Another blockbuster year for the aerospace industry is drawing to a close. In fact, 2022 may have been the space’s most blockbuster year in recent memory – at least since 1969. The historic cadence of SpaceX, the launch of Space Launch System and the return of the Orion capsule, major engineering demonstrations, ispace’s completely private lunar mission… it was a memorable year.
There is a lot to look forward to – so much, that next year could even surpass this year as the biggest for the aerospace industry yet. But many questions remain, especially about the nearer-term economic outlook, the ongoing geopolitical instability, and (ahem) some announced timelines that may or may not materialize. Here are our predictions for the aerospace industry in 2023.
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1. More pressure at launch
It seems clear that there will be increasing pressure on the launch market as even more next-generation vehicles come online. We’re looking forward not only to the heavy-lift rockets – such as SpaceX’s Starship and United Launch Alliance’s Vulcan – but to a slew of smaller and medium-lift launchers that aim for low cost and high cadence. These include Relativity’s Terran 1, Astra’s Rocket 4, ABL Space Systems’ RS1, Rocket Factory Augsburg’s One launcher, and Orbex’s Prime microlauncher. As we mentioned above, space industry timelines are notoriously tricky (and this caveat applies to the entire message), but it’s likely that a handful of new rockets will fly for the first time next year.
Evidence that new vehicles are driving down prices and increasing inventory means more launches and dates are available for private and public companies – and established players will have to work hard to maintain the lead they’ve built.
2. Major developments from the UK, China and India
The international space scene will continue to grow. While there is a lot to look forward to from Europe, we have our eyes on the UK, China and India. From the UK, we are expecting the country’s first-ever space launch with Virgin Orbit’s “Start Me Up” mission from Spaceport Cornwall. We also expect a lot of activity from the Indian Space Research Organization, as well as the launch startup Skyroot there. China had a big year 2022 – including completing its own orbiting space station and sending multiple crews of taikonauts – and we predict there will be no delay next year as the country tries to keep pace with US industrial growth.
How exactly the decentralization of private space beyond a handful of major launch providers and locations will affect the industry is hard to say, but it will certainly help diversify the projects and stakeholders that enter orbit.
3. Continued growth for satcom and earth observation
Image Credits: Pixel
As with the launch, we will see even more large and small satellite constellations emerge next year that will put pressure on the satcom and Earth observation (EO) industries. Just two examples: Amazon’s long-awaited Project Kuiper is likely to launch for the first time next year, and Pixxel will launch six high-resolution hyperspectral imaging satellites in the second half of the year.
Most estimates assume both satcom and EO will grow more over the decade, so we don’t expect newer players to displace existing players. But we think we will see even greater adoption of, say, Starlink or sat-to-cell services here on Earth, as well as even greater relevance to Earth sensing technologies in sectors such as agriculture and mining and to understanding climate change.
4. Capital management helps determine winners and losers
The macroeconomic environment is bad. High inflation, high interest rates and high risk aversion are making cash more expensive than ever. We see this trend diminishing somewhat, but not completely, so we predict that capital management will be a big determinant of startup survival. Investors will also be more than ever looking for technical differentiators and real market potential.
“One thing that the market has changed a little bit is that when you’re doing your technical commitment, I think it’s more important than ever that the company you’re backing has a very clear technical differentiator and advantage,” Emily Henriksson of Root Ventures said on stage at TC Sessions: Space earlier this month.
In the space industry in particular, we saw a real slowdown in investment in 2022. Many aerospace companies that went public through a SPAC merger continue to underperform. In 2023, it’s all about managing debt, institutional bloat (and potentially, sadly, more layoffs), and capital management.
5. Private astronauts reach record numbers
Image Credits: Mario Tama / Staff / Getty Images
Private…astronauts? Ten years ago, that sentence would have made no sense. But not anymore: In 2022 alone, nearly 20 people went to suborbital space aboard Blue Origin’s New Shepard rocket, and four people flew to the International Space Station on Axiom Space’s Ax-1 mission. Next year we expect these numbers to be even higher. Polaris Dawn, billionaire Jared Isaacson’s private spaceflight program, won’t just make its first mission; Axiom will conduct its second private launch to the ISS early next year.
In 2021, a ticket to space barely existed; in 2022 it just became unusual; in 2023 we will probably get tired of hearing about it! Also expect to hear more next year about the next big milestone in space tourism, privately accessible space stations, but don’t expect any serious movement there until companies figure out how to make the business work.
6. More activity on the moon and cislunar space
This year comes to a close with ispace’s Mission 1, the world’s first fully privately funded and built lunar lander mission. But that’s just the beginning. Look out for even more landers going to the moon next year — we’ve got our eye on Firefly Aerospace’s Blue Ghost lander and Astrobotic’s Peregrine — and even more infrastructure moving to cislunar space.
As more lunar tech companies move forward on their goals, those that don’t will become even more conspicuous. Mergers and acquisitions in this space should come as no surprise.
7. Even more emphasis on US manufacturing as the supply chain crisis continues
Our final forecast is broader, but has major implications for the space industry. We see investors and founders putting even more emphasis on domestic supply chains and manufacturing in 2023, and this is only likely to increase as relations between the US and foreign governments, especially China, deteriorate further.
