Coronavirus: OneWeb at Kennedy Space Center files for bankruptcy
OneWeb, the parent company of an organization that manufactures internet-beaming satellites near Kennedy Space Center, filed for bankruptcy late Friday, citing the coronavirus pandemic as a significant driver behind the decision.
In a release, OneWeb said it filed for Chapter 11 relief in the U.S. Bankruptcy Court for the Southern District of New York and hoped to sell its business "in order to maximize the value of the company."
"It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process," OneWeb CEO Adrian Steckel said in a statement, confirming COVID-19 as the main reason. "The company's remaining employees are focused on responsibly managing our nascent constellation and working with the court and investors."
The company did not specify how much of its workforce at the KSC division, located near Blue Origin on Space Commerce Way, would be impacted, but did say there have been layoffs and furloughs. OneWeb is the parent company, while OneWeb Satellites is a separate division that manufactures spacecraft on KSC-owned land outside the center's gates.
Airbus Defense and Space owns half of OneWeb Satellites, while OneWeb owns the other half.
"Like many companies and industries, the COVID-19 pandemic has unfortunately had a direct negative impact on our business. The resulting economic disruptions are slowing supply chains and are interfering with our ability to travel and fully operate our sites," the local operation said in statement to FLORIDA TODAY.
"A reduction in force is required to maintain our operations," the statement reads. "We are primarily implementing temporary furloughs to have the flexibility to respond to the changing environment."
OneWeb also operates an administrative office in Suntree.
Its neighbor, the KSC Visitor Complex, is also closed and some employees have been told to use paid time off in order to continue getting paychecks.
In its 21-page bankruptcy filing, OneWeb said it by far owes the most money – $238 million – to European launch provider Arianespace. Its next largest obligation, worth $8 million, is to California-based Qualcomm, a semiconductor and telecommunications company. On the Space Coast, the filings show that OneWeb owes USSI Global, based in Melbourne, about $550,000.
The company has also received billions of dollars in investments with SoftBank, a Japanese conglomerate, as one of the most prominent.’
With 74 satellites already in low-Earth orbit and future launches scheduled, the company has demonstrated the technical feasibility of its small-satellite internet constellation. Users have seen speeds up to 400 Mbps with medium latency, which is roughly comparable to what some customers can get at home.
OneWeb was the first company to receive approval from the Federal Communications Commission for a low-Earth orbit mega-constellation of internet satellites, which are about the size of a mini-fridge. The constellations differ from legacy systems, which have been in operation for decades and operate at high orbits thousands of miles above Earth.
SpaceX is perhaps the most visible example of a company looking to capitalize on the need for worldwide internet access with its Starlink constellation, which already has more than 350 satellites in orbit. It hopes to begin preliminary services for U.S. customers sometime late this year.
But CEO Elon Musk, knowing the history of internet-based internet and its inherent riskiness, said his main goal is to not "go bankrupt." The systems face significant challenges, like upfront development and launch costs, before they can even start providing services.