By some measures, 2023 was the worst year ever for United Launch Alliance.
Formed from the merger of Boeing's (NYSE: BA) and Lockheed Martin's (NYSE: LMT) competing rocket businesses at the end of 2006, United Launch Alliance (ULA) quickly moved to dominate the business of space launch in the United States, launching a record 16 launches in 2009. But just one year later, SpaceX arrived on the scene with its transformative Falcon 9 rocket.
By 2015, Falcon 9 was competing with ULA for lucrative U.S. national security missions, and when Falcon 9 version became reusable, lowering its cost per launch, SpaceX quickly stole ULA's role as America's premier rocket launcher. Worse, with ULA in the process of phasing out both its Atlas V and Delta IV rockets in favor of a replacement rocket called "Vulcan," ULA's launch cadence was destined to fall even further.
Fast-forward to 2023, and Boeing's joint venture with Lockheed launched just three times.
2024: A better year for ULA
It's hard to keep a good rocket company down, however, and by 2024, ULA was already laying the foundations for its comeback. Four years overdue, delayed by problems at Blue Origin getting the engine ready, by its own development issues, and by COVID, ULA's Vulcan Centaur rocket finally made its first launch in early 2024. It took several months to get ready for its second launch, which happened in October, and was supposed to qualify the rocket to run national security missions like Falcon 9, and like Atlas V and Delta IV before it.
But there was a problem.
Although the Vulcan rocket per se launched successfully, and delivered its payload to orbit, one of the solid rocket boosters attached to the Vulcan rocket experienced an anomaly, when its booster nozzle fell off midair. And admittedly, the company that built this booster wasn't named Boeing or Lockheed. It was actually Northrop Grumman(NYSE: NOC). Still, the Northrop booster is an important part of the whole Vulcan launch system, and it didn't work as planned.
As I noted in October, the Federal Aviation Administration didn't seem too upset by the anomaly, commenting that "no investigation is warranted at this time." But to many other space watchers, rocket parts falling off a Boeing rocket midflight raised some troubling associations with other Boeing mishaps from recent memory.
Yes, I'm talking about the door plug that popped off the Boeing airplane.
And it seems the FAA may be having second thoughts. Two months after Vulcan's second launch, the FAA still hasn't officially approved Vulcan for another flight. Nor has the Air Force certified Vulcan to fly national security missions.
2025: The year Boeing turns the corner?
But that might happen soon.
Interviewing ULA CEO Tory Bruno earlier this month, Breaking Defense was able to determine that ULA is expecting official certification for Vulcan "this month, next month, [or in the] next few months." Crucially, Bruno noted that the FAA won't require ULA to conduct additional testing, or fly additional test flights of Vulcan, before awarding certification, suggesting that in the CEO's view at least, certification is basically in the bag.
And not a moment too soon.
In 2025, Boeing is counting on being permitted to launch two U.S. national security missions on Vulcan -- but it needs certification before it can do that. In total, ULA expects to launch 20 times this coming year, beating ULA's previous record for most launches in a year.
Image source: Getty Images.
What's next for Boeing's space joint venture?
Production capacity won't stop ULA from hitting this pace, either. ULA has 16 Vulcan rockets in inventory, says Bruno, and Blue Origin is building engines fast enough to sustain a launch cadence of 26 Vulcan launches per year.
ULA's targeting 20 to 30 launches annually, and it expects about half of those launches to be for the government, and the other half commercial. Bruno notes this is a "healthier" ratio than when he joined ULA in 2014, when he says "less than a quarter" of ULA's launches were commercial. It could set up ULA to be unstoppable, even with competition from SpaceX.
Is 50% a realistic number, though? I checked. In 2013, exactly 0% of ULA's launches were commercial. In 2014, only one out of 14 launches -- 7% -- was commercial, which suggests Bruno's 50% commercial goal may be a bit aspirational.
That being said, the company does have a deal to launch 47 rockets for Amazon.com(NASDAQ: AMZN), putting Kuiper internet satellites in orbit. That contract alone would account for three to four years' worth of Bruno's 50%-of-30-per-year commercial launch goal.
It should guarantee ULA at least three good years, once the military certification comes through. Whether ULA can maintain that pace after the Amazon contract ends remains to be seen. Not all companies face as much time pressure as Amazon does, with a mid-2026 deadline for launching half its satellites imposed by the FCC, lest it face the risk of losing its license. Not all companies will pay more for Vulcan launches when SpaceX's Falcon 9 costs less.
But the Amazon business should last long enough to get ULA off to a good start, at least.
And 2025 is when it will all start.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
