Jeff Bezos' space company Blue Origin successfully conducted a test launch of its reusable rocket New Glenn on the 16th (Korean time). Although it failed to recover the first stage rocket for reuse, the second stage rocket reached its intended orbit around Earth, proving its space transportation capabilities. Blue Origin is expected to emerge as a strong competitor to SpaceX, which has virtually monopolized the space transportation business.
Blue Origin will likely need technical improvements for the reuse of the first stage rocket of New Glenn, but it is being evaluated as having secured the transportation capabilities for the Kuiper Project. The Kuiper Project is Blue Origin's satellite internet construction initiative, aimed at countering SpaceX's Starlink venture. The goal is to launch up to 3,236 communication satellites into low Earth orbit (LEO) within the next decade to provide internet services across the globe.
The aerospace industry anticipates that Blue Origin will ramp up its efforts on the Kuiper Project following the success of this test launch. Even if reusable launch technology is not perfected, having proven its space transportation capabilities, it is believed that there will be no significant obstacles to placing communication satellites into orbit.
For Blue Origin to catch up with SpaceX, it must successfully establish its own satellite internet business. This forecast stems from the structure of SpaceX's business. According to industry analysis, Starlink is generating the largest revenue among SpaceX's ventures.
Last year, SpaceX's Starlink venture is estimated to have generated about $4.5 billion (approximately 6.5 trillion won) in revenue. The launch vehicle business follows with about $3.5 billion (around 5 trillion won), the space exploration business generated $700 million (about 1 trillion won), and the defense business brought in $500 million (approximately 700 billion won). While SpaceX has gained industry attention due to its reusable launch vehicles, the actual revenue stems from the satellite service business.
There are analyses suggesting that the space transportation business may be less profitable than expected. The industry notes that while SpaceX continues to lower the launch expense of its reusable Falcon 9, the launch expense remains high compared to revenue. As of now, the known expense for a single launch of the Falcon 9 is approximately $60 million (around 87.4 billion won). Considering the transportation expense for satellites, the actual launch expense is higher than the estimated breakeven point of $50 million (approx. 72.8 billion won). So far, it hasn't been easy for the space transportation business to turn a profit.
As Blue Origin enters the space transportation industry and price competition begins, it is expected that the profitability of launch vehicles will decline further. Jo Kwang-rae, former head of Korea Aerospace Research Institute (KARI), noted, "SpaceX has claimed it would cut the satellite launch costs that customers pay in half, but the actual satellite launch expense is still reported to be high," and added, "As Blue Origin begins its full-fledged space transportation business, it is expected that satellite launch expenses will significantly drop due to price competition."
For launch corporations to enhance profitability, they ultimately need to create sustained launch demand and reduce launch expenses. However, it is currently challenging to secure a number of launches sufficient to lower expenses based solely on demand from satellite corporations. This implies that by building a satellite internet network, they must generate their own demand to maintain competitiveness.
Former Director Jo said, "As Blue Origin's space transportation capabilities are proven, the next fierce battle with SpaceX will be in the space internet business," and explained, "For increased revenue and reduced expense, Blue Origin also needs to accelerate its Kuiper Project."