The State of Alaska is facing a significant fiscal challenge with the recent decline in oil revenues. The state budget for FY 2016 is projected to have more than a $3.5 Billion deficit. Today, Governor Walker released his revised FY 2016 state budget, which did not include the $4.175 million state funding request for operations and sustainment of Alaska Aerospace Corporation (AAC)
This fact sheet is intended to explain what this means to AAC and aerospace activities in Alaska and answer questions as to the future of the Kodiak Launch Complex (KLC).
AAC remains an operational aerospace company in Alaska. This reduction of state funding for AAC will not result in the shut-down of AAC or KLC.
AAC is sufficiently capitalized to continue providing all services to customers and potential customer requirement
AAC is currently rebuilding the KLC facilities damaged last August with the failed launch. This project is being funded by insurance funds and is not part of the state discretionary capital projects budget. The reduction in the FY 2016 operating budget for AAC will have no impact on rebuilding the damaged facilities.
AAC is under contract with MILTEC for launches from KLC. With the rebuilding of the damaged facilities at KLC, AAC will be able to meet all commitments under the MILTEC contract for future launches.
AAC has a contract with Blackbridge for distribution of Alaska geospatial imaging data acquired by the RapidEye satellite constellation for commercial use. The reduction in the FY 2016 operating budget has no impact on AAC’s ability to fulfill this contract.
AAC has a contract for tracking the Dragon capsule on missions to/from the International Space Station. The reduction in the FY 2016 operating budget has no impact on AAC’s ability to support this contract.
AAC is currently in negotiations with a number of potential customers to provide services from KLC. The reduction in the FY 2016 operating budget has no impact on AAC’s ability to consummate any of these contracts.
On December 26, 2014, Governor Walker issued Administrative Order (AO) 271, directing state agencies to halt, to the maximum extent possible, discretionary expenditures on six projects. AAC responded to the Administration on January 5, 2015, verifying that all work had been suspended on the KLC medium-lift initiative. As a result of a competitive process AAC had used to attract a medium-lift customer to KLC, AAC was able to offer back $22.0 million to the administration and requested that AAC be authorized to proceed with the medium-lift project, using only $3.0 million of the original $25.0 million capital appropriation. At this time, that project remains on hold.
AAC has been working with the Walker Administration to determine the optimum means to sustain a viable aerospace business in Alaska while concurrently reducing dependency on state revenues. These discussions will be continuing over the coming weeks. AAC looks forward to working with the Administration and Legislature to continue pursuing the most professional, cost- effective aerospace capabilities in the United States and providing jobs for Alaskans.