How Accurate are FAA Commercial Launch Forecasts?

The FAA provides commercial launch forecast information as part of their annual fiscal year plan. These launch forecasts are important because they help provide information to inform legislators in their authorization, appropriation, and oversight responsibilities related to the commercial space industry. Accurate commercial launch forecasting is integral to the success of planning for future businesses, expanding and maintaining support infrastructure, and in policy formulation.

So, how accurate are FAA forecasts?

FAA Launch Forecasts from 1995 to 2017

Some insight into accuracy and forecasting challenges are identified in a 2017 report that examined the accuracy of the FAA commercial space transportation forecasts from 1995 to 2017.

Source: Past and Future: An Analysis of the FAA Commercial Space Transportation Forecasts 2017

The primary finding of the report is that the FAA commercial transportation forecasts from 1995 to 2016 were consistently over-optimistic in their annual commercial launch predictions.

Overly Optimistic Forecasts and Their Impact

The FAA forecasts are used in multiple ways, such as in hearing testimony for Congress, private sector planning, or in private investors investments decisions.

Some consequences of overly optimistic forecasts include:

inappropriate government policies,
wasted government investments in support infrastructure such as spaceports,
private companies chasing after a market that does not exist and failing, and
public investors suffering losses as a result of investing in new space companies with the expectation of a large and fast growing market.

Sources of Error in FAA Forecasts

The report found that sources of error were difficult to identify due to a lack of transparency in the data and methodology of the forecasts. Also, although the FAA forecasts identified some of the main variables considered by its predictions, the forecasts did not explain how those variables were measured or weighted in their analysis. The main variables identified by the FAA were:

satellite technical issues,
launch vehicle technical issues,
weather,
range availability issues,
dual manifesting,
business issues,
regulatory issues, and
geopolitical issues.

Since the FAA forecasts relied on self-reporting of launch information from commercial companies, the report suggested that there may have been an incentive for them to over-report their future launch figures. In addition to industry, the FAA may also have had an incentive for the forecasts to be optimistic in its assessments of the commercial launch industry as it has a mission to encourage, facilitate, and promote the industry. High forecast predictions showing a healthy commercial launch industry indicate that the FAA is fulfilling its mission statement. The combination of self-reporting bias from industry as well as the overarching goals of the FAA likely encourages optimism in the formulation of the forecasts.

The report also found multiple data inconsistencies within and among the FAA documents that may have contributed to the identified error rates, as well.

Source: Past and Future: An Analysis of the FAA Commercial Space Transportation Forecasts 2017

FAA Launch Forecasting 2017+

FAA’s 5-year launch and reentry operations forecast relies on data collected from operators and prospective applicants as the starting point for its launch and reentry forecasts, tying launch and reentry forecasts directly to anticipated operations by commercial space transportation firms known to FAA. The FAA also takes into account historical data when developing their forecast.

However, all forecasts are made based on information available at a point in time. There are several variables that can affect the accuracy of predictions for the the number of launches and reentries to expect in a given year. They include:

list of firms intending to launch or actally launch is dynamic,
continued development of new technologies,
launch rates for reusable launch vehicles,
commercial human spaceflight by both government astronauts and private citizens,
dynamic nature of flight test programs, and
mishaps.

New technologies allow a faster operational tempo, and at the same time, early use of these techologies can increase the probability of a mishap. A mishap can drastically impact launch plans for one or more firms. Investigations and subsequent “return to flight” for firms impacted by a mishap can take months. A recent mishap is the in-flight failure of Blue Origin’s uncrewed New Shepherd launch vehicle in September 2022; Blue Origin was forced to stop all flights, and as of January 2023 the mishap investigation is still ongoing.

Current FAA Forecast

It is important to note that all FAA-authorized commercial space operations are included in their forecasts, regardless of where they occurred in the world. All US headquartered launch businesses must have every launch licensed by the FAA regardless of where the launch is going to happen. Also note that the FAA forecast does not include launch activity not authorized by the FAA (e.g. U.S. Department of Defense or non-commercial NASA launches), launch activity for other nations, and this forecast is not tied exclusively to satellite demand.

Discussion

From 1995 to 2016, the FAA consistently overestimated the number of commercial launches. The FAA continued to refine their forecasting model and between 2017 and 2020, the actual and FAA forecast numbers were very well aligned.

However, in 2021 and 2022, the FAA forecasts significantly underestimated the number of launches. This was due to SpaceX, who started to ramp up their launch cadence, making 61 launches in 2022. SpaceX is continuing to increase their launch cadence, and is forecasting up to 100 launches in 2023.

FAA commercial launch forecasts provide a data point that organizations can incorporate into their planning process. The FAA is uniquely positioned because they have access to both accurate historical data as well as forward looking intentions of the industry organizations that are required to receive licenses from the FAA.