Lockheed Martin is predicting a prolonged slump in the satellite market. The US company's civil and military space sales are expected to remain flat at $6.8 billion annually with no near-term recovery seen in commercial satellite launches, due to the collapse of the international telecommunications market, says chief operating officer Robert Stevens.
The company is completing a review of its space business and may sell assets to reduce overcapacity in response to weakening demand. After deciding the market is too depressed to sell its commercial satellite business, Lockheed Martin is looking to cut costs to break even on production of only two to three spacecraft a year - down from the six originally envisaged.
Telecoms operators anticipated a boom in internet traffic by launching numbers of communications satellites - and now there is a glut of satellite capacity, leading to a price slump. Just seven commercial satellite orders were booked by the six major manufacturers in 2002, the lowest total in recent history. There are hopes for double-digit sales in 2003, but a recovery is not expected to begin before 2004. Lockheed Martin, meanwhile, is integrating its satellite and launcher businesses in a bid to reduce costs.
Because of the effect of the commercial downturn on the launcher business, both Lockheed Martin and Boeing are looking to the US Air Force for $1 billion between 2004 and 2009 to secure the continued availability of the new Atlas V and Delta IV evolved expendable launch vehicles. An extra $200 million a year in funding for land leases and engineering work would help the companies stay afloat throughout the launch recession.
Boeing, meanwhile, is facing "major technical and funding problems" with its Future Intelligence Architecture spy-satellite programme for the National Reconnaissance Office, according to the USCongress. Reports suggest the satellites have more than doubled in weight to almost 10t, launches are two years late, and system costs may almost double to $17 billion.
Congress plans closed-door hearings on the programme, which Boeing won from incumbent spy-satellite supplier Lockheed Martin.
Source: Flight International
