By Akash Sriram

Houston, there’s a problem

U.S. rocket firms will have to ferry hundreds of satellites into space over the next few years, as Russian sanctions continue to affect the Russian space launch industry.

Astra Space, SpaceX, and Rocket Lab USA all are some of the few U.S. businesses that could fill this vacuum. However, industry officials doubt their capability to scale up quickly.

Demand for satellite launches will rise as the competition heats up among companies such as Elon Musk’s SpaceX (NASDAQ:) and Amazon.com Inc’s Starlink.

According to Precious Payload data, more than 800 satellites weighing less than 100 kg are set to go into orbit in 2018, nearly twice the amount of launches expected in 2021.

Small satellite launches set to double in 2022: https://graphics.reuters.com/USA-SATELLITELAUNCHES/zjvqkdllwvx/chart.png

With Project Kuiper taking over significant capacity in the next few years analysts anticipate some launch-related delays.

Rocket Lab CEO Peter Beck stated to Reuters: “Come 2024 and 2025, all these mega constellations will need a rocket launch, it is going to become a problem.” He was referring specifically to the communications satellite networks being constructed by SpaceX, AST Spacemobile, OneWeb.

Rocket Lab is a company that builds miniaturized propulsion system to take advantage of the growing demand for compact satellites being placed in so-called low Earth orbit.

According to BryceTech, about three quarters of all small satellite launches were made by OneWeb or SpaceX in 2021.

Historical databases show that Russia has maintained an 16% share on the global launch markets over the last five year.

Russia’s market share over the past five years: https://graphics.reuters.com/USA-SATELLITELAUNCHES/movanbrrdpa/chart.png

The Soyuz rockets also were launched under the French-Russian joint venture Starsem.

Two-thirds (or more) of Soyuz’s launches were either commercially or to support the International Space Station, while the remainder were intended for domestic Russian customers. Caleb Henry from Quilty Analytics said.

Due to Western sanctions against Russia for the invasion of Ukraine in 2014, Russia will be unable to access its resources. Companies from Europe and the United States would need to respond quickly to the demand.

However, this may not be an easy task due to all the challenges and complexity involved in building new rockets.

Analyst Henry stated that while it is possible for new vehicles to come online sooner, due to better manufacturing techniques, precedent indicates it will prove difficult to attain high launch times over the next few years.

Beck of Rocket Lab said that the launch crisis will also affect smaller satellites, which are used for image and scientific observations. These satellites usually ride on the same rocket as other satellites to reach orbit.

LAUNCH AND CRUNCH

Delays in launches could have a number of negative effects on satellite internet companies. Failure to adhere to an FCC-mandated deadline can result in a loss of launch rights. However, some companies may not be able see a return on investments until the satellite is in orbit.

United Launch Alliance is a joint venture of Boeing (NYSE:) Co. Lockheed Martin (NYSE:) is set to get replaced by its Russian-made engines by Blue Origin, which Jeff Bezos has backed. However, Western launch companies still have much to do.

Experts in the industry say that Amazon’s Project Kuiper blockbuster launches can be a motivator for rocket builders to accelerate production.

SpaceX’s Starship Launch Vehicle is expected to go into mass production earlier than anticipated, according to analysts. SpaceX also operates Starlink, a satellite launch company.

Starship could alleviate launch constraints in the longer term. Starship can reduce the price of commercial products if Elon wishes to. But my prediction is that he’s more concerned about getting people to Mars.” Deutsche Bank (DE:) Analyst Edison Yu.

Yu said that new space companies such as SpaceX and Rocket Lab are winners when there’s a rise in demand and no dependency from satellite producers around the globe on Russia’s Soyuz rocket.

OneWeb, which had previously abandoned Russian launch services in April this year signed a deal to place its satellites on orbit with SpaceX.