Main Engine Cut Off - T+237: Virgin Orbit and ABL Suffer Failures

Episode Date: January 17, 2023

Virgin Orbit’s first launch from the UK ended in failure, putting them in an even more precarious financial position. And on the other side of the North Pole, ABL’s first launch attempt ended in failure right on the launch pad in Alaska.This episode of Main Engine Cut Off is brought to you by 43 executive producers—Simon, Kris, Pat, Matt, Jorge, Ryan, Donald, Lee, Chris, Warren, Bob, Russell, Moritz, Joel, Jan, David, Joonas, Robb, Tim Dodd (the Everyday Astronaut!), Frank, Julian, Lars from Agile Space, Matt, The Astrogators at SEE, Chris, Fred, Hemant, Dawn Aerospace, Andrew, Harrison, Benjamin, SmallSpark Space Systems, Tyler, Steve, Theo and Violet, and seven anonymous—and 817 other supporters.TopicsFirst Virgin Orbit U.K. launch fails - SpaceNewsEven before Monday’s launch failure, Virgin Orbit’s finances were dismal | Ars TechnicaFirst launch by ABL Space Systems fails shortly after liftoff – Spaceflight NowThe ShowLike the show? Support the show!Email your thoughts, comments, and questions to [e-mail] @WeHaveMECO on TwitterFollow @[e-mail] on MastodonListen to MECO HeadlinesJoin the Off-Nominal DiscordSubscribe on Apple Podcasts, Overcast, Pocket Casts, Spotify, Google Play, Stitcher, TuneIn or elsewhereSubscribe to the Main Engine Cut Off NewsletterMusic by Max JustusArtwork photo by SpaceX

Hello and welcome to Main Engine Cutoff, I am Anthony Colangelo, here to catch up on a couple of bad turns of events in the world of small launch. Virgin Orbit and AVL both had failures over the last couple of weeks. Two companies in very different positions at the moment, so I wanted to break down what happened with the failures and where these companies go from here. Let's dig in with Virgin Orbit. They had their first launch out of the UK. It was the sixth launch that LauncherOne was going for here, and this was a really hyped up launch. Their first one out of anywhere but Mojave, so this was a major selling point of Virgin Orbit, being able to fly to other airports and depart from there. So a lot of eyes on this launch. It wasn't something

that is just going to hide under the, you know, be able to hide under the cushions. This one is right out there for everyone to watch, and it comes at a horrible time for Virgin Orbit financially, and there's a lot to discuss around this vehicle. As a quick refresher, Virgin Orbit flies Launcher One off of a modified Boeing 747 called Cosmic Girl. They take off from an airport, any airport where they're able to get propellant for their vehicle so they can fill up Launcher One and then take off, fly out over the ocean and drop into their racetrack, right? It's kind of a big oval shape flight path that they take. And then they eventually drop the vehicle off the plane, light the engines and go to orbit. So operationally, this is exactly

the same mission that they've flown. Just matters where they start. But that is really the huge selling point of Virgin Orbit, right? It's the only unique thing that they have. And even that's getting a little less unique by the day. But the unique thing that they've been selling is being able to do exactly this. Take off, fly to your country, load up your satellites on the vehicle, right on your own soil, and then fly them to orbit. And, you know, this is a huge marketing push for them is this domestic launch capability that is somewhat on demand. And, you know, UK government officials were certainly putting out

that those talking points. It's been something that is probably been talked about more in higher level government circles than it has been useful in the sales process based on what I'm looking at. It doesn't really seem like the intrinsic value is there, but it's certainly something that Virgin Orbit can market on. And in this market with a lot of other options, you got to find the unique things that you can do and really sell those as hard as you can. So as much as I'm not really a believer in this kind of aerial launch format, I don't fault them for going out and selling that, right? If you look at the rest of their technical things that they sell, there's nothing really unique or impressive about Virgin Orbit's offering. Their payload is very

small, both in volume and mass. The fairing is very tiny on LauncherOne and can't be, volume, and mass. The fairing is very tiny on Launcher 1 and can't be, I don't think it can be really enlarged at all, maybe lengthened a bit, but really nothing beyond that. And the payload mass, they offer, or they advertise, I should say, 500 kilograms to orbit. I've heard forever from multiple different sources that they've had trouble getting up to that level of performance. And even with some launches like this past one, they've had trouble with the engines getting up to that level of performance. And even with some launches like this past one, they've they had trouble with the engines getting up to a certain level of performance to be able to hit those orbits. So they're probably in the 300 to 500 kilogram range, which is a little bit above what rocket lab flies electron, but not really that much above that. And it's about two to three times lower than this next small sat launch class that's coming in with abl relativity firefly all

sitting into the one or even higher than one ton to orbit range so they're in this awkward payload spot right up just above electron but significantly below these other launchers and those other one ton class launchers are really impinging on the price point that virgin orbit's offering here so rocket lab is is somewhere between seven and10 million. They've risen in price a bit as they've continued their operations and as obviously the economy has gotten the way it has. So they're a little higher than they originally offered Electron for. Virgin Orbit is sitting around $12 million last we heard. A couple of launch contracts come in about that. They're probably $12 to $15 million right now for a new launch. And that's exactly where these

one-ton class launchers are sitting, the $12 to $15 million range. So they're awkwardly small payload, they're awkwardly high price, and importantly, they can't get up to an operational cadence. If you go back and listen to the shows that I've done about the small launch industry over the past several years, a thing that I said about Virgin Orbit, and I hold true to today, is that timing was really everything for them. They were originally projecting their first launch to be in the 2018 range, I believe it was. At that time, Electron from Rocket Lab really was just starting, right? Their first launch was in May 2017. They had a couple of launches in 2018 when they were

getting up to speed, and they were starting to hit their operational cadence. And if Virgin Orbit was able to be there with them at the start of the small launch era, if they were able to be a viable competitor, and at this point, if they were able to be a viable competitor, and at this point, if they were able to be flying as frequently as Electron has been, they may be able to edge out some of these other competitors in the market and dominate some segment of the market, right? At the time, there was a lot of small launchers that were, small launches that were flying with Northrop Grumman vehicles. There was a couple that have even flown on, you know, very underloaded Falcon 9s or in sort of aggregated ride shares on a Falcon 9.

There were missions that they could have taken if they were able to be flying back then. And unfortunately, they have kind of stumbled through to right now where they're still having problems getting up to any sense of a cadence. And at the same time, these new competitors like Relativity and ABL and Firefly are kind of banging down the doorstep, looking like they're going to be ready to start flying at an operational cadence just about the same time that Virgin Orbit is. You know, Virgin Orbit flew two times last year. They said they wanted to fly three, they wanted to fly six this year. That's definitely not going to happen at this point. And we haven't even talked about the financial aspect yet. So the fact that they have this really awkward technical

positioning in terms of their payload capacity and the price points, and then they haven't been able to fly, that's just a horrible mix for a product. And then you look at what is their runway, which is, you know, they've got a couple of tens and millions of dollars in the bank right now. And they have some arrangement with a hedge fund that may provide them with some more funding sometime this year. But that arrangement is very unclear to me about how much of that $200 million or whatever it is left over can be accessed. But they essentially have a couple of months worth of cash left. They burn a ton of cash per quarter. They don't have that much on hand. Their runway looks to be, you know, up sometime this year. So at the same time that they're not

flying, they're undergoing an investigation into a failure. They don't have a huge backlog of sales. You know, like I was saying that the sales hasn't really been that good on the front of like domestic launch capability. It hasn't been a huge contract windfall coming their way, even if they've done a couple of successful launches. So they don't really have a huge sales pipeline. So they're going to be doing an investigation, fixes on whatever it is that went wrong with the second stage here without a big sales pipeline, with not a lot of cash on hand, and they expect somebody to come in and put some more funding into them. I'm not seeing the mix as to why it would be important or interesting for somebody to come in and invest a couple hundred million dollars to get them from where they are now to... It's not just about getting them beyond this year or getting them beyond this investigation.

You have to be able to get them to an operational cadence of six to 12 launches a year at a minimum. And at the same time as all these other competitors are coming on the market. So I just don't see where the attractive option is here for Virgin Orbit to honestly survive. I think the only one I could stumble into as a reasonable answer would be one of the big contractors, the defense contractors, Northrop Grumman, Lockheed Martin, etc. Looks like they want some sort of new agey company to hinge all of their launch success on in the future. Now we've seen Northrop Grumman make a deal with Firefly to collaborate on a new first stage for Firefly's beta vehicle or alpha vehicle, I forget, beta vehicle, right,

the big one. And that would be the first stage that they use in Antares to help that vehicle out. Northrop Grumman does have this kind of small launch side of the industry as their history, they were the ones operating these solid rocket launchers that were able to do small launch. It was very expensive, but they were doing it very successfully. And they're still winning some contracts for those vehicles. Not so much Pegasus, but, you know, Minotaurs and whatnot. So could they come in and say, you know, we've done air launch before. We know how to do this. We could come in and provide expertise and help Virgin Orbit get over that line. Maybe they want to get another liquid launcher on their books. It's not completely

implausible to me to see Northrop Grumman coming in and saying, we're going to buy this company and stabilize it and run it our way and provide them with our backing. It's not completely implausible. I find it unlikely, but I would not be shocked if, you know, in March or April, Virgin Orbit says we've been acquired by Northrop Grumman or something like that. I made this prediction on off nominal that I think Rocket Lab would go that way from Lockheed Martin, that Lockheed Martin would buy Rocket Lab and try to get into that small launch game in that way, just because of where the industry is at, right? Money is really hard to come by. Payloads are really hard to come by. It's really expensive to do this kind of stuff. And Lockheed Martin has run out of their commercial launch capabilities at this point, you know, on their own. They have

ULA in partnership with Boeing, but do they want to get into this market? And is Rocket Lab going to be looking for some sort of exit at some point? Plausibly. And I feel like Virgin Orbit might be in that same category. So I don't know if I'm as confident in this prediction, because I just see Virgin Orbit as such a money sink, to be honest. And, you know, I don't believe in it personally on a technical level or a strategic level. So I'm not seeing them survive the year. But at the same time, if there's some raw parts here and really good engineers for the taking, someone like Northrop Grumman start to get curious and kick the tires a little bit to see what's going on here. You know, at the same time, Virgin Orbit has other stuff on the roadmap. They mentioned last year that they were getting new 747s, two more for the fleet, and they were looking to have that first delivery in 2023. So did they spend a bunch of money on that, expecting that that would be the moment that they scale up while they still haven't solved the technical issues on their launch vehicle itself

that's concerning to me in terms of something that you know i would cut first thing is like get rid of those vehicles we need to focus on the rocket before we do anything else because we can't even get one off the launch pad six times a year let alone one you know three uh 747s worth and some of these can carry two rockets. Like that's just too much. You're doing too much there before you've actually solved the real thing that you're after. So overall, I'm just very concerned about Virgin Orbit. I do not believe in them as a technical solution or a business solution at this point. So, you know, I don't want to write them off too soon, but it does feel like, you know, this is the moment that Virgin Orbit is, is, uh,

needs to figure out what is, what is their future. And I'm not sure anyone else out there is going to believe in them the same way that they do. And unfortunately, at a certain point, you have run out of cash. Uh, and, uh, we'll see exactly if and when that happens this year. So sorry for the downer, but I'm not, I'm not digging where Virgin Orbit's at at this time. So that stinks, man. It stinks to see that happen in the industry. And, um, we'll see exactly how see that happen in the industry. And we'll see exactly how it shakes out. All right, before we get into the ABL side of things, I want to say thank you to all of you who support Main Engine Cutoff over at mainenginecutoff.com slash support. There are 860 of you supporting the show every single month. And I'm so thankful for your support,

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I'll vouch for you as an executive producer because you are literally my boss. This is an entirely listener-supported show. So if you like what you're listening to, if you want to get more of it, managingcutoff.com slash support is where to do that. You can join up at $3 a month and get access to Miko Headlines, a podcast I do every week to 10 days-ish, running through all the stories in the industry and keeping you up to date on everything going on. $5 a month or

more, you get access to the Off-Nominal Discord, which is increasingly the place to hang out and talk about space, as some other social networks have some throes, I guess. So really good stuff in there if you want to help support the show and get some extra stuff your way, uh, please join us. All right. Over in the world of ABL, this is, uh, ABL space systems, a new company that has not yet attempted to launch until this one. And, uh, there was a lot of hype around this as well, because they have been somewhat mysterious. They have a couple of unique aspects to their vehicle. Um, they are, uh, one of the proponents of this containerized launch system where they have very little infrastructure, but they can bring it around to different places in the world. So in this case, they brought all their hardware up to Kodiak in Alaska. Astra's is like this as well,

where they try to bring their infrastructure with them so that they don't have to build a dedicated pad and they're able to be a little flexible with where they can launch you know they can take it to alaska they could take it to florida they could take it to california basically wherever there's a flat patch of concrete and they can get the consumables they need they can launch from there so similar to you know what version orbit is offering and in flexibility and being able to deploy to different places right in the same vein abl is going to be launching out of, is it the Scotland one at some point? So, you know, they are impinging on Virgin Orbit's one unique thing, even a little bit more so than I mentioned in the first segment. But ABL unfortunately failed on their first launch. They lifted off and very early in the

flight, all nine of their engines, the E2 engines that are on the first stage of their vehicle called RS1, all nine shut down simultaneously, they said. And then the vehicle impacted the pad and was destroyed. They said there is damage to the launch facility. They have not said explicitly what that means in terms of the hardware that they have at the launch facility. Did this take out 100% of the infrastructure that they brought with them? Or did it kill, you know, the actual launch pad itself, but the support vehicles, the support infrastructure are still intact? We don't know how extensive the damage is. And we don't know how unique that that infrastructure was, right? Do they have multiple versions of this that they were building simultaneously so that they can be in more spot

than one at once? You know, how long of a delay is this going to be before their second launch why did the engines all shut down prematurely at the same moment you know was that an issue with uh the actual avionics was an issue with propellant feeds what was the problem that led to it all happening simultaneously that's a really you know not unexpected way to fail in your first launch but for instance you know you look at the rocket or the uh the firefly alpha first launch they made it a pretty significant way through their flight even with an engine failed um they got more data than just a couple seconds worth so you know it doesn't i felt better about firefly going for their second launch attempt than i will about abl put it that way so i do think they're going to have a little bit of work to get through here. They've been

not very talkative and very mysterious about what their plans are generally. So we don't know exactly when they'll get back on the horse, but they appear to be pretty well funded at this point. I don't, this isn't something that makes me think, oh, this company is going out of business tomorrow, but I am very hopeful in this company because I find what they're doing attractive. I really like the idea of this kind of containerized launch system this kind of vehicle with this payload capacity right there above one ton to orbit for a pretty good price you know low tens of millions of dollars um they do have some deals with people like rocket uh lockheed mart Martin. Amazon signed some stuff with them as well

for their initial satellites. Those are not going to launch on ABL Spaces RS1 at this point, but they do have some launches still slated. So I really like what I'm seeing from ABL, but I just want to know a little bit more about what happened here. So unfortunate, not unexpected, doesn't give me great concern,

but I do think they're going to have another launch or two before they're successful. So, you know, can they get on the horse this year and actually start flying a couple of times and, you know, next year, make it six times? That would be a huge success scenario in my head. Now around the industry and small launch, we still have some good stuff on the books coming up. So next week, as I talked to you right now, it's still scheduled for January 23rd. Rocket Lab will be flying out of Virginia for the first time. I'm going to be driving down to see that launch, which I'm really excited about. Relativity's first launch is coming up pretty soon out of Florida.

We don't know an exact timeline, but they are getting increasingly close to launching that. Firefly is still out there kicking around with some of their early launch attempts. So it does, you know, we are getting this momentum behind the small launch industry in an interesting way. But what is this year going to be like from a market perspective? How are the payloads going to be shared around the industry? When people need funding, where's it going to come from? Is it going to come at all? Are there going to be some sort of merger and acquisition activity in the year? Which are are going to be the targets for that? You know, at the same time that these are really getting operationally useful, a lot of these companies are growing their capability. So Rocket Lab is working to move from Electron to Neutron, a much bigger vehicle.

Relativity hasn't even flown Terran 1 yet, and they're talking about phasing it out for Terran R, which is a much bigger vehicle. You know, at the same time, the US Space Force, as I mentioned on a recent episode, is going to be going and putting out information about the National Security Space Launch Phase 3 acquisition. Is that going to include room for vehicles that are in this range of one ton plus? Because right now, those are a different program entirely. But as these companies start to look at bigger and bigger vehicles, Neutron and Terran R, you know, they're going to start playing in that space just as much as Falcon 9, Vulcan, New Glenn is. And there's a lot of potential for interesting shakeups in this section of the industry this

year. So definitely something we'll be following along with. If you want to follow along, keep it right here, MainEngineCutoff. MainEngineCutoff.com is where all the show notes are. As I said earlier, support at MainEngineCutoff.com is where all the show notes are. As I said earlier, support at mainenginecutoff.com. If you've got any questions or thoughts, hit me up on email anthony at mainenginecutoff.com. I always say

Twitter at wehavemiko. I will now say Mastodon. I'm on the spacey.space server, which is a fun one, and I'm just at miko on there. So if you're poking around on Mastodon, I am too. I've got it in the show notes. You can check it out if you would like. But until next time, thanks so much for listening. Thanks for your support as always, and I'll talk to you soon.