SpaceX the Alan Notes

SpaceX, the private space company founded by billionaire Elon Musk, successfully launched a Thai broadcasting satellite from Cape Canaveral January 6, 2014.

(Photo: Courtesy of SpaceX)

The recent successful launch of a Thai broadcasting satellite by a SpaceX Falcon9 rocket signals the beginning of a new competitive environment for United Launch Alliance, a Colorado company that is a major private sector employer.

For years, Centennial-based United Launch Alliance (ULA) has held a monopoly on lucrative launch contracts for the United States Air Force, which launches many of the country's largest and most important defense and intelligence satellites. But in 2012 the Air Force, seeking to reduce costs, announced plans to increase competition for its launch contracts. With its third successful launch of the Falcon9, SpaceX, which was founded by billionaire entrepreneur Elon Musk, has cleared the first hurdle to qualify as a contractor. After an Air Force review, SpaceX could be competing with ULA for launch contracts as soon as this year.

Marco Cerceres, Sr. Analyst and Director of Space Studies at the Teal Group, says United Launch Alliance needs to be aware that it faces a new paradigm in the space industry. "They need to accept that they are not too big to fail. If they don't change, in 10 years they could be out of the market."

ULA says it welcomes the new competition and while it is working to reduce costs, it emphasizes the reliability and success rate it brings to each launch. Price is only one factor of importance to the Air Force; reliability is crucial when launching billion-dollar satellites that are critical to national security. In fact, the Air Force has already granted 34 of the next 50 launches to ULA, opening only 16 to competition.

The stakes are high for Colorado. ULA employs more than 1, 700 people in the state, and they are important jobs. According to a Brookings Institute study, launch-related jobs in Colorado paid an average wage of $107, 000 in 2011, compared to the state private-sector average of $49, 000. And the job growth in the sector from 2002-2011 was an impressive 67%, compared to 4.4% overall.