ULA launch rates knocked out by SpaceX pricing

 United Launch Alliance, for last three decades only launch service provider for GPS program, lost its position in favor to main competitor on the market.

It is strange situation when present launch service provider is not joining contest for launching next generation GPS satellites and competitor captures the contract by default. It is surprising even more if we take under consideration that cooperation between U.S. Air Force and companies which later established ULA, under GPS program, lasted since launching first GPS satellite in 1978. It means that for 38 years United Launch Alliance could count on stable income and reliable partner which was U.S. Air Force. After resigning from participation in contest in October 2015, decision of Department of Defense could be only one - SpaceX won worth $82 million contract for launching first GPS III satellite. From the beginning it was not a secret that prices for every Atlas V launch are higher than costs of Falcon 9. According to official data, single mission of Atlas V costs are over $150 million while one mission of Falcon-9 1.1v costs around $61 million. Launch of GPS Block IIIA contracted for 2018 will cover manufacturing Falcon-9, assembly, integrating satellite with rocket, launch operations and spaceflight certification. Whole cost are 60% of costs proposed by United Launch Alliance what clearly shows that in present condition ULA is not able to compete with SpaceX. But ULA is not resigning and due the fact that Block III will cover five satellites, company declares will to start in bids for next launches. But it means that United Launch Alliance will be forced to reduce prices, what of course means cost cutting. Now if Atlas V is concerned, its construction could be redesigned for wider utilization of most cost effective technologies, but due the fact that ULA is going to replace it with Vulcan rocket in the end of 2019, it is less probable that company will invest money in Atlas V. It means that more possible is restructuration of the company and layoffs. ULA employs 3400 people and is planning to reduce this number in 2016 for about 375 and from 400 to 500 in 2017. According to Tory Bruno ULA CEO 2016 layoffs will be voluntary. It was not unveiled if reductions in 2017 also will have such character, but still reduction for about 25% are sign that ULA is determined to low their launch price. Reduction of employment in 2016 and 2017 are not first in ULA recently but first in such large scale. On June 2015 Company dismissed 12 executives what is 30% of their managing crew.

Sources:
http://www.reuters.com/article/us-space-spacex-launch-ula-idUSKCN0XP2T2
http://www.reuters.com/article/us-space-spacex-launch-idUSKCN0XO2TC
http://www.denverpost.com/business/ci_29762245/ula-expects-another-400-500-job-cuts-2017

Facebook