Investing in Space: The space station kingmaker

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Several U.S. companies are working to build new orbiting habitats to replace the aging International Space Station. NASA's role in seeding the fledgling market was a hot topic at the FAA's space conference last week.

First, some context – the ISS is set to retire at the end of this decade. Four private space stations are vying to get online by the time that happens: 

• Axiom Space and Northrop Grumman are building solo efforts.
• "Starlab" is under development by Voyager Space and subsidiary Nanoracks alongside Airbus.
• "Orbital Reef" is a joint effort led by Sierra Space and Blue Origin.

NASA is the kingmaker when it comes to deciding which of these projects will succeed. Money from the agency played a crucial role in the developing crew and cargo spacecraft of SpaceX, Northrop Grumman and Boeing last decade. These days, it's been doling out funds to the four space station projects. Additionally, NASA's technological expertise and experience operating a research lab in space are also invaluable.

Space executives aren't of the same mind when it comes to how their biggest customer, the U.S. government, should be involved. These alternate perspectives were on display during a panel alongside NASA leadership last week. Axiom chief government officer Mary Lynne Dittmar kicked her comments off with a strong take on NASA's acquisition strategy:

"We're concerned that with four competitors in the game for very much longer, we're diluting what is only a nascent market, if there is a market. We're diluting business opportunities in low Earth orbit because, essentially, everybody's chasing the same verticals," Dittmar said. "And we're worried that without very clear milestones for down select and consolidation, we're actually going to extend the period of time that it takes to get things on low Earth orbit after ISS."

That's perhaps an unsurprising view, as Axiom was the first to win a NASA contract for these stations, and appears furthest along in development. Of course the company wants to make sure the pie isn't split into too many pieces, when it was the initial guest at the table.

Among the panelists, Voyager executive vice president of government affairs Eric Stallmer presented the most direct rebuttal:

"It's really going to be a small percentage that NASA is going to be funding these space stations" development, Stallmer said, so each project needs "to go out and raise capital to do this."

For now, NASA expects the Commercial LEO Destinations program to be just a piece of its budget – at around $200 million to $400 million annually. Either that number needs to grow substantially or companies will have to find the investment elsewhere, with the success of these stations hanging in the balance.

• The FAA managed U.S. airspace for a record 92 space missions in 2022, with the regulator continuing to deploy new tools as commercial air travel rebounds to pre-pandemic levels. – CNBC
• SpaceX conducts Starship booster test firing: The "static fire" of the Super Heavy booster prototype saw the company ignite 31 of the 33 Raptor engines. Elon Musk said in a tweet that would have been enough "to reach orbit." The test marked the last major development step before the first Starship orbital launch attempt, which the company hopes will happen "within the next month or so." – CNBC / Video
• NASA chief lauds SpaceX for "big step forward" in Starship testing. In a tweet after the company's test firing, Administrator Bill Nelson declared that "SpaceX's success is NASA's success is the world's success." – Bill Nelson
• Astronaut and Arizona Sen. Mark Kelly calls for more rocket competition, as he praised the "stunning" growth of the space industry but urged companies to build and launch rockets faster. – CNBC
• Debate over Ukraine's use of Starlink reignited: After SpaceX's Gwynne Shotwell mentioned the company has placed limits on how Ukraine's military uses the satellite internet service following reports of soldiers using the tech on drones, high-profile astronaut Scott Kelly, the brother of Sen. Kelly, called on Musk to "restore the full functionality." Musk said the company has not turned off Starlink access, but argued that his company walks a fine line and "will not enable escalation of conflict that may lead to WW3." – CNBC
• Intuitive Machines began trading on Nasdaq, as the lunar-focused space company completed its merger with SPAC Inflection Point. The company raised about $55 million after the SPAC's shareholders redeemed nearly all of the $300 million that was held in a trust prior to closing. – CNBC / Intuitive Machines
• Pair of Saudi astronauts named to Axiom's second spaceflight: The two mission specialists, Ali Alqarni and Rayyanah Barnawi, mark the inaugural members of Saudi Arabia's national astronaut program. They are scheduled to fly no earlier than May as part of Axiom's Ax-2 crew, launching with SpaceX. – Axiom Space
• SpaceX continued to lead China in the launch market in Q4 of 2022, with the company lifting twice as much spacecraft mass to orbit, according to the latest report by Bryce Tech. Both SpaceX and China's CASC conducted 18 launches during the quarter. – Read more
• Blue Origin reveals progress on lunar manufacturing tech: Called Blue Alchemist, the company's reactor prototype "working solar cell prototype" and aluminum wire from simulated lunar regolith, which covers the surface of the moon, through a molten electrolysis process. – Blue Origin
• Russian cargo capsule suffers coolant leak, in the second such incident in under two months. Roscosmos said the spacecraft, Progress MS-21, had a depressurization shortly after another Russian capsule, Progress MS-22, docked with the International Space Station. – SpaceNews
• L3Harris CEO speaks to employees of Aerojet Rocketdyne as merger moves forward: Chris Kubasik said the "companies share very similar DNA and values," and emphasized their national security focus. Aerojet Rocketdyne will hold a shareholder meeting on March 16 to vote on the merger. – Aerojet Rocketdyne
• Maxar completed the "go-shop" period ahead of Advent's acquisition. The expiry of the 60-day window keeps the company on track to be acquired in mid-2023. Maxar noted that it saw "alternative acquisition proposals from 36 potentially interested third parties" during the period, but no competing acquisition proposals. – Maxar / CNBC
• Virgin Orbit investigation closing in on UK launch failure source: In an update, the company said data indicates that "a fuel filter" inside the rocket's second stage was dislodged and is believed to have caused a fuel pump to malfunction, causing the shutdown of its engine mid-flight. The company also noted that "all credible causes of the failure will be addressed prior to the next LauncherOne mission." – Virgin Orbit
• Virgin Galactic begins flight testing of VMS Eve: After a lengthy refurbishment and upgrade process, the company's carrier aircraft took off from Mojave, California, on its first flight in about 18 months. The flight tests are part of remaining development milestones before the company begins launching its VSS Unity spacecraft again. – Virgin Galactic
• Canadian launch startup SpaceRyde files for bankruptcy: The company was building a high-altitude balloon-based rocket system, and had raised about $10 million over the past five years. – SpaceNews
• Inmarsat considers a low Earth orbit constellation, specifically looking at building a constellation called Orchestra for global mobile 5G connectivity. – SpaceNews

• Maxar signs multi-year agreement with Umbra for SAR imagery, giving the former company access to the latter's constellation of synthetic aperture radar satellites. Financial terms were not disclosed. Maxar expects the companies' combined offering to become available in Q2. Notably, Maxar had recently won a $192 million contract from the National Geospatial-Intelligence Agency (NGA), with a SAR data offering as part of the announcement. – Maxar / Maxar
• NASA awards Blue Origin with $20 million contract to launch Mars mission on New Glenn. The contract, to launch the pair of ESCAPADE spacecraft in late 2024, marks Blue Origin's first from NASA for a mission on the coming New Glenn rocket. – Read more
• Alternative satellite internet company Astranis wins $4.5 million Space Force contract: Under a two-year small business award, Astranis will add a type of networking software used by the military on a commercial satellite. The contract includes a potential $6 million more for an on-orbit demonstration. – SpaceNews
• Sidus Space signs $2.5 million deal with Dutch group: The Florida-based satellite company signed an agreement with The Netherlands Organization for Applied Scientific Research (TNO) to deploy and test laser communications tech on Sidus' LizieSat. – Sidus Space
• SpaceX sells oil rigs it planned to turn into Starship launch and landing pads: Shotwell says the rigs "were not the right platform," with the company focusing on getting Starship rockets flying first before it moves forward with sea-based options. – Read more
• Colin Canfield named by Rocket Lab as Investor Relations lead, joining the company after analyst roles at Barclays and Citi. – Rocket Lab
• Josh Brost promoted to senior vice president of revenue operations at Relativity: Brost has been with the company for four years as a VP, having previously spent nearly nine years at SpaceX. – Brost
• Mark Steel joins satellite terminal builder ALL.SPACE (formerly known as Isotropic Systems) as executive vice president of product in marketing, coming to the startup after a 10-year career at Inmarsat. – ALL.SPACE

• Space stocks rallied in line with public equity markets in January, research firm Quilty Analytics noted in a report, posting a 7.2% gain for the month to slightly outperform the S&P 500's gain of 6.2%. – Quilty Analytics
• Iridium reports Q4 results, with increases on both the top and bottom lines: The satellite communications company brought in $193.8 million in revenue, up 24% from Q4 in 2021, and delivered an operational EBITDA profit of $107 million, up 15% year-over-year. Its total subscriber count increased to just shy of 2 million. Its Snapdragon Satellite platform, Iridium's entrance into the direct-to-device market through Qualcomm, is expected to "be available starting later this year." – Iridium
• Aerojet Rockdyne's Q4 brings in more revenue, but lower profit: The company's revenue increased 10% year-over-year to $648 million in the quarter, but its adjusted EBITDA fell 26% to $52 million. – Aerojet Rocketdyne

• Feb. 16: Japan's MHI and JAXA debut launch of H3 rocket, which has been in development for much of the last decade, from Tanegashima island.
• Feb. 17: SpaceX's Falcon 9 launching Starlink mission from California.
• Feb. 17: SpaceX's Falcon 9 launching Inmarsat 6 F2 satellite from Florida.
• Feb. 21 to 23: SpaceCom conference in Orlando, Florida.