Interfax Ukraine news agency reported that S7 Sea Launch Ltd. has placed an order with Yuzhmash for 12 Zenit launch vehicles. The announcement is the first major contract following the purchase of Sea Launch by S7 Group in September 2016. The new rockets would serve to restart operations at the company, which has not conducted a successful launch since 2014. The deal also offers the potential to restart manufacturing operations at Zenit prime contractor Yuzhmash, which is on the verge of collapse.

However, the factors that have hurt Sea Launch and Yuzhmash since 2014 are still in effect. Despite the announcement of the contract award, S7 will need to overcome these problems before restarting operations.

Zenit production has suffered from the same production problems that have plagued the rest of Russia’s once vaunted launch industry. A problem producing enough components forced Russia to favor the Proton over the Zenit at one point. Even when components could be made available, they suffered from reliability issues that caused a launch failure in 2013, just as Sea Launch was again ramping up operations following its exit from bankruptcy.

The conflict between Russia and Ukraine have exacerbated these production issues. The Zenit is produced in Ukraine, the upper stage is produced in Russia. In response to the conflict, Russia has decided to reduce reliance on foreign-built rockets, including ending all use of the Zenit. Without Russian cooperation on the program, Zenit production ended, and Ukraine’s space industry is in shambles.

Sea Launch’s home port for its Odyssey platform has also proved problematic. When relations between Russia and the U.S. were relatively warm in the 1990s and 2000s, the Odyssey operated from Long Beach, Calif. Now that relations have soured, operating from the U.S. is unlikely. For a time, Brazil was seen as a candidate for a home port location. However, negotiations fell through, and Sea Launch is back to searching for a home port.

While Sea Launch has dealt with these issues, the market has not stayed still. Competition for launch contracts has become much more intense over the past few years. Established players, like Arianespace, are improving their competitiveness by introducing more efficient production schemes and lower cost launch vehicles. New entrants, like SpaceX, have entered the market with innovative new designs. Even state-owned operators in China and India have become more competitive in recent years.

The announcement of a new production contract adds some certainty to S7’s plan to revitalize Sea Launch. However, there are still many issues that need to be overcome before operations can restart.

Image Source: Sea Launch