Russian aerospace firm Energia declares “critical” situation in possible effort to secure state contracts

Igor Maltsev, the CEO of Russia’s S.P. Korolev Rocket and Space Corporation «Energia,» has openly acknowledged that the company is in a dire situation. On August 27, the Kremlin-aligned outlet Gazeta.ru published a screenshot of the congratulatory message Maltsev sent to employees on the 79th anniversary of the company’s founding. In that address, the CEO wrote:

“Today the company turns 79. This is an important milestone, but it would be wrong to celebrate it with words about past achievements — empty slogans will not save the company…The situation is critical: multimillion-dollar debts, loan interest eating up the budget, many inefficient processes, and a significant part of the staff left without motivation or any sense of responsibility… In essence, saving the company is a task that will require something bordering on a miracle: we must do everything that is possible, and also what is impossible — God help us!”

Energia manufactures the crewed Soyuz spacecraft and the unmanned Progress cargo ships, maintains the International Space Station, and is developing the Orel, a partially reusable crewed spacecraft.

Earlier this summer, Russian media reported that a criminal case against former Energia head Vitaly Lopota and his deputy Alexander Pyzin had been closed due to the expiration of the statute of limitations. The two men had been accused of abuse of power in connection with the Sea Launch floating spaceport project between 2010-2014. Investigators alleged the project was knowingly unprofitable, and that Lopota signed financing agreements out of personal interest.

Notably, Energia’s partners once included the U.S.-based Boeing Commercial Space Company, Norway’s Kvaerner (now Aker Solutions), and Ukraine’s Yuzhnoye Design Bureau and Yuzhmash Production Association. The spaceport was intended for launches of Ukrainian Zenit-3SL rockets, but the project was permanently frozen in 2014 after Yuzhmash had withdrawn from cooperation following Russia’s illegal annexation of Crimea.

The “Russian Orbital Station” (ROS) is a project that is intended to replace Russia’s segment of the ISS with a standalone station. It was first conceived in 2014, but the draft design stage was only completed in 2023.

Space analyst Vitaly Egorov told The Insider that although Energia’s current state is indeed dire, the company’s leadership may be exaggerating the difficulties in an effort to secure lucrative government contracts:

“For Energia, the situation is indeed serious due to sanctions and the state’s shift in priorities toward military goals, but it is not a disaster. It’s simply another way of drawing attention to the company — a lobbying tactic. One of the modern ‘pillars’ of Putin’s regime is crewed spaceflight, and that means Energia will not be shut down.”

It is hard to say why such a peculiar format was chosen — a congratulatory message on the corporate website. Perhaps the idea was to boost internal morale among employees. Or, conversely, to pass it off as an “unauthorized leak,” knowing there was a high likelihood the message would surface publicly. In any case, publishing something like this openly would have been far too bold a move — this way, it almost looks accidental.

Energia’s main hope now is the Russian national orbital station, designed to replace the ISS. It would be a major contract that could provide the company with stable funding in the long run. But the ROS project has not yet been approved, its financing has not been outlined, and no funds are being allocated. Perhaps for Maltsev this was a way to push forward a decision on ROS funding.”