The global space launch services market size was valued at USD 13,280 million in 2021 and is estimated to reach an expected value of USD 50112 million by 2030, growing at a CAGR of 15.9% during the forecast period (2022 – 2030). The operations of suppliers of space launch services are related to the market for space launch services. It entails numerous actions, including ordering, conversion, building, stacking and assembling, payload integration, and launch. Private launch service providers' entry into the industry led to new space launch technologies and a fall in launch costs, ushering in a new stage in the market's development.
The rise in satellite and testing probe launches is a significant factor in the market's expansion. Additionally, the expansion of government and private investment substantially impacts market growth. Another problem impeding industry expansion is a lack of skilled labor and opposition to embracing new technologies. Meanwhile, market players have a lucrative potential due to initiatives to lower the cost of launch services.
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Rise in Government Investment in Space Exploration Activities
Nineteen planetary or space exploration missions have been launched in the last ten years by nations such as the United States, India, China, Russia, Japan, and organizations like the European Space Agency. Every year, the size of the global government budget rises. Governments are spending money on infrastructural support for space exploration missions and sponsorship. A lack of funding has occasionally constrained the space programs. The intense competition in the space business has changed the situation today. Many countries are investing in launch vehicles and facilities to be launch-capable nations and maintain an advantage in the space race. In 2019, the European Space Agency (ESA) had a government budget of $6,300 million, the Chinese National Space Administration (CNSA) had a budget of $11,000 million, and the National Aeronautics and Space Administration (NASA) had a budget of $19,500 million. Thus, the market for space launch services is driven by rising spending and government space investments in such operations.
Rising Demand for Commercial Non-Geostationary Satellite Orbit (NGSO) Space Launches
Earlier, all types of orbits were considered for communication satellites; however, it was later discovered that non-geostationary satellite orbit could provide actual global coverage owing to lower path loss. The communication industry is opting for NGSO for their satellites owing to their altitude and low latency. This type of satellite contributes to the efficient use of the telecommunication network, with performance comparable to that of terrestrial networks. They require fewer boosts to launch with a comparatively low building and launching cost. This factor drives the growth in the number of satellite launches, boosting the launch service market.
High Initial Investment Associated with Space Launch Services
The initial cost for launch services is very high. A launch service can cost roughly $1 million to $100 million. Initially, the space activities and launching services were either controlled by the government & military or by the space agencies formed by the government. The market was monopolized as there were fewer to no other players. The industry still has a few market players, primarily concentrated in the US and European regions. The initial cost of providing launch services hampers the growth of the launch services market. The launch services provider must invest hugely to procure the infrastructure and supporting activities required for the launch. Also, the minor impact of the coronavirus pandemic has affected the space industry. In addition, global space-related events, such as satellite 2020, CABSAT, sea air space, SMi Small Satellites Conference, and many others, have either been canceled or rescheduled. The start of the pandemic will affect the space industry in the future owing to the limited workforce & investment from giant players for the launch. Moreover, the maintenance activities and getting the infrastructure ready for every launch requiring specific preparations affect the launch service cost. The small launch service-providing companies find it challenging to survive in the market owing to the numbered launches and growing private players in the industry.
Focus on Price Reduction for Space Launch Services through Product Innovation
High launch costs have always acted as barriers to space technology advancements. Lower launch costs will increase future space exploitation, exploration, and expansion activities. Earlier, to keep launch costs constricted which were priced according to payloads weight per kg, the development and designing of space crafts, satellites, and other payloads were done with the use of lesser material with high-performance properties so that the payload weight was controlled. Reduced launch cost will directly impact the design and development as it is expected to provide a way for robust, reliable, better performing, and heavier payloads. In addition, developing reusable rockets and launch vehicles reduces the cost. The Falcon 9 has been reused and has reduced the cost factor by two times. Thus, the price reduction in launch services offers a lucrative opportunity for launch services market growth.
The global space launch services market is segmented by payload, launch platform, service type, launch vehicle, end-user, and region.
By payload, the global space launch services market is divided into satellite [(further segmented into small (less than 1,000 kg) and large satellites (above 1,000 kg)], human spacecraft, cargo, testing probes, and satellites. The satellite segment is expected to be the highest contributor and is estimated to grow at a CAGR of 16.7% during the forecast period. The segment is mainly driven by commercial applications of satellites such as voice & data transmission, the connection between ships, aircraft, vehicles, remote regions, meteorological information, surveying land, and many others. Since telecom demand is continuing its shift from television broadcasting to internet connectivity, satellite technology is being adopted as a vital component in the Internet of Things (IoT), thereby driving the segment. There has been an increase in small satellite launches. Using satellite communications for broadband services in remote areas drives the satellite segment. The Boeing Company and ViaSat-3 are working on a project of three such satellites to deliver 100mbps or more speed. Moreover, launching small satellites weighing 10kg, such as CubeSats, is affordable for many companies to launch their satellites. This drives the satellite segment growth.
By launch platform, the global space launch services market is categorized into land, air, and sea. The land segment is expected to be the highest contributor and is estimated to grow at a CAGR of 15.9% during the forecast period. The trend for miniaturizing satellites is driving the segment as the number of launches increases yearly. The rise in deep space exploration activities also leads to the launch of several test probes that significantly impact the space launch services market. Moreover, the advanced technology-based infrastructure system for space launch has propelled significant growth in efficient operations for land-based space launch services. The infrastructure includes handling fuel, assembling the launch vehicles, preparing space for launch, and others. Thus, the rise in this type of infrastructure and the increase in demand for advanced launch pad management systems, along with the entry of private companies, strengthened the growth of the space launch service market.
By service type, the global space launch services market is bifurcated into pre-launch and post-launch services. The pre-launch segment was the highest contributor and is estimated to grow at a CAGR of 16.2% during the forecast period. With the entry of private players in the launch service market, multiple options are now available. Several companies offer pre-launch services that include the manufacture of the payload, assembly, transportation to and from the launch site, launch vehicle, and launch to orbit or space. The pre-launch services market accounts for a significant share. The pre-launch services also include insurance and data tracking. These services are sourced through contracts or agreements. Due to increased satellite launches, pre-launch services are primarily in high demand in the commercial sectors.
Based on launch vehicles, the global space launch services market is classified into small (less than 300 tons) and heavy (more than 300 tons). The heavy launch segment was the highest contributor and is estimated to grow at a CAGR of 16.2% during the forecast period. Heavy launch vehicles account for a significant segment share and are expected to experience rapid growth despite the high demand for small satellite launches. The various human spacecraft, cargo, and interplanetary missions require the lift of heavy payloads, which is anticipated to depend on the heavy launch vehicle.
By end-user, the global space launch services market segment is divided into government & military, and commercial sectors. The government & military launch segment was the highest contributor and is estimated to grow at a CAGR of 15.4% during the forecast period. The high competition in the space sector across the globe has increased government spending and space budgets in space activities. The involvement of the military and defense to collect intelligence, surveillance, and keep an eye on border activities owing to several national security risks has also contributed to boosting segment growth.
Region-wise, the space launch services market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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North America accounted for the largest market share and is estimated to grow at a CAGR of 17.4% during the forecast period. The US has long been present in the space race. The government budget for space programs in 2018 was around $50 billion. The US has been the dominant space power across the military, intelligence, science, exploration, and commercial domains. The launch service providers are present in large numbers in the US region. Private players such as SpaceX, Northrop Grumman Corporation, and many others are shaping the current launch service market in the US In 2019, the US Space Force (NASA) received a 2024 deadline for returning Americans to the moon, and private companies, the world over raised billions of dollars for everything from rockets to antennas. The start of 2020 has shown no significant signs compared to previous years in launching the number of satellites in the space sector. The US government has started contracting private launch service providers for various satellite and cargo missions. Since 2014, US providers have entered the existing share of commercial launches occupied by Russian providers. It was mainly due to the entry of SpaceX's Falcon 9 vehicle into the global market at lower prices attracting significant business.
The Asia Pacific is the second largest region. It is estimated to reach an expected value of USD 1925 million by 2030, growing at a CAGR of 12.9%. China performed 39 launches in 2018, which was more than double as compared to 2017 and exceeded the number of launches in the US and Russia. In 2019, China successfully tested sea-based launch and became a sea-launch-capable nation. China now holds the capacity for Sea-based and land-based launches. In addition, China has been carrying payloads, such as human spacecraft and cargo missions, to and from the Chinese space station.
Europe is the third largest region. The Russian launch service providers, such as international launch service, Roscosmos, Starsem, and many others, are continuously working toward combating the competition they are facing due to heavy launch price differences from the US, China, and India launch service providers. The vehicle families are being upgraded one by one to offer reliable launch services. The Russian space agency has also suffered from failures related to Fregat upper stage used by the Soyuz vehicle. However, the launches performed by the Russian service providers gradually decreased from 28 in 2015 to 19 in 2016, the launches performed in 2018, 20 from which one failure was recorded. In addition, the Russian government is planning to invest $7.78 billion in space launch services industry development.