The COVID-19 pandemic’s impact on the space industry has led to delay in launches, manufacturing being halted, and some companies filing for bankruptcy. In Europe, politicians warn that due to a decline in private sector investment, the impact of the pandemic on the space industry economically could be up to €1 billion. In Africa, the effect is mixed.
Conferences and meetings such as the 16th International Conference on Space Operations (SpaceOps), the inaugural conference of the African Astronomical Society for 2020 (AfAS2020), the first International Academy of Astronautics (IAA) symposium on small satellites are either cancelled or postponed.
Space in Africa surveyed to see how much influence the pandemic is having on government-driven space agencies, as well as commercial space companies.
GOVERNMENT SPACE AGENCY
The supply chain is suffering due to travel restrictions. Some agencies have managed to keep up with production and manufacturing (either inhouse or through third-party institutions) by alternating staff, while others have paused production and manufacturing. Government allocation has decreased due to the uncertainties most countries are facing. As more countries experience an economic decline due to the shutdown, there is a direct effect on government allocations to most space agencies.
Globally, space technologies have been used to mitigate the effect of the pandemic, with Africa not taking a backseat. There is an increase in demand for products and services offered by these institutions as some institutions found new use cases for existing products and services while pivoting to Covid-19 related offerings. For example, the Nigerian Space Agency launched a TeleMedicine facility in April to support Covid-19 testing in Nigeria. The South African Radio Astronomy Observatory (SARAO) was also mandated to manage the national effort required for the local design, development, production and procurement of respiratory ventilators to support the Government’s response to combat the pandemic.
General operations of most space agencies are still in progress. Partnership agreements are being signed, new personnel are being appointed, countries are still making substantial space investments and new national space agencies are being created. “Due to the lockdown, most operations decreased and in some cases stopped. The partial opening of the economy still impacts the flow of work in the office, with few people doing the work of many, thus leading to the stress of staff“. – Dr Francis Chizea, DG of NASRDA.
“By responding early in preempting the lockdown, initiating a business continuity plan and associated contingency plans; our workforce was able to work from home, equipped with the relevant tools to be able to do so. We have kept a skeletal staff on-site to ensure continued operations; all other staff were requested to work remotely. Hence, the pandemic has imposed a different way of working. Still, by managing this transition, we have been able to limit the impact significantly” – Dr Val Munsami, CEO, SANSA.
With about 8,500 jobs in the industry, there are minute cases of job loss due to the ongoing pandemic.
COMMERCIAL SPACE SEGMENT
It has been a tough period for private companies in the industry. Challenges with investment, reduction in sales and manufacturing delay has led companies like OneWeb and Sky & Space Global to file for bankruptcy. In contrast, companies like Airbus, Raytheon, Boeing, etc have either let go of some employees or furlough them.
The case is almost similar in Africa; however, the only company that has had to shut down is Aerial & Maritime. GomSpace and Aerial & Maritime (A&M) in June 2020 agreed on a settlement and release of any potential claims and commitments of each party in connection with their original agreement from 2016. As a result of the settlement, the parties started the process of solvent liquidation of A&M.
For the majority of the companies, revenue remains relatively stable while few experienced growths in the market. For example, NewSpace Systems saw demand for their products and services increased, which has led to an increase in revenue.
“Other than having to stop production for four weeks during the lockdown, we see the market as very buoyant. We have increased sales and personnel as well as seeing huge growth in requests for quotes/proposals. One ongoing issue is that the Government has not fully reopened, so issues like customs and gaining export licences are still a challenge for us“. – James Barrington-Brown, CEO of NewSpace Systems.
“From the overall assessment of business trends during this pandemic, it appears as such that COVID-19 is a blessing in disguise for Space, Earth Observation, Geomatics and Technology industries. Generally speaking, the pandemic has impacted positively the growth of this industry. This is largely attributed to the fact that most organisations and agencies have been forced to explore the full potential and utilization of technology. Now, more than ever, it is increasingly becoming a necessity for countries to consider investments in Space. The increase in demand for our services and products is also being elevated through the adaption of institutions to remote working environments to support remote monitoring and mapping thereby limiting physical human interactions that were previously the norm” – Vivianne Meta, Geospatial Lead at LocateIT.
The situation is similar to satellite broadband companies. “Generally, satellite bandwidth business is relatively stable as most of the services rendered during the pandemic are in support of the government efforts towards sensitisation of the masses. We also introduced a downward new price regime to support other businesses that utilised satellite capacity” – Dr Abimbola Alale, CEO of NigComSat.
The economic impact of the pandemic has, however, affected some contracts/deals, causing a ripple effect on the revenue for some companies. “We were negotiating for a rather big contract just before Covid-19. This contract was an opportunity to expand our product range, however, due to Covid-19 it was postponed or even cancelled” – Johann de Swardt, CEO of Etse Electronics.
The supply chain was generally affected due to travel restrictions; this also has caused projects that require physical presence to be put on hold. Know-how businesses such as SCS Space have continued without interruptions, companies like Astrofica and EurekaGeo have had to modify their business implementation models and companies like XinaBox have experienced a reduction in funding leading to permanently laying off some employees (especially outreach facilitators).
“The use of spatial data for addressing some of the issues raised by the pandemic (like rural communications) should further push Africa towards space-based solutions, rather than copying previous generation methods still being used in 1st world countries” – Mr Barrington-Brown.
Governments must step in and support the commercial space industry through tax waivers and consolidated funding by the National Governments and the African Union Commission. “This industry is the future; it has to have continuous funding and support. COVID-19 proves more of the need to use satellites to connect rural areas in Africa” said John Enoh, CEO of BeepTool Communications. Ana-Mia Louw, MD of Simera Sense emphasised that “funding and tax waivers would assist with progress through the fallout from the pandemic“.
Some countries in Africa are already thinking and working in this direction. In June, the South African Government announced plans to invest R3.1 billion (approx. USD 179 million) in a new space infrastructure hub as part of an ambitious post-pandemic government spending. The South African Government identifies the Space Infrastructure Hub project as one of the top five priority “catalytic projects” with high multiplier effects.
According to Dr Munsami, “the pandemic has demonstrated several challenges and opportunities relating to the space industry, and these include, among others:
- The value proposition of space applications was adequately demonstrated in providing a spatial extent and evolution of the virus at a national level, which was made possible through the use of satellite imagery and layering this with appropriate vector fields (disease counts, fatalities, recoveries etc.)
- Human settlement maps were used in informing:
- the deployment of medical personal for testing purposes
- the distribution of food parcels for the needy, and
- the supply chain requirements of informal shops and traders.
- Communications planning for HF communications of emergency personnel (policies, defence force, etc.) during the pandemic.
These examples demonstrate the benefit of space applications during the pandemic. Therefore, increased investment in this sector will help to deal with future pandemics. Also, collaboration among institutions was an important factor in responding to the pandemic promptly. Not only are these required for future preparedness, but also for ensuring longer-term socio-economic developments of our populations”.
EO/Remote sensing companies are generally fairing well, as well as SatCom companies, while there is a mixed result from satellite component manufacturing firms. As countries begin to lift the lockdown, it is expected that businesses will go back to normal with little impact on the industry over the next couple of months.