Space Industry Exploration, NASA’s Budget Cuts and Their Impact on Investment

In the realm of U.S. federal space programs, the past week brought both the finalization of the spending bill for fiscal year 2024 and the unveiling of agencies’ requests for fiscal year 2025. NASA, in particular, faces sobering adjustments in its budgetary landscape.

A year ago, NASA aimed for budgets of $27.2 billion and $27.7 billion for 2024 and 2025, respectively. However, recent developments have seen over $2 billion trimmed from each year’s ambitions.

Congress settled on a final 2024 budget of $24.9 billion, while the 2025 request stands at $25.4 billion.

What does this mean for NASA’s initiatives? A glance at the changes from a year ago to now reveals significant reductions across several key areas. Three major Mission Directorates saw cuts ranging from $200 million to $400 million, while the Deep Space Exploration Systems, which includes the Artemis program, faces a $513 million decrease.

Additionally, the Science directorate experiences a nearly $900 million reduction from prior 2025 plans.

The Planetary Society highlighted the ramifications of these cuts, emphasizing the adverse impact on NASA’s scientific pursuits. They pointed out that the agency is forced to cancel, delay, or compete missions against each other for funding, potentially jeopardizing flagship missions within NASA’s science divisions.

Despite NASA’s historical economic return on investment and enduring popularity among taxpayers, its budget remains a fraction of the overall U.S. government spending, comprising less than 0.4%.

This reduction comes at a time when global interest and investment in space exploration are on the rise, putting constraints on an already modest agency budget.

On the military front, the Space Force’s budget faces some challenges as well. While it isn’t as dire as NASA’s situation, Air Force Secretary Frank Kendall has given the 2025 request a lukewarm reception.

The Space Force is seeking $29.4 billion for 2025, a decrease from the $30 billion requested for 2024. Nevertheless, significant allocations are still planned for key programs like NSSL and PWSA, with $1.8 billion earmarked for NSSL and $1.7 billion for PWSA development in 2025.

 NASA's Budget Cuts and Their Impact on Investment
Astra opts for privatization; co-founders acquire outstanding stock at 50 cents per share.

Overall, the federal budget’s allocations for space seem disconnected from the domain’s importance and the escalating global ambitions in space exploration.

Whether in civil or military spheres, governments increasingly prioritize space worldwide. However, the latest funding plans of the most influential spacefaring nation do not fully reflect this growing significance.

A Recap of Space Industry Highlights

SpaceX’s Starship achieves its longest spaceflight yet in a third test of the full prototype system. Departing from the company’s facility in Texas, the rocket disintegrated above the Indian Ocean before its anticipated splashdown.

Both SpaceX and NASA leadership laud the Starship flight as a triumph, citing multiple new milestones reached during its orbital velocity journey.

Starlink’s customer base surpasses 2.6 million, as disclosed by SpaceX in a blog post addressing enhancements in service latency. SpaceX claims to have reduced latency by approximately 30% through performance upgrades.

NASA returns Crew-7 from the International Space Station after six months, with the spacecraft splashing down successfully. A recent review of the Pentagon’s UFO report concludes that there’s no evidence of extraterrestrial involvement in unexplained events.

The FCC approves satellite direct-to-device rules, enabling companies to utilize terrestrial partners for coverage beyond cell towers.

SpaceX secures rights to use E-band spectrum, receiving conditional FCC approval for expanded frequency use of its Starlink satellites. This move is aimed at enhancing network capacity with the company’s second-generation satellites.

Rocket Lab launches its third Electron mission of the year, deploying Synspective’s StriX-3 satellite into orbit.

In its inaugural launch attempt, Japanese company Space One’s rocket explodes, moments after liftoff. The solid-fueled Kairos vehicle was intended to be the first Japanese rocket to deliver a satellite into orbit.

Ursa Major’s Hadley engine powers the first hypersonic Stratolaunch test flight, which the companies declare a success over the Pacific Ocean. The flight reached speeds nearing Mach 5.

SpaceX maintains its dominance in the launch market in Q4, delivering 382 metric tons of spacecraft to orbit, with China trailing behind.

Lunar mining startup Interlune secures $15 million in funding led by Seven Seven Six, with participation from Aurelia Foundry Fund, Gaingels, Liquid 2 Ventures, and Shasta Ventures. The company, headed by former Blue Origin executives Rob Meyerson and Gary Lai, is developing technology to extract resources such as Helium-3 from the moon’s surface.

SAIC receives a $444 million Space Force contract to modernize “launch range instrumentation” at Space Force sites in Florida and California over five years.

NASA's Budget Cuts and Their Impact on Investment
Redwire’s 2023 revenue surges 52%, reaching $244 million, with a $373 million contract backlog. (Credits: Jacksonville Daily Record)

BlackSky is awarded a $3.5 million AFRL contract to develop and demonstrate moving target engagement services. The Air Force Research Laboratory deal has a total potential award value of $24 million.

Redwire’s 2023 revenue surges 52%, reaching $244 million, with a $373 million contract backlog. (Credits: Jacksonville Daily Record) Redwire secures a second mission with Eli Lilly and plans to fly the next PIL-BOX to space on an upcoming cargo mission to the International Space Station. The company aims to expand its understanding of crystal formulations’ impact on drug discovery and development.

Redwire reports a significant surge in revenue for 2023, totaling $244 million, marking a 52% increase from the previous year, according to the company’s Q4 report.

EchoStar adds Egypt’s Nilesat as a satellite ground system customer, purchasing a Hughes JUPITER gateway and terminals for use with its Nilesat 302 satellite. The project is scheduled for completion by the third quarter.

Quarterly revenue climbed to $63.5 million, reflecting an 18% year-over-year growth, while the net loss narrowed to $8.2 million, a 68% improvement over the same period.

Redwire anticipates slower revenue growth in 2024, forecasting $300 million, a 23% year-over-year increase, but boasts a substantial $373 million contract backlog by year-end.

Terran Orbital responds to Lockheed Martin’s takeover bid, with CEO Marc Bell stating that the company is still assessing its options regarding its future.

Astra announces plans to go private to avoid bankruptcy, with co-founders Chris Kemp and Adam London reaching an agreement with the company’s board to acquire all outstanding common stock at 50 cents a share.

 NASA's Budget Cuts and Their Impact on Investment
Terran Orbital evaluates Lockheed Martin takeover bid, CEO Marc Bell exploring options. (Credits: CNBC News)

Comtech removes Ken Peterman as CEO and president, citing conduct unrelated to business strategy, financial results, or previously filed financial statements. John Ratigan, the company’s chief corporate development officer, steps in as interim CEO.

Rick Bergman is appointed president and CEO of Kymeta, following the announcement of co-CEOs Walter Berger and Doug Hutcheson’s retirement at the end of March. Bergman, formerly executive vice president for computing and graphics at AMD, takes the helm, while board member Nicole Piasecki assumes the role of Kymeta’s new chairman.

On the horizon:

  • March 15: SpaceX Falcon 9 launches Starlink satellites from Florida.
  •  March 18: The SATELLITE 2024 conference commences in D.C.
  • March 18: SpaceX Falcon 9 launches Starlink satellites from California.
  • March 20: Rocket Lab Electron embarks on the NROL-123 mission from Virginia.
Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x