Sea Launch Still Faces Problems, Despite Emergence from Bankruptcy and New Ownership
(Source: Forecast International; issued April 18, 2017)
NEWTOWN, Conn. --- With Sea Launch's outlook poor, Russian airliner S7 stepped in to purchase the ailing launch operator in September 2016. S7 co-founder, Vladislav Filev, has ambitious plans for Sea Launch. He wants to compete with commercial companies SpaceX, Blue Origin, Arianespace, and others for contracts to carry satellites into orbit.

However, Sea Launch continues to face a wide range of problems, despite emerging from bankruptcy protection in November 2016 with a more efficient structure. Production, diplomatic, and competitive pressures make it questionable whether it can ever return to flight on a regular basis.

Zenit production has suffered from the same production problems that have plagued the rest of Russia's once vaunted launch industry. A problem production enough components forced Russia to favor the Proton over the Zenit at one point. Even when components could be made available, they suffered from reliability issues that caused a launch failure in 2013, just as Sea Launch was again ramping up operations following its exit from bankruptcy.

The conflict between Russia and Ukraine have exacerbated these production issues. The Zenit is produced in Ukraine, the upper stage is produced in Russia. In response to the conflict, Russia has decided to reduce reliance on foreign-built rockets, including ending all use of the Zenit. Without Russian cooperation on the program, Zenit production ended, and Ukraine's space industry is in shambles.

Sea Launch's home port for its Odyssey platform has also proved problematic. When relations between Russia and the U.S. were relatively warm in the 1990s and 2000s, the Odyssey operated from Long Beach, Calif. Now that relations have soured, operating from the U.S. is unlikely. For a time, Brazil was seen as a candidate for a home port location. However, negotiations fell through, and Sea Launch is back to searching for a home port.

While Sea Launch has dealt with these issues, the market has not stayed still. Competition for launch contracts has become much more intense over the past few years. Established players, like Arianespace, are improving their competitiveness by introducing more efficient production schemes and lower cost launch vehicles. New entrants, like SpaceX, have entered the market with innovative new designs. Even state-owned operators in China and India have become more competitive in recent years.

Sea Launch's new owner will need to address all of these issues in order to become successful in the market. Forecast International will continue to keep a close eye on Sea Launch. However, no production is expected at this time.


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