looking at the Vivisat mission for satellite servicing. Nevertheless, at present it is
mostly space agencies that invest in developing in-orbit satellite servicing compe-
tencies. However, with the growth of the space debris removal markets, private
companies will inevitably become actively involved in the development of in-orbit
satellite servicing capabilities.

6.8 Conclusions

The growing threat to human life, to satellites and to the aviation industry from risks
of space debris collision demands the undertaking of clear steps for debris mitiga-
tion. These steps give rise to the following questions: are there any economic
incentives that could encourage private companies to address the problem of
removing space debris? Can there be space debris services, tools and solutions
developed by private companies? Which are the customers and the targeted mar-
kets? Is it feasible to have space debris removal missions leveraging on commercial
partnerships between space agencies and the industry? Is the COTS model also
relevant to space debris mitigation? How is space debris mitigation going to be
financed? How can NewSpace companies contribute to space debris mitigation?
Are there economic benefits for the global economy from creating a space debris
service and solutions?
Governments owning satellites and space stations in orbit may even start con-
sultations with their national space agencies and national air traffic controller
organizations for setting up centres for space traffic management.
NewSpace companies need to have the economic incentive to invest in devel-
oping technological solutions for space debris avoidance, protection, removal and
prevention.
The ESA Clean Space initiative aims at providing an insight into the technolog-
ical advancement achieved to date in the fields of space debris mitigation (SDM)
and active debris removal (ADR).
In the future ESA could set up a programme, similar to the ESA ARTES 21 IAP,
under which private companies would develop solutions to terrestrial problems
using space-based technology (telecommunications, earth observation and naviga-
tion systems). ESA could also lease to private companies the platform for
de-orbiting old satellites provided private companies have strong economic incen-
tives to do it. Thus, once the platform is operational they could become the
commercial players responsible for its commercialization. Knowledge from other
industries like robotics, IT and the fishing industry could be used to develop
prediction models, technology solutions and tools for space debris removal and
prevention.
6.8 Conclusions 105

Possible approaches for financing space debris removal include the proposed
bounty system for space debris removal to help estimate the potential revenues for
private companies engaging space debris activities.
This environmental challenge is a new market opportunity not only for the space
industry but also for companies developing different concepts for space debris
removal and avoidance. In addition it may result in the development of new
competencies in in-orbit satellite servicing.
Space agencies will probably encourage the creation of public partnerships for
future development of space debris removal concepts and exploitation of new
market opportunities.
Chapter 7
Sub-orbital Markets

7.1 Introduction

The dream of sub-orbital flights started to become a reality in 2004 when Burt
Rutan won the Ansari X prize with SpaceShipOne that was dropped by the White
Knight motherplane (built by Scaled Composites). Just before winning the prize,
Richard Branson announced the creation of a partnership between Virgin, Scaled
Composites and Mojave Aerospace Ventures called Virgin Galactic that aimed at
creating a sub-orbital space tourism business. He initiated the emergence of a
completely new spaceflight industry, marked by the creation of new sub-orbital
reusable vehicles for crew and cargo transportation.
The successful flight of SpaceShipOne inspired the setting up of space entrepre-
neurships in the USA as well as in Europe which leads to the appearance of
European sub-orbital companies, such as Virgin Galactic, Copenhagen Suborbitals
and Booster Industries, investing in the development of new sub-orbital vehicles
and exploiting new market opportunities. This encouraged certain European coun-
tries to1 research possibilities to build spaceports, such as the Swedish spare port
and the Dutch Caribbean spaceport.

7.2 Stakeholders

In 2016, the main actors in the sub-orbital market were private investors, manu-
facturers/operators, customers, service providers, traditional space companies,
insurance and legal companies and customers. In contrast to the traditional space
industry, in which space agencies encourage the growth of national space compa-
nies, there are a number of private investors in the emerging sub-orbital industry,

1
Swedish spaceport, the Dutch Caribbean spaceport.

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108 7 Sub-orbital Markets

Fig. 7.1 Sub-orbital stakeholders

e.g. Paul Allen, Richard Branson, Jeff Bezos, etc. They are investing in sub-orbital
vehicle development, provision of new sub-orbital services, development of new
markets and definition of new business models for creating sustainable SRV
operations, as presented in Fig. 7.1.
Manufacturers/operators and investors in the sub-orbital space industry first
emerged in the USA and were followed by Europeans, such as Virgin Galactic,
Booster Industries, Copenhagen Suborbitals and many others. In addition, the
competition between the manufacturers/operators and service providers will
increase in certain markets (the astronaut markets), and interdependencies between
stakeholders will emerge.2 The development of sub-orbital vehicles evolves
through phases, and different stakeholders are at different stages of development,
as presented in Fig. 7.2.
In 2016, Blue Origin achieved successful last three flights of their vehicle New
Shepard.3 While Virgin Galactics Unity sub-orbital vehicle is expected to shortly

2
Certain authors recommend the use of Game theory and value net approach for analysing the
evolution of the different roles of the players in the human spaceflight training industry (Henwood
2014).
3
The first flight on November 23, 2015, reached 100.5 km; January 22, 2016, reached 101.7 km;
and April 02 reached 103.8 km.
7.2 Stakeholders 109

Fig. 7.2 Sub-orbital vehicles and stages of development

enter in the operations phase, others, as the one of Booster Industries, have entered
the planning and design phases.
The targeted customers for sub-orbital services are quite diverse. In 2004, after
the successful flight of SpaceShipOne, it was strongly believed that wealthy
individuals and private companies would be the prime customers for using the
services of sub-orbital vehicles. Regardless of the strong interest of private citizens,
manufacturers/operators started to diversify their services and look at developing
additional services that could use their vehicles for parabolic flights, EO services
and microsatellite deployment (Table 7.1).
The sub-orbital companies in the USA and Europe have different opportunities
for sub-orbital development and operations. In Europe, they have easy access to
SME space engineering competencies and research institutions willing to cooperate
but a complex legal framework due to the airspace sovereignty of EU national
states. The role of the big traditional space companies, at least in Europe, is more of
an advisory and observer role; the traditional European SME is actually focusing on
partnering with emerging NewSpace companies. If the sub-orbital R&D markets
grow successfully, an immediate need will appear for competencies in designing,
constructing and integrating experiments on board the sub-orbital vehicles, which
will make the role of traditional space companies more important.
In the USA, companies have the opportunity to have experimental flight
licences, and companies seem to have easier access to private funding in contrast
to their European counterparts. The NASA Flight Opportunity programme (see
Chap. 1) offers opportunities to research organizations to fly their payloads on
board sub-orbital platforms (e.g. Virgin Galactic, Xaero). As already discussed in
Chap. 1, this programme allows to test vehicles, build their flight reliability and
learn how to integrate R&D payloads in their vehicles. At present, there is no
110 7 Sub-orbital Markets

Table 7.1 Description of sub-orbital stakeholders, markets and potential services

Stakeholders Organizations Markets Services
Manufactures/oper- USA Space tour- Sub-orbital
ators (sub-orbital Blue Origin, XCOR, Masten Space ism/entertain- launch services
exploration) Systems, Virgin Galactic, Scaled ment Space tourism
Composites, Stratolaunch R&D markets services
Europe Earth obser- Astronaut
Booster Industries, Reaction Engines, vation training
Copenhagen Suborbitals, SXC Microsatellite Parabolic
Russia launch flights
Flying R&D
payloads
Microsatellite
deployment
Technology
demonstration
Service providers Space Adventures Parabolic Space adven-
(exploration/ Zero Gravity flights ture entertain-
orbital/sub-orbital) UP Aerospace Space-related ment services
Swedish spaceport training TV advertising
Caribbean spaceport Technology
testing
Customers Wealthy individuals companies
(sub-orbital Organizations offering seats for
exploration) competitions
Non-space customers
Space agencies or other space
research organizations using
Insurance and legal IIASL Life insurance
advice Willis Inspace Liability insur-
ance
Legal advice

alternative programme in Europe that offers the opportunity to test sub-orbital

vehicles while flying educational or R&D payloads. The implementation of the
EU Space Strategy for the development of new markets for space-based applica-
tions and services may push regulators and member states in Europe to create
possibilities for experimental flight licences and adopt a similar programme
as NASA.

7.3 Sub-orbital Reusable Vehicle Lessons

In 2004, the world witnessed a historic moment when SpaceShipOne won the
Ansari X prize for the first sub-orbital flight. SpaceShipOne was built by Scaled
Composites owned by Burt Rutan and cofinanced by the Microsoft co-founder Paul
Allen. Just a few days before winning the prize, Richard Branson announced the
7.3 Sub-orbital Reusable Vehicle Lessons 111

creation of a new venture in partnership with Scaled Composites called Virgin

Galactic that planned to offer sub-orbital flights to passengers for a price of
USD200,000. Thus, the emergence of a new industry was announced, fully financed
by private capital from investors like Paul Allen, Richard Branson, Jeff Bezos and
others. A number of companies started designing and developing sub-orbital
reusable vehicles, such as New Shepard, XCOR, SpaceShipTwo in the USA and
in Europe Copenhagen Suborbitals, Booster Industries and others (see the Chaps. 7
and 8). The environment in which the companies emerged was different in Europe
and the USA. In the USA, the companies were granted FAA experimental flight
licences for their SRV flights and had access to NASA Flight Opportunities
programme, thus enjoying the opportunity to generate a log of flight hours. In
contrast, in Europe, there are no experimental flight licences nor European
programmes that offer to sub-orbital companies to generate a log of flights. There-
fore, a number of sub-orbital European companies decided to register companies in
the USA. However, this situation may change with the implementation of the EU
Space Strategy document which is designed to encourage the development of new
markets for space-based applications and services. In the coming years, the EU
Horizon 2020 programme will provide funding for developing space applications
and flying R&D experiments on board sub-orbital vehicles in the frame of the
European research and innovation competitiveness.
In its early days, the sub-orbital space industry followed the idea to develop the
space tourism market and offer customers the golden opportunity to experience 34
minutes of microgravity. Product promotion through the use of space-related
themes was also one of the promising market segments, the Volvo promotion
advert involving Richard Branson talking about the future of human spaceflights.
The Virgin Galactics brand began to be recognized, and the Axe/Lynx deodorant
advertising demonstrated the lucrative market potential of space-related product
positioning. This potential was actually demonstrated in the 1960s and 1970s
particularly during the Apollo programme, an era when space-themed product
placement was common and even design and materials were heavily influenced,
e.g. cars.
The sub-orbital companies had to ask themselves the following: What were the
targeted markets? Who were the customers? Would their commitment generate
sufficient capital to be able partially to finance the development of sub-orbital
transportation vehicles? How could sub-orbital service providers diversify their
services and find other targeted markets? Could future economies of scale be
generated? How could sub-orbital companies partner most efficiently with tradi-
tional space companies and piggyback on their historical experience?
One of the hard lessons learnt by the sub-orbital companies in the last 12 years
has been that the creation of a space tourist market is not easy. The companies have
to consider the following questions: Is there a market for sub-orbital services? Will
space tourism and the R&D markets take off once the SRV are operational? How
many years will it take to develop these markets?
Further questions arise: Is there a market for sub-orbital services? Are there
similarities between the ISS R&D markets and the sub-orbital markets? Will space
tourism and R&D markets take off once the SRV are operational? How long will it
112 7 Sub-orbital Markets

take for these markets to develop? It should be kept in mind that so far the
development of the sub-orbital space industry has taken 12 years and that
sub-orbital companies do not have a low-risk market that could provide them
with a steady stream of revenues or permit them to survive without space agencies
support. And certain companies have underestimated the complexity and critical
importance of safety requirements.
Certain companies have underestimated the complexity and critical importance
of safety requirements.
There are some positive lessons which sub-orbital companies learnt; e.g. they
realized that the space tourism market is short term and volatile. Therefore, certain
companies started to look at using the SRV for microsatellite launches and for
flying R&D payloads on board these vehicles. The questions SRV service providers
will have to answer to future customers are as follows: Are they willing to fly their
R&D payloads on board their vehicles? Is 4 minutes of microgravity for performing
their experiments enough for their experiments?
The competitive nature of the sub-orbital industry brought some positive trends
in the new technology developments, as the successful launch of the reusable
sub-orbital vehicle New Shepard. However, in the last few years, the industry has
come under increasing pressure to start performing regular sub-orbital flights and
demonstrate its commitment to its customers. As of now, some of the NewSpace
companies involved in the industry have failed to launch regular sub-orbital flights.
Some sceptics are starting to question whether the sub-orbital market hype 10 years
earlier has been no more than just another toy for the rich. From now on, sub-orbital
companies will not only have to perform but will also have to prove that they are
capable of developing long-term sustainable markets and of creating new market
opportunities.
Likewise, SRV companies, developing new vehicles, are exposed to technology
and certification risks, combined with market and budgetary risks. This may lead to
sudden budgetary cuts due to venture capital withdrawal or change of direction of
investor interest towards safer and more profitable businesses. The lessons learnt in
the last 12 years from the SRV industry could be quite beneficial for future
NewSpace companies involved in projects relating to in situ resource utilization
(ISRU). The companies involved in projects linked to asteroid mining and space-
based resources exploitation may face similar questions.
At present, sub-orbital companies are operating in an extremely complicated
environment, in which first they need to demonstrate their capability to build and
provide safe sub-orbital flights to the public and at the same time attract and secure
private financing for building and operating their sub-orbital vehicles.

7.4 Targeted Sub-orbital Markets

In the early days of sub-orbital market evolution back in 2004, the targeted market
was human spaceflight for tourism or training. However, with the sub-orbital
vehicle development, markets like Earth observation (e.g. remote sensing), R&D
7.4 Targeted Sub-orbital Markets 113

Fig. 7.3 Sub-orbital commercial markets (Group T. T., Suborbital Reusable Vehicles: A 10 year
forecast of Market Demand 2013)

Fig. 7.4 Forecast of market demand for sub-orbital services (Group T. T., Suborbital Reusable
Vehicles: A 10 year forecast of Market Demand 2013)

payload integration and microsatellite integration began to emerge, as described by

the Tauri Group market study (Group T. T., Suborbital Reusable Vehicles: A
10 year forecast of Market Demand 2013) (Fig. 7.3).
The authors of the market study performed a scenario analysis of the expected
market demand in the markets above. The three scenarios they created are baseline
scenario, under which the sub-orbital vehicles operate in a political and economic
environment similar to the one at present, growth scenario which envisages an
increase of customers buying sub-orbital seats and a growth of the R&D payloads
flown on board these vehicles, and the constrained scenario which envisages the
worsening of the global economy (Fig. 7.4).
114 7 Sub-orbital Markets

In the three scenarios, the demand for commercial human spaceflight is expected
to be the highest, with a reference of todays scenario (e.g. baseline) of a forecast of
335 seats the first year and growing up to 400 seats by the next 10 years. This is a
realistic scenario as certain sub-orbital companies claim they have 700 expressed
registrations for flying on their sub-orbital vehicles that have been confirmed
(Galatic 2016). An earlier research performed by the Tauri Group (Group T. T.,
Suborbital Reusable Vehicles: A 10 year forecast of Market Demand 2013) claimed
that by 2012 there were around 925 seats4 booked for flight experiences. So, the
data show that the baseline scenario is quite conservative.
In addition to space tourism, there are two other important markets identified by
the authors: the basic and applied research market (e.g. R&D markets) and the
educational market. The first one corresponds to the R&D markets, which is already
mentioned in the section Commercial Space Markets Overview, concerned with
flying material science and biomedical experiments on board the sub-orbital vehi-
cles. The second one is the educational market about flying educational payloads on
board the sub-orbital vehicles and integrating similar experiments to the ones under
NASA Flight Opportunities programme.
The microsatellite deployment market is considered by many experts to be a
promising one as it is of strong interest to several sub-orbital companies like Virgin
Galactic. The sub-orbital vehicles can be designed to launch small satellites into
low Earth orbit (LEO) (Federal Aviation Administration 2005), and it is a market
for microsatellites that are not well exploited. For example, VG is planning for a
price below USD10 million to launch 200 kg in Sun-synchronous orbit (Galactic),
thus looking not only at tapping in this new market but also at developing it.

7.4.1 Space Tourism

The space tourism market is about flying wealthy individuals or corporately

financed individuals or prize winners on board sub-orbital vehicles. Spaceflight
participants will be exposed to a 15 minutes of microgravity environment and will
fly up to an altitude of 100 km during a 2 hour flight.
Sub-orbital companies will be offering a bundle of services, including parabolic
flights and spaceflight participant training. Spaceflight participants will be passing
through a short training of several days and will be flying with other spaceflight
participants. Initially certain SRV companies were even considering to offer para-
bolic flights to their customers around 2016, and later in 2019 they will launch small
satellites and in 2020 provide sub-orbital services.
Depending on the vehicle and the altitude, they will reach prices per seat within a
spaceflight participant range. For example, in 2013, with XCOR, the price per seat

4
The bookings include information only of the following companies: Armadillo, Blue Origin,
Virgin Galactic and XCOR.
7.4 Targeted Sub-orbital Markets 115

is in the range of USD95,000, while with Virgin Galactic the price is between
USD200,000 and USD250,000 per seat (NASA, Emerging Space, The evolving
landscape of 21st Century American Spaceflight 2015b). In 2004, a ticket was
expected to reach a maximum price of USD200,000; in 2016 it reached up to
USD250,000 or even higher. The prices for sub-orbital seats will be influenced by a
number of factors, such as the expected return of investment, profitability, demand
fluctuations, spaceport taxes and flight permits. In the early days of sub-orbital
operations, prices are expected to be higher and to drop when the demand for
sub-orbital flights increases. Yet, prices per seat may go up due to unexpected
regulatory hurdles for acquiring flight permit or economic recession.
In 2004, the dream of sub-orbital tourism just emerged and captured the imag-
ination of many visionaries, entrepreneurs and citizens. In order to promote space-
flights and attract participants, manufacturers/operators and service providers
offered to give away seats for different prizes, and between 2004 and 2012, more
than 15 seats were won through those prize competitions.
Regardless of the high number of registrations for sub-orbital flights, citizens
and non-space entrepreneurs underestimate the complexity, safety regulatory
requirements and time consumption of developing sub-orbital vehicles as well as
the risks of tragic accidents and the ensuing negative publicity for the sub-orbital
space tourism market. The assumption that there is a big market for sub-orbital
flights or that its creation is easy may be quite misleading in a complex and volatile
environment in which the sub-orbital companies operate.
The fast rate of growth of space tourism market depends on several factors: first,
the successful achievement of regular, safe and reliable sub-orbital operations;
second, good economic conditions permitting wealthy citizens to have sufficient
funds to buy seats; and third, the presence of low regulatory hurdles for obtaining
flight permits for sub-orbital vehicle operations.

7.4.2 R&D Payloads

The opportunity to fly R&D experiments on board sub-orbital vehicles and perform
environmental research is a completely new challenge for the pharmaceutical,
biotechnological, medical and other devices. The R&D markets will also include
the STEM research community where PhD researchers can fly experiments on
board SRV in a similar manner as they fly them on parabolic flights.
The R&D markets have not entered the nascent stage of development yet, and
manufacturers/operators and service providers are not familiar with the existence of
these markets. At present, the idea of flying R&D experiments on board sub-orbital
vehicles is already in the air, but there is limited public research to analyse the
existing opportunities and benefits along this line. The question that comes to mind
is whether sub-orbital entrepreneurs can learn lessons from R&D research on board
the ISS. Figure 7.5 presents a general overview of the targeted R&D markets for
sub-orbital vehicles. They are divided into R&D and emerging markets, as
116 7 Sub-orbital Markets

Drug development
Cell and tissue
engineering
R&D markets
R&T

Biotechnology Osteoporosis
Medical equipment
Health Sports equipment
Nutrition
Environment
Earth observation
and protection
New materials

Emerging markets Lighter and stronger

materials
Space games
Education Media PC games Mobile
Movies, images Board games
Advertising TV shows
Space games
Space tourism
Entertainment
Astronaut training
Space tourism
Space Exploration Flight tourism Flight tourism
Parabolic flights
Space cosmetics Testing Advertising MIG flights
Pilot training

Fig. 7.5 R&D sub-orbital markets

experiments by both pharma and space cosmetics companies could be integrated on

board sub-orbital vehicles.
R&D experiments linked to human physiology in the area of impact micrograv-
ity on cardiovascular system, blood pressure regulation (Migeotte 2016) and ves-
tibular system regulation and medical device testing such as PET scanner, MRI
(Migeotte 2016) and hip, spine or ultra-diagnostic equipment they all could be
potentially tested on board sub-orbital vehicles. Do some of the ISS R&D markets
can be considered relevant for the sub-orbital R&D markets?
Environment research in the domain of atmospheric research and Earth obser-
vation sciences could also be of high relevance, particularly in situ research of the
upper layer of the atmosphere. For example, Virgin Galactic SpaceShipTwo had on
board NOAA atmospheric sensors. Oil and rack companies may also have Earth
observation payloads monitoring the oil recovery.
Another seldom considered emerging market, in addition to the education,
entertainment and the advertising markets, is the space cosmetics market. Cos-
metics companies may invest in R&D treatments to be performed under micro-
gravity environment, e.g. beauty creams and hair products. The main question that
arises for the R&D markets is whether the short 5 min microgravity environment
will be sufficient for performing biomedical or material science experiments on
board these vehicles. In addition, sub-orbital manufacturers will have to decide how
to integrate them in the sub-orbital vehicle and price them per kilo.
NewSpace companies willing to fly R&D payloads in their sub-orbital vehicles
will first have to perform an analysis of the ISS R&D experiments that need only a
maximum of 5 min of microgravity environment in the context of the above
7.5 Conclusions 117

markets as in Fig. 7.5. Therefore, permitting sub-orbital companies to targeted

R&D payloads that are scheduled to be flown on board the ISS but due to limited
ISS resource availability they are not flown. The question that arises is whether the
sub-orbital companies will manage to convince the researchers to fly their payloads
for only 4 min in zero gravity.
With the expected retirement of the ISS in 2024, the above opportunity may even
become more important for the growth of R&D markets which will use sub-orbital
platforms. Space agencies may start to relocate their R&D experiments to
sub-orbital vehicles.

7.5 Conclusions

Space tourism and the R&D markets are at present the primarily targeted markets of
sub-orbital manufacturers/operators and service providers. The space tourism mar-
ket is a fast-growing market, albeit complex and volatile, due to the time needed to
develop sub-orbital vehicles and high safety regulatory requirements. The growth
of the market will depend on the successful achievement of regular, safe and
reliable sub-orbital operations and good economic conditions permitting wealthy
citizens to have sufficient funds to buy seats. Finally, sub-orbital companies will
have to be exposed to low regulatory hurdles for obtaining flight permits for
sub-orbital vehicles operations.
SRV companies developing new vehicles will be exposed to technology devel-
opment and certification risks, combined with market and budgetary risks which
may lead to sudden budgetary cuts due to venture capital withdrawal or change of
direction of investor interest towards seeking safer and more profitable businesses.
The lessons learnt in the last 12 years from the SRV industry could be quite
beneficial for the future NewSpace companies involving projects related in in situ
resource utilization (ISRU). The companies with projects linked to asteroid mining
and space-based resources exploitation may face similar issues. At present,
sub-orbital companies are operating in an extremely complicated environment, in
which they both need to demonstrate their capability to build and provide safe
sub-orbital flights to the public and attract and secure private financing for building
and operating their sub-orbital vehicles.
The sub-orbital R&D markets will cover a wide variety of markets from phar-
maceutical to medical device testing and research in areas, such as the cardiovas-
cular system, blood pressure and others. The R&D markets may evolve with the
expected retirement of the ISS in 2024, as space agencies may start relocating their
ISS R&D experiments on sub-orbital vehicles. Other space agencies like ESA and
JAXA might also implement programmes similar to the NASA Flight Opportunities
programme.
Countries willing to encourage the growth of the sub-orbital industry will have
to first perform an analysis of the research and innovation benefits of having a
sub-orbital industry. If they decide to go ahead, they may offer zero tax benefits to
118 7 Sub-orbital Markets

sub-orbital manufacturers/operators and set up prizes for encouraging STEM

experiments to be integrated on board these vehicles. Finally, some countries
may even implement programmes similar to the NASA Flight Opportunities
programme for flying R&D payloads and also create opportunities for national
flight licences. The implementation of the EU Space Strategy will encourage the
development of new markets for space-based applications and services, and man-
ufacturers/operators may push regulators and member states in Europe to have
experimental flight licences.
Chapter 8
Spaceports

8.1 Introduction

Spaceports are critical for the commercial space transportation operations of orbital
and sub-orbital flights. They provide the necessary facilities, ground control and
runway/launch pads and in the future are also expected to host passenger training
facilities, visitor centres, hotels and other types of attractions (Pelt 2011). The
expected growth of orbital and sub-orbital flights encourages the emergence com-
mercial spaceports throughout the USA and now in Europe. Spaceports are the sites
for launching orbital and sub-orbital vehicles in space. They will offer facilities for
vertical and horizontal takeoff and landing. Spaceport sites are supposed to inte-
grate launch vehicle components, fuel, and maintain vehicles as well as payloads
into the vehicles (FAA 2016, The Annual Compedium of Commercial Space
Transportation: 2016).
The expected growth of commercial space services of commercial for both
orbital and sub-orbital transportations will encourage the adaptation, refurbishment
and even construction of new spaceport sites. Certain European countries, like
Sweden, have already built spaceports, while others like the Netherlands and the
UK have launched the idea and are performing feasibility studies for constructing
national spaceports.

8.2 Stakeholders

Spaceports offer orbital and sub-orbital companies to sign lease agreement to use
their premises for their flight activities. National governments or states invest
taxpayers money in the construction and development of these long-term infra-
structure projects which are considered valuable public utilities. Providing they
have a permit, commercial spaceports could be privately owned and developed as

Springer-Verlag GmbH Germany 2018 119

S. Tkatchova, Emerging Space Markets, Space Technology Library 35,
DOI 10.1007/978-3-662-55669-6_8
120 8 Spaceports

Fig. 8.1 Spaceport stakeholders

private airports are developed and operated in public-private partnership (PPP).

Spaceport operations include managing runway/launch pads, ground facilities1 and
the taxing/takeoff of sub-orbital vehicles. The mission control centre is part of the
ground segment of spacecraft operations which is responsible for coordinating the
launch campaign and launch sequence (e.g. countdown) until the landing or ending
of the mission. Spacecraft operation engineers monitor and send telemetry com-
mands to the spacecrafts subsystems correcting the altitude control system, pro-
pulsion, thermal power, etc.
The customers of spaceports will be a variety of NewSpace companies that
operate both orbital and sub-orbital vehicles. In addition, traditional space compa-
nies that want to use the spaceport facilities for integrating their experiments on
board orbital and sub-orbital vehicles may also use the spaceport facilities. Finally,
service provider companies may offer entertainment services, like parabolic flights,
spaceflight preparation programme, customized flights2 and lectures (Fig. 8.1).

1
Facilities include terminal hangers, propellant facilities, payload integration facilities, fuel
handling, vehicle integration/checkout and others.
2
Certain spaceports like the Swedish Space Port offer the possibility to watch the Northern Lights.
8.2 Stakeholders 121

Spaceports are also expected to host training facilities, e.g. centrifuges,

hypobaric chambers, simulators and others (Seedhouse 2014). However,
maintaining such an expensive infrastructure may require from spaceport owners
and operators to have a clear and profitable business case.
With the expected growth of the commercial sub-orbital market, governments
may initiate the construction of new spaceports or the adaptation of already existing
airport sites for sub-orbital operations. The roles and functions of stakeholders will
evolve in parallel with the value chain of spaceports, and it is possible for new
actors to emerge in the future, e.g. insurers, concessionaires, communities affected
by spaceport operations, business, parking providers and ground transport providers
(Table 8.1).

Table 8.1 Spaceport stakeholders

Stakeholders Organizations Markets Services
National European governments Orbital commercial Orbital and sub-orbital
governments US states space transportation launch services
services Space tourism services
Sub-orbital commer- Astronaut training
cial space transpor- Parabolic flights
tation services
Spaceport opera- USAa Orbital commercial Sub-orbital launch ser-
tions and airfield Spaceport America space transportation vices
management Mojave Air and Space services Space tourism services
Port Sub-orbital commer- Astronaut training
SpaceX McGregor cial space transpor- Parabolic flights
Rocket Development tation services Flying R&D payloads
and Test Facility Microsatellite deploy-
Blue Origin West ment
Texas Rocket Flight Technology
Facility demonstration
Europe
Swedish Space Port
Caribbean Spaceport
Ground/mission Traditional space com- Orbital commercial Orbital spacecraft oper-
control operations panies space transportation ations
Mission Control services Sub-orbital spacecraft
services Sub-orbital commer- operations
cial space transpor-
tation services
Customers SpaceX Orbital commercial Launch services
Orbital ATK space transportation Runway/launch pads
Virgin Galactic services Mission control services
Scaled Composites Sub-orbital commer- Ground facility services
XCOR Aerospace cial space transpor- Parabolic flights
Masten Space Systems tation services Astronaut training
EXOS Aerospace facilities
Interorbital
a
In the USA, the launch sites are classified by the FAA as FAA-AST license commercial and
re-entry sites and nonlicensed US sites (FAA 2016)
122 8 Spaceports

Most of FAA-AST licences will expire between 2016 and 2020, and sub-orbital
companies using the spaceports above will be exposed to the pressure to launch and
initiate successful operations by the end of the licence expiry. Since the sub-orbital
space industry is hardly expected to grow, it is possible that after 2020, there would
be fewer licensed spaceports for sub-orbital launches.
At present European governments are observing the evolution of the orbital and
sub-orbital commercial space transportation services. With the expected growth of
sub-orbital launch services, European governments may unite forces and offer to
SRV companies the opportunity to lease the certain facilities from the spaceport in
French Guiana, Kourou, or contract additional facilities.
At present, information about commercial spaceports in other countries is
limited; there is detailed information about government-owned spaceports. For
example, Russian space companies are expected to start using the Vostochny
Cosmodrome, Baikonur Cosmodrome, Plesetsk Cosmodrome and Dombarovsky
Air Base before 2020. Japan has two active governmental launch sites Tanegashima
Space Center and the Uchinoura Space Center. China operates three institutional
launch sites: Jiuquan Satellite Launch Center, Taiyuan Satellite Launch Center and
the Xichange one.
In India the Indian Space Research Organization (ISRO) operates Indias sole
launch site the Satish Dhawan Space Center (FAA 2016, The Annual Compedium
of Commercial Space Transportation: 2016).
The USA is the pioneer and leader in construction, development and leasing of
commercial spaceports for orbital and sub-orbital launches.

8.3 Targeted Markets/Services

In recent years new trends have emerged and national space agencies are leasing
their spaceports to companies like SpaceX and others. Fully commercial spaceports
have to primarily rely on attracting commercial customers. Therefore, they need to
develop a medium- and long-term strategy for viable business models and to
implement profitable business cases. Commercial spaceports may become potential
hybrids between space cosmodromes and airports. For example, certain spaceports
may have to provide services typical for launch sites, like vehicle processing,
payload integration services, storage services and others (Fig. 8.2).
Future spaceport services may be a mixture between launch and airport services
and offer a wide range of services as information, mobility, crew/cargo manage-
ment, mission control services, security management, entertainment, medical ser-
vices and many others.
8.3 Targeted Markets/Services 123

System SECURITY
Elements
OR OR
Stages Vehicle Processing

Interstage

Other elements

Fairings Integration facility

OR
Payload Payload Processing

OR
SRBs Storage Facility

Propellants Storage Facility

Fig. 8.2 Launch vehicle integration and processing scheme (FAA 2016, The Annual Compedium
of Commercial Space Transportation: 2016)

8.3.1 USA

The USA is the pioneer in the construction of commercial spaceports. They are
classified by FAA-AST which licensed launch sites both for orbital and sub-orbital
vehicles. In the USA, companies can obtain FAA-AST experimental permits: for
example, in 2015 Blue Origins New Shepard flew twice using FAA-AST experi-
mental permit, with the second flight achieving a historic milestone by becoming
the first vehicle to launch vertically, enter space (100.5 km) and land vertically
(FAA 2016, The Annual Compedium of Commercial Space Transportation: 2016).
In the USA, there are nine FAA-AST-licensed commercial sites in partnership
with the private industry which is managed by a university. Four sites are dedicated
to orbital launch activity, nine facilitate sub-orbital launches only and five can host
both types of operations (Table 8.2).
Between 2016 and 2020, most of FAA-AST licences will expire, and sub-orbital
companies using the spaceports above will be exposed to the pressure to launch and
initiate successful operations by the end of the licence expiry. Since hardly any
growth of the sub-orbital space industry is expected, it is possible that after 2020
there would be fewer licensed spaceports for sub-orbital launches.
The most popular sub-orbital spaceports are the spaceport of America and
Mojave Air and Space Port.
Spaceport America is the first commercial spaceport constructed in 2011, with
the vision to encourage affordable, efficient and effective access to space by
developing and operating the first purpose-built commercial spaceport (America
2016). The spaceport is built to accommodate both vertical and horizontal launches
of aerospace vehicles and is owned and operated by the State of New Mexico. It
invested $209 million USD (FAA 2016, The Annual Compedium of Commercial
124 8 Spaceports

Table 8.2 FAA-AST-licensed launch sites (FAA 2016, The Annual Compedium of Commercial
Space Transportation: 2016)
Licence Types of
first launches
Launch site Operator issued Expires supported
California Spaceport Systems 1996 18/09/2016 Orbital
Spaceport International
Mid-Atlantic Virginia Commercial 1997 12/18/2017 Orbital
Regional Spaceport Space Flight Authority
VA
Pacific Spaceport Alaska Aerospace 1998 23/09/2018 Orbital/sub-
Complex Alaska Corporation orbital
Cape Canaveral Space Florida 1999 30/06/2020 Orbital/sub-
Spaceport orbital
Mojave Air and East Kern Airport District 2004 16/06/2019 Sub-orbital
Space Port
Oklahoma Oklahoma Space industry 2006 11/06/2016 Sub-orbital
Spaceport development authority
Spaceport America New Mexico Spaceport 2008 14/12/2018 Sub-orbital
Authority
Cecil Field Jacksonville Aviation 2010 10/01/2020 Sub-orbital
Spaceport Authority
Midland Interna- Midland International 2014 14/09/2019 Sub-orbital
tional Airport Airport
Ellington Airport Houston Airport System 2015 25/06/2020 Sub-orbital

Space Transportation: 2016) in the construction of the spaceport with the vision to
attract NewSpace companies to use the spaceport. Initially Virgin Galactic3 signed
a tenant agreement for 20 years, followed in 2013 by SpaceX that signed a 3-year
lease for the use of the site for the launch, recover and reuse of Falcon 9V1.1.
booster (FAA 2016, The Annual Compedium of Commercial Space
Transportation: 2016).
Mojave Air and Space Port is actually a test centre and a launch and re-entry site
for horizontal launches of reusable spacecraft. It is a licensed FAA-AST since 2004
and has become one of the most important locations for the emergence of the
sub-orbital industry. In 2016, there were already 60 companies involved in the
design, building, testing and operations of small sub-orbital vehicles.
If in 2004 putting money in the development and operations of commercial
spaceports in the USA seemed a good public investment for encouraging regional
economic growth at present, this looks less feasible since the sub-orbital space
industry is still in its emerging state, and spaceports come under pressure to increase
the number of their leasing agreements, have a clear business case and generate profits
to cover the operating costs. With the expected expiry of the FAA-AST licences, the
political and regulatory pressure on the US commercial spaceports will increase.

3
Initially the port was constructed to host two WhiteKnightTwo aircrafts and five Virgin Galactic
SpaceShipTwo spacecrafts.
8.4 Conclusions 125

8.3.2 Europe

Several European countries like Sweden, the Netherlands and Portugal are operat-
ing or planning to construct commercial spaceports.
Besides the Swedish Space Port, there are ongoing discussions for the construc-
tion of a Caribbean spaceport that will be the home base of the XCOR flight
operations. In the Portuguese Azores islands, the government is considering to set
up a partnership with a few Atlantic countries, including the USA to build a
spaceport for small satellite launches.
The Swedish Space Port is located in Kiruna, Sweden, and its aim is to become
the leading spaceport for commercial spaceflights. It was inaugurated in 2007, and
the first customer of the spaceport was Virgin Galactic which signed an agreement
with the spaceport to be its first non-US-based spaceport. In 2012, the spaceport
launched a spaceflight preparation programme and in 2013 a parabolic flight
programme with AirZero G and Novaspace companies.
The Swedish Space Port has already diversified its services and focused on
providing operational parabolic flights and spaceflight preparation programmes. It
is expected that the spaceport will sign agreements with other NewSpace compa-
nies and in this way diversify the risk of relying on Virgin Galactic as a prime
customer.

8.4 Conclusions

The USA is the pioneer and leader in the construction and operations of commercial
spaceports. European countries are still waiting to see if the commercial sub-orbital
industry will take off although it is possible that Europeans would go on to create
their one intergovernmental sub-orbital spaceport in a similar manner as the ESA
spaceport or lease parts of the current one. EU countries may look at cooperating
with the USA for building commercial spaceports for smallsats launches.
Commercial spaceports of the future may become potential hybrids between
launch cosmodromes and airports, while their services will be a mixture of both.
Spaceports will need to have viable business cases, increasing lease agreements and
generating cost-effective services. That will lead to having even commercial
mission control services, therefore avoiding spaceports carrying the high cost of
mission control responsible for the launch campaign and operations.
The expected growth of the commercial orbital and sub-orbital industry will
result in an increased number of feasibility studies to build spaceports. It will also
result in the FAA granting flight licences to spaceports after 2020.
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Index

A Avoidance, 96
Abu Dhabi, 6 Axe/Lynx, 111
Additive manufacturing, 69 Axiom, 77, 88
Advertising, 83
Airbus A340, 99
Air-launch, 77 B
Air Revitalization System (ARS), 11 Baikonur Cosmodrome, 122
Air traffic, 98 Basic and applied research, 7
Alloys, 82 BEAM module, xi, 5, 58, 85
AlphaSparks, 32, 77 Benefits, 43, 80
Aluminium, 49 B612 Foundation, 32
Angel investors, xii Bigelow Aerospace, 32
Ansari X Prize, 7, 107 Bigelow space stations, 4, 8586
Antares, ix, 74 Biochemistry, 88
Antares launch vehicle, 9 Bio-engineering, 70
Anti-satellite weapon (ASAT), 93 Biolab, 44
Ares 1/Ares V rockets, 2 Bio-materials, 82
Ariane 5, 12, 18 Bioreactor, 82
Ariane 6, ix BioServe, 77
Arianespace, 18 Biotechnology, 83
Arkyd telescopes, 68 Blood measurement instruments (BMI), x
Armadillo Aerospace, 21, 114 Blue Origin, 8, 11, 18, 21, 32, 110, 114
ASICS, x Blue Origin Orbital, 32
Asteroid, 67 Blue Origin West Texas Rocket Flight Facility,
Asteroid mining, 68 121
Asteroid Redirect Mission (ARM), viii, 16 Boeing, 8, 11, 32
Astrobotic Technology, 15 Bone density, 44
Astronauts, 5 Bone loss, 44
Astroscale, 97 Booster Industries, 32, 107, 110
Atlas 5, 74 Bottom-up research, 57
ATV, 10 Budgetary reductions, 46
Automation, 63 Bulgaria, 40
Aviation, 98 Business case, 26
Aviation safety, 9899 Business models, 18, 72

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DOI 10.1007/978-3-662-55669-6
134 Index

C Cost, 39
Canadarm2, 85 overruns, 71
Cancer research, 82 recovery, 46, 78
Capital, 80 Cost savings, 18
Caribbean Spaceport, 32, 107, 110 COTS, ix
CCDev, viii, ix, xi Craters, 64
CCDev 1, 10 Crew/cargo management, 122
CCDev 3, 12 Crew Exploration Vehicle (CEV), 1
CCiCAP, 10 CRS, 1, 87
CCP, 12 CrystalCards, 88
CCSC programme, 15 CSA, 77
Cell/tissue engineering and medical device CST-100, 11
testing, 6 CST-100 Starliner, viii
Center for the Advancement of Science in CST-100 vehicle, 74
Space (CASIS), 76 CTS-100, 5
Centrifuges, 121 C-type asteroids, 66
Cerise, 94 Cuba, 40
Challenges, 71 CubeSats, 22
Chandrayaan-2 mission, 56 Cultural projects, 78
Chang landers, 56 Customers, 24, 26, 33, 91
China, 56 Cygnus, viii
Cis-lunar space (CLS), 25 Cygnus spacecraft, 9
Citizens in Space, 32 Cygnus vehicle, x, 5, 74
CleanSat, 100
Clean Space initiative, 99
CNES, 99 D
CO2, 64 DARPA, 5, 102
Cobalt, 49, 64 Deep Space Industries, 32, 66, 68
Columbus module, 76 Deimos, 69
Commercial cargo, 5 Deimos Imaging, xii
Commercial Crew Development (CCDev), 8 Demand, xi, 45, 71, 80
Commercial Crew Development Denis Tito, x
2 (CCDev2), 10 De-orbiting technologies, 96
Commercial Crew Transportation Capability DigitalGlobe, xii, 3
(CCtCap), 13 Direct benefits, 18
Commercialization, vii, 23, 24, 77 Disruptive technology innovation, xi, xii
Commercial Products Contract (CPC), 13 Diversify, 38
Commercial Space Federation, 32 Dombarovsky, 122
Commercial space markets, x, 21, 24 Dragon, viii, x, 74, 85
Commercial space transportation markets, 18 Dragon capsule, 10
Commercial space transportation services, 18 Dream Chaser, 11, 74
Commercial Transportation System (CTS), 11 Drug development, 82
Commercial ventures, 46 Dynetics, 7
Competition, 24, 61
Composite pressure vessel, 11
Constellations, 95 E
Copenhagen Suborbital Dassault Aviation Earth, 49
Vector Space Systems, 32 EcoDesign, 100
Copenhagen Suborbitals, 107, 110 Economic benefits, 17
Cosmica airplanes, 32 Economic impacts, 18
Cosmonauts, 40 Economic incentives, 100
Index 135

Economics, viii G
Economies of scale, 14 Game theory, 108
eDeorbit, 100 Gap, 33
EDT systems, 100 Generation Orbit Launch Services, 7
Education, 83 GEO satellites, 3
Edutainment, 70 Global cooperation, viii
Electrodynamics tethers, 100 Golden Spike, 32
ELIPS programmes, 76 Google Lunar X Prize, 5, 51
Emergency Detection System (EDS), 11 Governmental customer, 38
Emerging commercial space markets, xi Governments, 17, 119
Emerging markets, 83 Grand Challenge, ix
Employment, 18
End-users, 80
Entertainment, 27, 83, 122 H
Environment, 83 H2020, 98
Environmental Control and Life Support Habitation, 63
System (ECLSS), 11 Hamilton Sundstrand, 89
EO systems, xii Hangers, 119
ERISTO, 83 Health, 83
ESA, x, 16 Helium 3, 15
ESA Columbus, x Hepatitis C, 84
EU, 18 High-intensity discharge (HID), x
Europe, ix, x H-II, 10
European Drawer Rack (EDR), 44 Honeywell, 77
European SME, 109 Hubble telescope, 36
European space, xi Hungary, 40
EU Space Strategy, 18, 110 Hydrocarbons, 72
Eutelsat, 18 Hydrogen, 64
Evolvable Lunar Architecture (ELA), 56 Hypobaric chambers, 121
exactEarth, xii
Excalibur Almaz, xi
Exoliner, 74 I
ExoMars, 16 IIASL, 110
EXOS Aerospace, 121 India, 56
Expandable Bigelow Advanced Station Indirect benefits, 18
Enhancement (XBASE), 85 Industrial applications, 84
Industrial Space Facility (ISF), 35
Industry dependence, xi
F Inflatable modules, xi, 73
FAA, 4 Innovative Lunar Demonstration Data (ILDD)
Falcon launchers, ix programmes, 10, 20
Falcon 9 rocket, xi, 74 In-orbit satellite servicing, x, 28, 102104
Ferrous metals, 63 In situ resource exploitation, 24
Financing, 68 In situ resource extraction, 28
Flight licences, 109 In situ resource utilization (ISRU), 2
Flight opportunities programme, 1314 Inspirational dimension, viii
Fluid Science Laboratory (FSL), 44 Inspiration to Mars, 32
Fragments, 93 Interdependencies, 31
Free market economy, 40 Interkosmos programme, 40
Frenzied, 22 International Space Exploration Coordination
Fuel handling, 119 Group (ISECG), 65
Funded Cargo SAA, 8 International Space Station (ISS), vii, xi, 4, 74
Funded Crew SAA, 8 brand, 45
136 Index

International Space Station (ISS) (cont.) Lunar-with a capital L, xiii

commercialization, viii, 23 Luxembourg, 28
markets, 75 LuxImpulse, 55
partners, viii, 73, 79, 80
prices, 45
products and services, 45 M
programme, 80 Made in Space, 65
resources, 44 Made in Space Stratolaunch Systems, 32
utilization, xiii, 25 Manganese, 49
water recycling, 82 Manufacturers/operators, 109
Interorbital systems, 7 Market creation, 79
Interplanetary missions, 57 Market evolution, 23
Interplanetary settlement, 4972 Market opportunities, 78
IPR rights, 43 Markets, 33
Iridium, 3 Market segmentation, 2425
Iridium 33, 94 Market structures, 17
Iron, 49, 64 Mars Atmosphere and Volatile Evolution
(MAVEN), 16
Mars Colonial Transporter, 51
J Mars One, 32, 69, 70
Japan, 56 Mars One mission, 5
JAXA Cosmode Project, x Mars Society, 69
JAXA Open Space Lab, x Mass, 93
Jiuquan Satellite Launch Center, 122 Masten Space Systems, 13, 15, 32, 110, 121
Material Science Laboratory (MSL), 44
mCLV-RSR, 13
K MDA, 32
Ka-band frequencies, 95 Medical devices, 47
Kentucky Space, 77 Medical services, 122
Kessler syndrome, 28, 95 Mediet food tray, x
KIBO module, 78 Merck, 77
Kiruna, Sweden, 125 METRON project, 82
ocopc, 110 Microcosm, 7
Kosmos-2251, 94 Microgravity platforms, 5
Ku frequencies, 95 Micrometeorites, 64
Microsatellite market, 7
Mid-deck lockers, 77
L Military, 5
Laggers, 14 MIRCorp, 42
Launch abort system, 11 MIR space station, x
LauncherOne, 19 Mission control services, 122
Lease, 119 Mojave Aerospace Ventures, 107
Lessons learnt, 47 Mojave Air and Space Port, 121, 124
Lilly, 77 Moon Express, 15, 32, 56
Low Earth orbit (LEO), xi, 7 Moon village, 58
Low-G biology, 70 Multidisciplinary, 24, 43
Luna, 56 Multilateral Coordination Board (MCB), 79
Lunar Atmosphere and Dust Environment MUSES, 89
Explorer (LADEE), 16
Lunar Catalyst programme, viii, 15, 40, 62
Lunar ice, 61 N
Lunar resources, 52 NanoRacks, 22, 32, 77, 8889
Lunar sand, 61 NanoRacks CubeSat Deployer (NRCSD), 22
Lunar surface, 62 NanoRacks NanoLab, 89
Index 137

NASA, viii, x Prevention, 96

Asteroid mission, 10 Price, 68
COTS programme, viii, xi Pricing policies, 79
Lunar Catalyst, 5 Primary market sectors, 30
STEM community, 13 Private financing, 53
Nascent stage of development, 21, 27 Private investor, 71
National interests market, 81 Profitability, 14
Near-Earth Objects (NEOs), 28 Profits, xi, 68
Near Space Corporation, 13 Progress 23 ship, 99
Net present value (NPV) model, 18, 77 Propellant facilities, 119
Neurosurgery, 82 Propellants, 28, 63
New Glenn, 18 Property rights, 96
New materials, 83 Prospector-X, 55, 68
NewSpace, vii, x, xi Protection, 96
NextStep Programme, 59, 63 Protein crystal growth-1, 88
Nickel, 49, 64 Protein crystal growth (PCG), 89
Nitrogen, 64 Protein crystallization, 6, 24
Nitto Seimo Co, 100 Protein growth, 79
Non-EU technologies, xii Proton M, 18
Northern Lights, 120 Publications, 83
Novartis, 77 Public investors, xii
Public-private partnership (PPP), 59, 119
Pyroxene, 64
O
Open Space Lab, 78
Orbital ATK, 121 R
Orbital launch services, 3, 77 RadarSat, xii
Orion vehicle, 2 Radiation, 64
OSTEO facility, x, 44 Rate of return, 18
Osteoporosis, 6, 45, 82 R&D
Osteoprotegerin, 45 customers, 13
Oxides, 64 markets, 6, 13, 27, 83
Oxygen, 63 microgravity markets, 14
needs, 14
payloads, 24, 27
P solutions, 46
Parabolic flights, 121 Reaction Engines, 32, 110
Paragon Space Development Corporation, 8, Red, 77
10, 11 Re-entry Direct Broadcasting Alert System
Payload, 119 (R-DBAS), 99
Pepsi, x Refuel LEO, 28
P&G, 77 Regolith, 64
Phobos, 69 Removal, 96
Phoenix project, 103 Repair LEO, 28
Phosphorous, 66 Reusable vehicles, xi
Pioneers, 40 Revenues, 18
Pizza Hut, x Risks, xii, 40
Planetary defence, 52 Robonaut (R2), 102
Planetary Resources, 32, 65, 66 Robotics, 50, 63, 69
Planet Labs CubeSats, 3 Rocket, xi
Platinum group metals (PGMs), 67 Rocket Development and Test Facility, 121
Plesetsk Cosmodrome, 122 Rocketplane, xi
Poland, 40 Rocket plan Kistler, 9
138 Index

Roscosmos, viii, 3 SpaceShipOne, 5, 107

Runway, 121 SpaceShipTwo, 13
Russia, 56 Space Shuttle, xii, 3538
Space Situational Awareness, 95
SpaceX, xi, 3, 32, 8588
S SpaceX Falcon Heavy launch vehicle, 5
Scaled Composites, 32, 107, 110 SpaceX McGregor, 121
Science, viii Spektr, 42
Secondary market sectors, 30 Spillovers, 18
Security management, 122 Spin-in, 59
Selene-2 mission, 56 SRV, 7
Self-sustainable, 69 SS2, 13
7 meter asteroid, 2 Stakeholders, xi, 7578
Shackleton Energy Company (SEC), 32, 64 Starfighters, 7
Shuttle Bay, x Starliner, 12
Sierra Nevada Corporation, 8, 11, 32 STEM, 79
Silicon, 64 STIG, 13
Simulators, 121 Stratolaunch, 110
Skybox, xii Sulfur, 66
Skylab, 94 Sweden, 8
SLIM mission, 56 Swedish Space Port, 32, 110, 120, 125
Smallsats, 96 SWOT analysis, 18
SME and R&D companies, 88 SXC, 110
Societe Nationale de Credit et d
Investissement (SNCI), 55, 67
Solar-powered satellites, 27 T
Space, 50 Taiyuan Satellite Launch Center, 122
agencies, 50, 75 Tanegashima Space Center, 122
applications, 69 Targeted markets, 33
cosmetics, 83 Tauri Group, 6
debris, 26, 28, 93105 Taxpayers, 119
industry, xi Technology innovation, 18
laboratory, 73 Technology platform, 100
tourism, x Techshot, 77
tourist, 7 Tele-communications, 5
traffic management, 95, 99 Teledyne Brown Engineering, 77, 89
transportation services, 8 Tele-medicine, 82
Space 4.0, ix Tele-operations, 63, 71
Space Act Agreement (SAA), 8 Terrestrial competition, 71
Space Activity Law, 9 Terrestrial mining, 55
Space Adventures, 32, 77, 110 Terrestrial technologies, 24
Space-based products, xi Tether, 100
Space-based resource exploitation, xii Tether Applications, 97
Spacecraft, 63 Threat, 98
Space debris mitigation (SDM), 99 3D printing, 24, 58, 65
Space Exploration, 83 Time to market, 79
Spacehab, x, 35 Titanium, 49
Space Launch System (SLS), 2 Tito, Dennis, 42
SpaceLoft tm XL, 13 Top-down market analysis, 79
Spaceport America, 123 Transfer vehicles, 77
Spaceports, 119125 Transversal market segments, 26, 27
Space-related product, 111 TRL, 29
Index 139

U Volvo, 111
Uchinoura Space Center, 122 Vostochny Cosmodrome, 122
ULA, 3, 32
Uncontrolled re-entry, 98
Unfair competition, 14 W
Unfunded Crew SAA, 8 Waste management, 82
United Launch Alliance (ULA), 8, 11 Water, 64
Unknown R&D customers, 79 White Knight, 107
UP Aerospace, 13, 32, 110 Willis Inspace, 110
USA, 8 World View, 13
US Constellation programme, 1
US DoD, 5
User-driven, 90 X
User-friendly conditions, 45 Xaero sub-orbital vehicles, 13
UTC, 77 Xbase station, 88
Utilization, xii XCOR Aerospace, 7, 21, 32, 110, 114, 121
XCOR Lynx, viii
Xichange one, 122
V
Value chains, 24
Vehicle integration/checkout and others, 119 Z
Venture capitalists, xi Zero Gravity, 32, 83, 110
Vicetris, 84 Zero2Infinity, 32
Virgin Galactic, 6, 13, 32, 110, 114 Zubrin, 69
Vision for Space Exploration (VSE), 1