Australia Cancels Lockheed Martin Satellite Deal, to Invest $9-12B in Enhanced Space Capabilities

Australia has officially canceled its procurement of a Geostationary Earth Orbit (GEO) satellite from Lockheed Martin Australia, shifting its focus to a multi-orbit satellite communications strategy.

The decision reflects a broader reassessment of national defense priorities in the context of evolving threats in the space domain. The Australian Department of Defence announced plans to invest between $9 billion and $12 billion to enhance its overall space capabilities, as outlined in the recently released 2024 National Defence Strategy.

The cancellation of the GEO satellite deal marks a significant pivot for Australia, which had initiated a tender for this system in 2021. After evaluating current and anticipated requirements, the Department of Defence concluded that a single GEO-based solution would not sufficiently address the strategic demands presented by the rapidly changing environment in space. This decision comes just 18 months after the program was set to move forward, initially projected to become operational by 2027.

Critics of the cancellation, including Australia’s Shadow Defence Minister Andrew Hastie, have expressed concern over the impact on the country's defense capabilities. Hastie characterized the termination of the AUD $7 billion (approximately $4.5 billion) project as a "disgraceful decision," highlighting potential ramifications for Australia's strategic oversight and future military coordination.

Moving ahead, the Australian Defence Force aims to develop a more resilient satellite communications capability that employs a multi-orbit architecture. This approach is seen as essential to meet the emerging requirements of modern defense operations and to address existing gaps in capability. While current satellite communications resources are deemed adequate for immediate operational needs, the shift towards smaller, more numerous satellites reflects a trend observed in the United States, which is also reconsidering its reliance on large, single-orbit satellites due to vulnerabilities.

The cancellation also involves Lockheed Martin and Northrop Grumman, the latter of which was expected to contribute to the next-generation sovereign satellite communication component for the Australian Defence SATCOM System.

This strategic redirection comes as legacy defense contractors face challenges in adapting to rapid technological changes within the space sector. Companies like Airbus and Boeing are undergoing significant shifts, with Airbus shedding jobs amid financial losses and Boeing potentially divesting certain space ventures to concentrate on its core business.