For decades, space-launch providers have survived, and prospered, on government support in the form of development funding, launch contracts and infrastructure subsidies to maintain access to space.

That is changing as international competition increases, privately funded players enter the market and government budgets come under pressure. The result is an unprecedented set of challenges to traditional launch providers even as the industry continues to worry about future demand.

The replacement cycles of large commercial communications-satellite operators that have driven demand for launch services are nearing an end and, beginning around 2014, fewer launches are expected. In addition, budget constraints on governments are expected to limit their satellite procurements.

Europe's government-supported Ariane 5 currently launches roughly half of the world's commercial satellites, but faces increasing competition from the Russian Proton, which remains competitive despite a spate of launch mishaps. China, India and Japan are all developing potentially competing launchers, and SpaceX in the U.S. has more than $1 billion in commercial launch contracts for its privately developed, low-cost Falcon 9.

In November 2012, the European Space Agency agreed to proceed with the upgraded Ariane 5 Midlife Evolution (ME) and to continue studying a modular, lower-cost successor dubbed Ariane 6. Germany is backing the Ariane 5ME, to fly in 2017-18, and a decision has been set for 2014 on development of the French-backed Ariane 6, to enter service after 2020. French space agency CNES is studying three modular configurations for the Ariane 6, two solid-propellant and one all-liquid. All would use the Vinci cryogenic upper-stage engine under development for the 5ME.

Although it lofts a handful of institutional missions a year, Arianespace's business model is built on executing five dual launches of commercial spacecraft annually. The French say Ariane 5 is viable if it launches six missions a year—government and commercial—but would be unprofitable if it lost just two commercial satellites to competing vehicles. They estimate a solid-rocket Ariane 6, which would launch just one satellite at a time, could survive on eight launches a year—five commercial and three institutional.

Similar challenges face United Launch Alliance (ULA), which provides Atlas V and Delta IV launches for the U.S. government under the Evolved Expendable Launch Vehicle (EELV) program. The merger of Boeing and Lockheed Martin's launcher businesses to form ULA, satellite delays and NASA's withdrawal from the market have driven up launch costs under EELV.

The U.S. Air Force is under pressure from Congress to end a contract that provides infrastructure support to ULA to maintain assured access to space, and to open the launch services contracts to competition. As a result, the Air Force plans to begin by competing low-risk launches between new entrants while keeping the mission-critical launches with ULA.

Lockheed with the Athena, Orbital Sciences with the Antares and SpaceX with an upgraded Falcon 9 have formally stated their intent to certify their boosters for national security missions. Once certified, they will be allowed to compete for launches. These could begin in 2014.

While Europe sees India and Russia as its main competitors in the future, it is SpaceX that continues to shake up the market. The company conducted its first two resupply missions to the International Space Station (ISS) in 2012 using the Falcon 9 booster and Dragon cargo spacecraft, and is on contract to fly 20,000 kg (44,000 lb.) to the ISS through 2015.

SpaceX is upgrading the Dragon to carry astronauts and plans its first demonstration flight in mid-2015, with a goal of beginning commercial crew transportation services to support the ISS in 2017. SpaceX was one of three companies awarded contracts to develop vehicles under NASA's Commercial Crew Integrated Capability (CCiCap) program. The others are Boeing with the CST-100 capsule and Sierra Nevada with the Dream Chaser reusable lifting-body vehicle, both launched by Atlas V.

CCiCap is a commercial adjunct to NASA's plan to develop the heavy-lift Space Launch System (SLS) to support human spaceflight missions and replace the space shuttle, which was retired in 2012. The SLS is intended to launch the Orion multi-purpose crew vehicle—development of which began under the now-canceled Constellation program—and other equipment into deep space.

A first uncrewed flight of the SLS is planned for 2017, followed in 2021 by the first launch of the Orion capsule and up to four astronauts. The SLS will use RS-25 engines from the shuttle and the J-2X upper-stage engine developed for the canceled Ares I booster. The initial 70,000 kg-payload version of the SLS will use two shuttle-style solid-rocket boosters. The evolved version, with up to a 130,000-kg payload, will use advanced liquid or solid boosters.

As NASA develops the SLS, Russia and China will be the only countries able to transport humans into space. While Russia continues to fly the Soyuz to ferry crews to the ISS, China is developing a manned space program that includes the Shenzhou capsule (four crewed flights to 2012), Tiangong laboratory (first launch in 2011), and a space station that is planned to be launched in sections between 2015 and 2020.

Virgin Galactic is hoping—pending successful powered flight tests—to start passenger flights with its SpaceShipTwo by the end of 2013. XCOR Aerospace plans to begin flight tests of its two-seat Lynx in early 2013, and flights carrying tourists and small science payloads by late 2013.

Virgin Galactic also will market SpaceShipTwo for sub-orbital science missions and its WhiteKnightTwo carrier aircraft for small-satellite launch services. Announced in July, the LauncherOne air-launched booster is designed to carry 100-kg smallsats into Earth orbit for under $10 million, beginning in 2016. Both Surrey Satellite Technology and Sierra Nevada are developing satellite buses optimized for LauncherOne.

A new era in commercial space transportation is open. To see a video of projects under development for the next space launches, check out the AW&ST digital edition on leading tablets and smartphones or go toAviationWeek.com/video

Satellite Launchers To Watch
MODEL/DESIGNATION LIFTOFF MASS (LB.) GTO PAYLOAD (LB.) LENGTH (FT.) FAIRING DIA. (FT.) STAGE/NO./TYPE LAUNCH SITE MANUFACTURER
Arianespace
Ariane 5 ECA 1,719,600 22,000 166 16.4 0: 2 X solid; 1/2 cryo Kourou, French Guiana EADS Astrium
China Great Wall Industry
Long March 3B/E 1,011,900 12,000 185 11 0: 4 X liquid; 1/2 liquid; 4 cryo Xichang, China CALT
Indian Space Research Organization (ISRO)
GSLV 912,710 5,500 161 11.1 0: 4 X liquid; 1: solid; 2: liquid; 4: cryo Satish Dhawan, India ISRO
International Launch Services (ILS)
Proton Breeze M 1,547,640 14,550 174 14.3 1-4: liquid Baikonur, Kazakhstan Krunichev
Japan Aerospace Exploration Agency
H-IIA 204 967,650 13,230 174 13.4 0: 4 X liquid; 1/2 cryo Tanegashima, Japan Mitsubishi Heavy Industries
Sea Launch
Zenit 3-SL 1,042,000 13,230 200 13.6 1-3: liquid equatorial sea launch Yuzhnoye
Space Exploration Technologies
Falcon 9 735,000 10,000 180 17 1/2: liquid Cape Canaveral or Vandenberg, USA SpaceX
United Launch Alliance (ULA)
Atlas V 551 7,737,400 19,260 191 17.7 0: 5 solid; 1 liquid; 2 cryo Cape Canaveral or Vandenberg, USA ULA