There was a problem six months ago. It has a solution today.
Both an international humanitarian crisis and a crisis for the space program were caused by the Russian tanks rolling into Ukraine. A new medium-class launch vehicle called the "Antares" rocket was developed by the company over the past decade, which it has used to perform its share of a $14 billion, multi-party, multi-year NASA contract.
The problem is that the main rocket engines are made in Russia and the core stage is made in Ukranian The hundreds of millions of dollars the company was supposed to collect for its work on the Commercial Resupply Services-2 contract has been jeopardized because of the sanctions against Russia and the war in Ukraine.
Northrop Grumman Corporation What are the solutions? I suggested back in June that a new rocket engine in-house or a switch to an American supplier would fix the problem.
At least I was close to the truth.
Aerojet isn't going to be the source of the rocket engines that Northrop has chosen. Instead, the company is going to Texas to find a solution to its Russian engines problem. Together with Firefly, they will first develop a fully domestic version of our Antares rocket and then design and build an entirely new medium class launch vehicle.
The first project of the company will use seven new Firefly "Miranda" engines instead of the two Russian engines used in the previous project. Firefly is designing a new engine that will power its upcoming rocket. The "Alpha" rocket uses a first stage engine called "Reaver".
The rocket's core and fuel tanks will be built using Firefly-designed materials. The companies say that the new Antares 330 will increase the rocket's payload to be as high as the current Antares 230.
The first A330 rocket is expected to be launched in the late 20th century. It's going to need an interim solution because it's going to need to fulfill contracts between now and then.
According to the company, there are two Antares rockets built and ready to launch in the coming months. The company's NASA contract calls for them to supply the space station six times. To bridge the gap between now and then, Northrop says it has hired rival space company SpaceX, which has an International Space Station resupply contract of its own.
If everything goes according to plan, the Antares 330 should be ready to fly by then.
All of the above is positive news for the company and its stockholders. On the other hand, the company will probably take a hit on profit margins at its Space Systems division, which is currently generating 10.6% margins according to S&P Global Market Intelligence.
Signing up for the company means that it won't have to give up the billions of dollars of revenue it gets from the NASA contract. A big Russian risk has been part of the business model from the beginning. As a bonus, it will give Northrop's rockets greater capacity because of the secure supply chain.
One caveat, though, does deserve mention: Firefly's Alpha rocket has only flown once, and that flight ended in failure when an anomaly occurred in the first stage of flight. The second attempt will not use the new Miranda engines that are part of the partnership with Firefly.
There is a lot riding on this project. The hope is that it will work out.
All Rights Reserved © 2024
