The Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT) through their joint project, United Launch Alliance, have gone into a partnership with Blue Origin for the manufacture of an ultramodern rocket engine which is set to be tested in 2016. The rocket engine is planned to first fly in 2019.
United Launch Alliance is currently relying on RD-180 supplied by Russia to power the Atlas 5 rockets it operates.
The next generation engine by The Boeing Company (NYSE:BA), Lockheed Martin Corporation (NYSE:LMT) and Blue Origin, BE-4, is expected to cost United Launch Alliance a lot less than what the venture is current paying for the RD-180 engines.
The Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT) have said that they still have a contract with Russia for the supply of RD-180, which is expected to expire in 2 years time. The remaining part of the contract consists of 11 more engines to be supplied by the end of 2015. However, the two space companies have clarified that they are having the BE-4 as backup just in case something happens that jeopardizes the Russian supply.
This move comes at a time when NASA just announced a contract given to two U.S. companies, Space Exploration Technologies Corporation, The Boeing Company (NYSE:BA), to build a space taxi to the International Space Station to avoid the current situation where U.S. is relying purely on Russia services. Such moves are seen as measures taken by the U.S. government as plan B, just in case the worsening relationship between Russia and other nations of the situation in Ukraine leads to a cut in the supply of such services.
The two companies, The Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT), have been the face of rocket launch services, but the latest trends are showing more competition developing.