SpaceX Explosion Implications

SpaceX Explosion Implications

A SpaceX rocket exploded on the launchpad last Thursday at Cape Canaveral, Florida. During the explosion the SpaceX Falcon 9 rocket as well as its payload were destroyed. SpaceX, the company of entrepreneur Elon Musk, felt the hit immediately, with shares dropping 9% on Thursday. However, it looks like there are new developments in the aftermath of the SpaceX explosion.

The incident will have more implications. Although the private space company has a solid safety record, the incident reverberated across several industries. The explosion didn’t just have a loud echo in the space industry. It seems to have had a domino effect across the telecom industry as well.

Future SpaceX Launches

Customers of the Space Exploration Technologies Corporation, commonly known as SpaceX, are numerous. Offering lower costs and accelerated launch schedules, SpaceX has risen steadily. The company gains most of its notoriety from missions flown for NASA. Delivering and retrieving cargo to and from the International Space Station. But most of its missions are more mundane and not part of a space program.

Regarding the future for SpaceX, there were many launches that were on schedule. Launches of commercial communications satellites used to support international mobile phone service. Launches of satellites used to support digital television. These launches are now an uncertainty.

Among the satellite operators that SpaceX will put into orbit this year are Iridium Communications, EchoStar, SES of Luxembourg, and KT Corporation of South Korea.

The domino effect could reach as far as China. It is possible that the explosion has jeopardized the sale of an Israeli satellite operator to a Chinese company.

The incident will probably affect the schedule for deliveries that NASA makes to the International Space Station as well. But that constitutes just a fraction of SpaceX’ business.

Resuming Activity at SpaceX

SpaceX now has to deal with federal investigators first. The area is now closed off for investigators to retrieve evidence from the site. After the investigation is conclusively over, SpaceX has to rebuild the launchpad at Cape Canaveral.

What is crucial here is how quickly SpaceX can bounce back from last week’s incident. The companies on the waiting list for launches are eager to know how long it will take before SpaceX can resume activity.

Satellites are expensive. A satellite costs between $200 million to $400 million. It also takes along time to manufacture one. It can take two years or more to make one. However, once in orbit, they are guaranteed money-makers for their operators. As a satellite operator, you can expect to recoup your investment in a few years. The rest of the satellite’s operational life, which is on average about a decade, gives you unhindered profits.

What SpaceX needs to understand from this is that every single day that a satellite spends on the ground is a day where profits are lost. And that is something that satellite operators care a lot about.

“No doubt SpaceX will fix the problems, but if you’re a customer time is money,” contributed Scott Pace. Contacted for an opinion, the director of the Space Policy Institute at George Washington University stated: “This will get customers looking at alternatives. It may give competitors an opening and slow down SpaceX.”


Image source: NASA.