At approximately 9:07 am 9/1, an explosion occurred at [launch complex] 40 at [Cape Canaveral Air Force Station]. Initial reports indicated no causalities and no threat to public safety. -- U.S. 45th Space Wing
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SpaceX can confirm that in preparation for today's standard pre-launch static fire test, there was an anomaly on the pad resulting in the loss of the vehicle and its payload. Per standard procedure, the pad was clear and there were no injuries. -- SpaceX
Image source: U.S. 45th Space Wing.
It's been more than a year since SpaceX last lost a rocket due to an "anomaly." In those 12 months SpaceX launched nine rockets successfully -- and landed six of them safely back on Earth.
But now, that success streak has ended.
Early Thursday morning, a SpaceX Falcon 9 rocket was test-firing its nine Merlin main engines in preparation for a scheduled Saturday launch of an Israeli Aerospace Industries Amos-6 satellite. For reasons yet to be explained, the rocket exploded during testing, destroying the rocket and the satellite it was supposed to lift into orbit this morning.
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What it means for SpaceX
SpaceX maintains insurance for its rocket launches, so the immediate financial hit to the company probably isn't as big as you might think. More important for SpaceX is what Thursday's explosion means for the track record of success it has built up over the past year -- and what it means for the company's prospects going forward.
According to the company's website, SpaceX currently has reservations for "over 70 launches on its manifest, representing over $10 billion in contracts." The company's second total loss of a rocket could cause some of those customers to rethink giving their business to SpaceX, however, and hurt the company's future revenue stream.
Even more important is the effect that Thursday's disaster could have on SpaceX's planned manned space program. As recently as last month, we were writing about how SpaceX seemed to have taken the lead over rival Boeing (NYSE: BA) in the race to send astronauts to the International Space Station via NASA's Commercial Crew Transportation Capability contract. While both companies had received orders from NASA to perform two manned launch missions to ISS, delays in Boeing, tied to safety concerns about its mission, seemed to put SpaceX on a track to be ready to launch to ISS first.
Now it's looking like Boeing was the more prudent company in delaying its launch, while there may be concerns that SpaceX was pushing too far, too fast.
The upshot for investors
Fears of Boeing's demise as a space giant may be exaggerated. It's true that the company, and its United Launch Alliance partner Lockheed Martin (NYSE: LMT), charges exorbitantly more for its space launches than SpaceX does. Then again, working together, Lockheed Martin and Boeing have built up a record of 110 straight successful launches, which was already 12 times as long as SpaceX's record before Thursday's disaster.
Despite the cost, there's something to be said for safety. And there's still an argument to be made for NASA keeping Boeing and Lockheed around.
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