Like just about every industry these days, novel coronavirus is affecting the space market. At Firefly Aerospace, this means the test of their new rocket — called Alpha — has been pushed back again a few months to Q3 2020 due to delays getting components from suppliers.
But the greater story here is how Firefly continues to persist. This morning (April 22) the Texas-based firm announced a launch services agreement with Spaceflight Inc. Spaceflight will recruit small companies for satellites to take up excess capacity on several Firefly rockets, which will let rockets launch more efficiently since they aren’t burning fuel to get only a payload or two in space. Spaceflight also plans to take up most of the mass on a rocket Firefly will launch in 2021. The value of the contract was not disclosed.
“I think the fact that we’re still forming big contracts like this is a really good sign that the market still appears to be healthy,” said Firefly CEO Tom Markusic in an interview. “I haven’t heard anything negative from the customers we have in our existing manifest; that’s one thing I would convey.”
Markusic says Firefly foresees a temporary business contraction on the launch side, due to the aforementioned supplier delays, but customers will continue to sign for future flights. He added that the company’s investor is “committed to seeing this through” as opposed to looking for an immediate return, especially in the middle of a pandemic.
As of this week, there are roughly 300 employees in Firefly, and more hires are coming quickly on the production side, to prepare for the first flight. “The secret to success in this business is staying focused,” Markusic said of Firefly’s efforts to send its first rocket aloft, which has experienced a few delays along the way. (But as any space company will point out, hardware development is difficult and costly, especially when novel technology is involved.)
There have been challenges in developing the Alpha rocket, whose novel features include propellant tanks and structures are built with carbon fiber composites, to reduce cracks and leaks while storing supercooled liquid oxygen. Estimates for the first launch date have been pushed back a few times, and a fire broke out during testing of a rocket stage in January.
But the payoff should be worth it in the long run, chief revenue officer Brad Schneider said during the same interview. Firefly projects that once the rocket starts flying, the company should see a “ramp” in revenues as money flows in from paying customers. Providing the test launch in 2020 goes to plan, revenues should start flowing faster in 2021 and accelerate in 2022, getting to a break even point relatively quickly after the upfront $165 million cost in development, preparing for the first flight and building the first two vehicles.
The company is a rebirth from an earlier entity, Firefly Space Systems, which filed for bankruptcy protection a few years ago after Brexit forced a major European investor to withdraw funding. Firefly Aerospace has attracted strong results since 2019, including a $52 million expansion last year (including a launch site at Cape Canaveral Spaceport in Florida).
In the coming months, Firefly anticipates tests of the first stage and second stage that will continue to proceed even amid the pandemic, because the company has been able to adjust its workforce to keep up social distancing needs. Employees now work in two separate shifts to preserve space around everybody, for example, and Firefly has seen no positive tests yet for novel coronavirus.
“Maybe we’re lucky, but we’ll take that. So far, so good,” Markusic said.