OT Interviews: Dragonfly’s David du Toit

Editor’s note: Sometimes, an interview takes an unexpected direction and it’s worth setting aside the  original theme. This is one such case. Dragonfly Aerospace’s David du Toit created an Advisory Board for the company, and I wanted to ask him about corporate governance and the maturation of space tech. What precipitated from the interview, though, was a first-person account of the significant shifts in the satellite industry as a whole and with regard to the UK in particular over 2022.

From the effects of war to broader security concerns and the churn of governments, there’s a lot of ground covered here. And as for those corporate governance quotes, we’ve still got them. I think Orbital Today readers will be reading quotes from David du Toit for some time to come.

Interview with David du Toit

Something that needs to be said much louder:
When private companies are involved in launching satellites, the sovereign liability must be addressed.

WORKING WITH GOVERNMENT

…we realised that space awareness has taken a whole new momentum in our industry.

OT: When Dragonfly decided to move into the UK market, how did you go about accomplishing that?

DdT: Having previously worked extensively in the United Kingdom I have a strong understanding of the industry and opportunities available in the sector. I believe that networking is a crucial factor in establishing a strong base in the market and that it is imperative to build a strong network relationships – with the right peer groups – to facilitate growth. Without this in place, it would have been very challenging for us to establish and expand our brand and its capabilities in the market. Keeping this in mind, we have explored a few areas of growth and one of them was with the UK government – in the aerospace industry, governments play a significant.

With the war breaking out between Russia and Ukraine in early 2022, we have witnessed a rapid shift in the industry. In April 2022, when I was in Colorado Spring with our CEO Bryan Dean, we realised that space awareness has taken a whole new momentum in our industry. Previously, we had a strong focus towards the commercial side of our industry, but over the past year we have also moved towards partnerships in government activities. The United Kingdom has increased its focus on space, specifically with regards to its future security and defense, which brings a lot of opportunities for an innovative, growing business like ours.

GOVERNMENT INVESTMENT

If we look again at the Russia-Ukraine war, we saw what happens when communication structures start failing.

OT: You recently mentioned about your keen interests in building partnerships with the UK government. But we have seen the government facing a turbulence and going through bout of changes. While this seems to be in the past, is it any different now?

DdT: I think that with the changes in government, we are seeing a lot of changes in the space industry.

The market is finding itself charged up with a new energy and government investment is growing in the space industry. I believe that these changes are linked to the Russia-Ukraine war – as over the past year there has a growing focus on sovereign security and defense.

It is great to see that the UK government is having a strong affinity for space and a recognition of the importance of investing in it. We are also aware that as the world is going through an economic turmoil, every penny spent by the government would be closely scrutinised and the projects will also face a similar scrutiny.

WHAT GETS FUNDED

OT: With the shifts in government over for the moment, the budget is a hot issue. Some academicians have predicted that funding research is going to be narrowly focused. Do you resonate with this opinion?

DdT: I think going forward, there is going to be a revised focus on a few areas. However, communications will always stay fundamental in terms of investment.

If we look again at the Russia-Ukraine war, we saw what happens when communication structures start failing. I feel that Russia experienced this in a big way. While they made significant attempts in combating – challenges were raised in access to communications. Coverage of communications is going to be a hot topic of discussion.

From an aerospace perspective, the sensors of earth observation will continue to be important for the military as well as commercial purposes. There is also the socioeconomic perspective as well. This includes agricultural, mining and water management and a focus on energy efficiency. Specialised earth observation sensors will contribute to improving this in the future.

It is also well known that space awareness capabilities will play a pivotal role for future security and defense structures. So, while there is a broad scope, we are quite focused on being in earth observation. However, we are very delighted and positive about the opportunities for electro optic and radar payload sensors.

RESPONSIBILITY IN SPACE

OT: What kind of overhaul do you see is required in government – industry relations regarding responsibility for spacecraft?

DdT: The fundamental fact in the aerospace industry is that countries have signed up for the International Space Treaty and are bound by it. If they continue to abide by the norms as laid down in the agreements, I feel we are in a very good position.

Developing countries lack formal government structures in space programs and space governance and I think this poses a lot of challenges in the industry.

With advancements in space, countries are still sovereignly responsible for any liability that occurs out of space – and this brings along a lot of challenges. For instance, as a nation, if you launch a satellite and it causes damage either to the planet or to objects in space, it becomes a sovereign liability for the country. With that perspective, countries must be extremely mindful of their involvement in the space. They must ensure that they have laid down a well-crafted government structure to deal with all sorts of outcomes.

INSURANCE

When private companies are involved in launching satellites, the sovereign liability must be addressed.

OT: You also mentioned about insurance. Do you think that insurance market is underdeveloped?

DdT:. The challenge for countries lies within the sovereign liability they take on with products in space.

When private companies are involved in launching satellites, the sovereign liability must be addressed.

The first is that governments need to ensure that when private players put their products in space, they are following due diligence, undertaking the correct level of responsibility, whilst ensuring the products are safe. It’s also important that governments don’t transfer some of that liability onto the private industry and make them economically unviable for the market. It is about what the government will accept as their share of liability and what they expect from the private industry.

There should be a balance between the insurance policies as well. Today, the probability of an unfortunate incident is rare – and the insurance premiums are still feasible in the commercial environment. In Europe it is a legal requirement that a company putting its satellite in space must have insurance cover for around €60 million. However, if cluttering of space causes further incidents – insurance companies would be compelled to restructure their insurance policies.

The times ahead are very interesting for the industry, but we are keeping a close eye on all developments as we adapt our strategies to ensure we are aligned with the sector.

Orbital Today would like to thank David du Toit for taking the time to speak with us. We look forward to finding any excuse possible to do so again!