Russia's Space Industry Faces Steep Decline Amid War Impact

Written by Henrik Rothen

Mar.04 - 2024 12:03 PM CET

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Photo: testing / Shutterstock.com
Photo: testing / Shutterstock.com
Russia's Space Industry Faces Steep Decline Amid War Impact.

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The conflict initiated by Vladimir Putin in Ukraine has significantly impacted Russia's space sector, leading to a drastic reduction in commercial satellite launch orders.

According to American astrophysicist Jonathan McDowell's calculations, the demand for Russian satellite launches from European and other international clients has plummeted by 90% over the last two years.

Sharp Drop in Satellite Launch Contracts

Historically, European countries frequently utilized Russian rockets for their satellite launches, awarding 35 contracts for such services in 2021.

However, the invasion of Ukraine has led to a stark decline, with only two contracts awarded in Russia in the following year and a slight increase to three contracts in 2023.

Global Shift in Space Superpowers

This downturn positions the United States as the remaining space superpower, witnessing a more than threefold increase in commercial launch contracts, surpassing 320 during the same timeframe. Meanwhile, smaller spacefaring nations such as India and China are expanding their market share at Russia's expense, as reported by Nikkei Asia.

Additionally, Europe is making strides in space infrastructure, with Sweden unveiling its first spaceport, set for its inaugural launch in 2025.

Roscosmos's Financial Woes

Even before the onset of the war, Roscosmos, Russia's state space corporation, was experiencing financial difficulties under the leadership of Dmitry Rogozin.

Rogozin's remarks in 2014 about Americans using a trampoline to reach the ISS underscored the strained relationship with the US, which eventually regained its independent crewed spaceflight capability with SpaceX's Crew Dragon in 2020.

From 2018 to 2021, Roscosmos's revenue dropped threefold, from 32.3 billion rubles ($356 million) to 10.5 billion rubles($115 million), with losses reaching 31 billion rubles ($339 million) in 2021.

The situation has continued to decline, with CEO Yuri Borisov indicating to Vedomosti at the end of 2022 that the corporation expected a loss of about 50 billion rubles in the first year of the war.

Future of the Global Space Market

Despite Russia's setbacks, the global space business market, excluding manned flights, is projected to grow from $12.2 billion in 2023 to $15.8 billion by 2032, according to Euroconsult.

This growth underscores the shifting dynamics in the space industry, with new players emerging and established ones adapting to the changing geopolitical landscape.

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