Spaceports Represent Latest NewSpace Building Boom
Build it and they will come. This paraphrased prediction – famously uttered from a cinematic cornfield, a place notorious for where creepy killer kids tend to congregate – has both metaphorical and literal connotations. One could apply the maxim in everything from ballfields to a Dwarf Empire theme park in Kunming, China. In our case, we’re interested in the sudden boom in commercial spaceports, which cities and local governments are banking on will attract investment and economic growth. Spaceports are also symbolic of the fledgling industry’s greater ambitions to morph into a trillion-dollar industry. Spaceports are like airports, except they cater more to spaceships and aliens, rather than as another place for a Starbucks location.
The rapid commercialization of space, which has given rise to the term NewSpace, has attracted more than $18.4 billion in investments between 2000 and 2017, according to Bryce Space and Technology, an analytic consulting firm for the space industry. More than half of that investment has been since 2012. That has led to a boom of new startups serving sectors as diverse as tourism, research, space mining, and rocket engine R&D. However, the sector expected to drive most of the growth of the NewSpace industry, valued around $345 billion today, is the launch of small satellites into low earth orbit. More than 1,000 smallsats were launched between 2012 and 2017, Bryce reported, and thousands of more satellites are expected to be put into orbit in the coming years after the federal government gave the green light to SpaceX and others to launch vast constellations for global internet and other communications purposes.
Commercial spaceports are part of that growing NewSpace commercial ecosystem. That was especially apparent at the SpaceCom 2018 Expo in Houston last month, which we were invited to attend. You could be forgiven for assuming that most of the rockets launched today are from government facilities at Cape Canaveral in Florida, where magical genies with a thing for men in uniform live in nearby Cocoa Beach. In fact, less than a third of the 90 orbital launches that took place last year even originated in the United States, as you can see in the graphic below:
So, you might also find it interesting to learn that in the United States alone, the Federal Aviation Administration (FAA) has 11 licensed commercial spaceports. Many of them were in attendance at the SpaceCom Expo, handing out shiny brochures in hopes of attracting business. States like Houston and Florida – where NASA has a heavy presence – were well represented. For example, the Cecil Airport in Jacksonville, Florida, has invested $170 million in infrastructure and facilities for its FAA-approved horizontal commercial spaceport. Meanwhile, the Houston Spaceport, located at Ellington Airport, just got nearly $19 million from the city for phase one of development. About 90 acres of land has been set aside for the spaceport, which would be used to launch “micro satellites, astronaut training, zero gravity experimentation, spacecraft manufacturing and other potential activities, including space tourism.”
Colorado is the latest state to join the list, converting the unimaginatively named Front Range Airport into the Colorado Air and Space Port earlier this year. The facility’s tagline is: “The first mile is free,” referring to its mile-high location. Here’s the full list of current U.S. commercial spaceports:
- California Spaceport, CA
- Mid-Atlantic Regional Spaceport, VA
- Pacific Spaceport Complex, AK
- Florida Spaceport, FL
- Mojave Air and Spaceport, CA
- Oklahoma Air and Spaceport, OK
- Spaceport America, NM
- Cecil Field Spaceport, FL
- Midland International Air and Space Port, TX
- Houston Spaceport, TX
- Colorado Air and Space Port, CO
More Spaceports Planned
Yet a 12th spaceport is being proposed on an industrial site around a swampy area in Camden County, Georgia, which had been a rocket-testing facility back in the 1960s. Local officials there are reportedly dreaming of a spaceport that could support up to 12 vertical launches (there are different FAA licenses for vertical versus horizontal capabilities). So far, the government has spent a reported $4 million on engineering and consulting costs. Even Hawaii is thinking about getting into the spaceport business.
But it’s not just the United States that is dreaming of spaceports.
Virgin Orbit is working with Cornwall, UK, on a spaceport that could support the company’s commercial satellite business by 2020. Not to be outdone, the Scottish are proposing a spaceport in Glasgow for satellite launches and space tourism flights. Elsewhere in Europe, there is push to develop a spaceport in the Azores, an island chain off the coast of Portugal, as well in Sweden, about 60 miles north of the Arctic Circle.
Other countries vying for a piece of the NewSpace pie with a spaceport include Japan, Singapore, India, Georgia, Australia, Brazil, and the United Arab Emirates, which will no doubt make its spaceport look like something out of Duck Dodgers in the 24 1/2th century.
Why Do We Need Spaceports?
We aren’t the first to point out that spaceports are currently about as busy as a Sears outlet on Black Friday. As we noted earlier, only about a third of all launches took place in the United States last year. Since 2015, two-thirds of the 58 commercial U.S. launches licensed by the FAA originated in Florida. It begs the question: Do we really need all of these spaceports? The answer is not today but maybe in the not-so-distant future.
George Whitesides, CEO of Virgin Galactic, said at the SpaceCom Expo in his keynote address that a network of spaceports around the world will provide more countries with access to space. Such a network is also building the foundation for super fast terrestrial travel, with infrastructure to support intercontinental travel that could get you from New York to Tokyo in less than an hour. Some of the designs for spaceplanes of the future are being developed with an eye toward serving the terrestrial air market.
Government Support for Spaceports
Money and jobs are also on the minds of many governments backing spaceport ventures. For instance, the Camden County project is projected to support more than 100 jobs and add $22 million to the regional economy annually. The blokes in Cornwall believe they can immediately add 150 jobs and more than $200 million to the local economy. You’re probably getting the idea. The FAA reports that traditional aviation accounts for more than 5% of the U.S. gross domestic product, contributes $1.6 trillion in total economic activity, and supports nearly 11 million jobs.
Many of the spaceports, as we’ve noted, are public-private partnerships, with governments willing to invest in infrastructure or even donate land required to support the facilities. The federal government is obviously also a booster of the industry, particularly NASA. The shadowy Defense agency known as DARPA is even hosting a launch competition with more than $30 million on the table for companies that can perform two launches from two separate sites within a few weeks. Several commercial spaceports are included on the short list of acceptable launch sites for the competition. The idea is to promote different launch systems.
The FAA’s Office of Commercial Space Transportation, or AST, is also reaping the rewards of NewSpace to support the growing bureaucracy required to regulate the industry. Congress just authorized a five-year budget that will see the agency’s budget jump from $22.6 million to nearly $76 million by 2023. Space News reported that another provision in the budget authorization will establish an Office of Spaceports within AST to regulate and promote more
secret UFO bases spaceports around the country.
Space may be the final frontier, but Earth will remain home base until we can colonize
and ruin another habitable planet. That means we need the infrastructure to support multiple launch facilities around the world, as we build out networks of satellites, space stations, 3D space factories, and other facilities between the Earth and the moon. Spaceports will be part of that foundational infrastructure, spurring economic growth and creating jobs that robots can take from us in the future. Besides, we’re running out of street corners for Starbucks stores.
Tech stocks are volatile investments during the best of times. Here at Nanalyze, we complement our tech holdings with a dividend growth strategy that performs extremely well during recessions. Find out which 30 dividend growth stocks we're holding in our report - Quantigence - A Dividend Growth Investing Strategy - freely available to Nanalyze Premium Subscribers.