Orbital Tumbles After Rocket Blast Puts Launches on HoldRichard Clough
Orbital Sciences Corp.’s future launches could be delayed for a year or more after an explosion destroyed an Antares rocket yesterday seconds into a mission carrying supplies to the International Space Station.
Orbital, which plans to submit a bid for the next round of cargo-supply contracts with the National Aeronautics and Space Administration, will likely delay its scheduled launch in April, Chief Executive Officer David Thompson said today on a conference call.
“I would hope it would not be more than a year,” he said. “We intend to as quickly as we can bounce back from this failure.”
The planned merger with the defense and aerospace business of Alliant Techsystems Inc. also was thrown into question today when ATK said it was reviewing the deal. Thompson said the transaction will continue “as far as I know.”
“There is no specific provision in the agreement for a launch failure,” he said. “That’s an infrequent but still not altogether unavoidable occurrence in our business.”
Orbital plunged 14.6 percent to $25.94 at 1:58 p.m. in New York after a slide of as much as 18 percent, the most in intraday trading since October 2006.
ATK declined 4.6 percent to $123.83. The Arlington, Virginia-based company said it “is conducting a thorough evaluation of any potential implications” from the Orbital accident. In April, ATK said it was splitting into an outdoor sports group and an aerospace-defense operator, which would combine with Orbital in a $5 billion stock transaction.
Yesterday’s blast leaves Elon Musk’s Space Exploration Technologies Corp. as the only U.S. cargo operator serving the ISS.
“SpaceX is going to have to pick up the slack,” said Marco Caceres, director of space studies at Fairfax, Virginia-based consultant Teal Group. Orbital won’t “be up and running in a few months.”
Yesterday’s incident comes about a month after NASA handed responsibility for manned spaceflight to private contractors for the first time. With NASA’s shuttle fleet retired, Boeing Co. and SpaceX won $6.8 billion in contracts to ferry astronauts to the station.
From the beginning, outsourcing was viewed as a way to make routine trips to low Earth orbit less expensive and to free up NASA to concentrate on deep-space missions. That approach also raised concern that ferry service still would be too risky for for-profit companies.
“Everybody in Washington wants to believe that entrepreneurs can deliver space launch services faster and at a lower price, but so far the jury is still out,” said Loren Thompson, an analyst with Lexington Institute, an Arlington, Virginia-based research group. “It’s the latest hint that the U.S. space complex is not healthy.”
The $200 million Antares rocket and Cygnus cargo logistics spacecraft were operating under a $1.9 billion NASA contract to provide routine cargo runs previously flown by the agency. Musk’s SpaceX became the first company to dock at the space station two years ago.
As NASA prepares to award a new round of cargo-supply contracts with bids due on Nov. 14, Orbital’s setback could open a window for competitors such as SpaceX or Boeing, said Brian Friel, a Bloomberg Intelligence analyst.
“The request for bids lists past performance as an evaluation factor,” Friel said. “This is obviously going to hurt that score.”
A Boeing spokeswoman, Kelly Kaplan, said the Chicago-based company would bid on the new cargo-flight work. John Taylor, a spokesman for Hawthorne, California-based SpaceX, said the company had no immediate comment on the Orbital incident. Calls to Sierra Nevada Corp., an unsuccessful competitor on the manned-flight award, weren’t returned.
The last failure for Dulles, Virginia-based Orbital occurred in March 2011, when a Taurus rocket malfunctioned while carrying a satellite.
The privately developed Antares is a medium-class launch vehicle that can loft spacecraft as heavy as 14,000 pounds (6,350 kilograms) into low-Earth orbit, Orbital said. The rocket had logged four successful missions before the accident and counted NASA and the U.S. Air Force among its customers.
The capsule carried 5,050 pounds of supplies for the station, according to Orbital’s website.
“A likely suspect” in the blast is the AJ-26 engine, a refurbished version of aging, Russian-built NK-33 models, according to Robert Stallard, an RBC Capital Markets analyst. GenCorp Inc.s Aerojet-Rocketdyne reworks the NK-33 units as an option to power the Antares, Stallard wrote in a note today.
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