Aerospace Defense & Space Industries Now a Foundation for the Local Economy

By Rodney Campbell
April 11, 2022

The five Cs of the Arizona economy – copper, cattle, cotton, citrus and climate − that have traditionally driven growth in Arizona might need to dip into the alphabet soup for another economic driver.

The aerospace/defense and space industries are flying high in Southern Arizona with businesses spinning off from technologies developed at the University of Arizona or through partnerships between global companies.

Take, for example, FreeFall Aerospace, which develops antenna technology for satellite communications, fixed and mobile ground stations, aerial platforms and for a variety of commercial and government applications. The company got its start in 2016 with high-frequency radio technology developed at UArizona.

CEO Doug Stetson chalks up his company’s existence and success to its origins on campus.

“We are very much tied to Tucson,” he said. Collaboration with the UA “benefits FreeFall Aerospace with a pipeline of talented engineers from UA, partners like AGM Container Controls, and local investors like UAVenture Capital. Each milestone our products reach is a crucial step for FreeFall, the University of

Arizona and Tucson’s developing space economy.”

In January, Northrop Grumman, which has a facility in Sierra Vista, awarded a contract for more than $100 million to Paragon Space Development, a company headquartered in Tucson. The deal calls on Paragon to put together a life-support system for the Habitation and Logistics Outpost program. HALO will be deployed in lunar orbit as the first crew module of NASA’s Lunar Gateway. It will serve as a crew habitat and docking station for spacecraft that travel between Earth and the moon.

Northrop Grumman also partnered with Raytheon Missiles & Defense, also headquartered in Tucson, last September to complete the first flight test of a scramjet-powered Hypersonic Air-breathing Weapon Concept for the Defense Advanced Research Projects Agency and the U.S. Air Force. The companies are on track to deliver a prototype system to the U.S. Department of Defense.

“Tucson has been a growing hub for space manufacturing for years,” said Phantom Space CEO Jim Cantrell, whose company provides spacecraft construction and full-service launch capability. “It’s inspiring to see the kind of work being done here from companies like Paragon Space Development and FreeFall Aerospace. Unlike most cities, there’s a real community here for aerospace technology, a community that motivates, inspires and encourages growth.”

Ascent Aviation Services provides maintenance, modification, storage and reclamation services on aircraft at Tucson International Airport and Pinal Air Park near Marana. Ascent President/CEO Dave Querio’s company found another advantage in Southern Arizona during the pandemic.

The International Air Transport Association found that demand fell by 65.9% in 2020 compared to 2019, easily the sharpest traffic decline in aviation history. Ascent, a supplier of services to airlines, leasing companies and fleet managers across the globe, was able to store more than 400 client aircraft here when the desire for air travel dropped during COVID. Having the space to put all those big jets here made Querio thankful to be in Southern Arizona.

“With Tucson’s deep association to aviation and aerospace, we are fortunate to be able to call the Tucson metroplex home,” he said.

Joe Snell, president and CEO at Sun Corridor Inc., the region’s economic development arm, has another “C” to throw into the mix. His organization plays a significant role in attracting and keeping high-tech industry in Southern Arizona. That requires coordination.

“We have worked with a wide range of businesses in this space over the past 15 years,” he said. “These projects take intense coordination, which we quarterback among all regional partners, as well as private dinners and meetings. Roadblocks appear and we knock them down. We’re great problem solvers. We’ve done this a long time and we know what’s important to companies.”

One of Sun Corridor’s key victories came in 2020 when it worked with local officials to keep Raytheon Missile Systems here by delivering Raytheon Integrated Defense from Massachusetts. The relocation resulted in Tucson becoming home to the new Raytheon Missiles & Defense business. The collaboration resulted in the addition of 2,000 jobs and an impact of several billion dollars.

“This would have been an unprecedented loss for this community if that hadn’t happened,” Snell said. “This took private conversations with Raytheon at the highest levels, and we ultimately won the deal.”

All of this collaboration adds up to real money. The Southern Arizona aerospace and defense industry pulled down $12.2 billion in Department of Defense contracts in 2019, according to the Arizona Commerce Authority. During the pandemic a year later, companies across the entire state earned $17.3 billion in contracts.

The positive effects of those agreements are felt throughout the community. There are more than 25,000 people employed in the industry in the region.

“Aerospace and defense companies offer high wages, at every level, for all our citizens,” Snell said. “These industries lead to a stronger economic foundation for all.”

Universal Avionics has a 165,000-square-foot headquarters near Tucson International Airport. The company, which has been in business for four decades, specializes in making and fixing flight management systems and cockpit instrument displays for private, business and commercial aircraft.

“Tucson is a great place for our headquarters with manufacturing and repair being integral to our success,” said Steve Pagnucco, VP of operations. “We have a large modern facility that has and continues to allow us the ability to produce many of our own components which has allowed us to continue to deliver for our customers through supply shortages.”

World View Enterprises, which specializes in space tourism and exploration, started in 2012 because of a collaboration with Pima County. The organization’s headquarters at Spaceport Tucson is where the company manufactures its stratospheric balloons and fabricates the crafts it flies on remote sensing missions. World View also launches stratospheric missions from Tucson.

CEO Ryan Hartman said the region’s strong tradition in the aerospace and space industries made Tucson a natural choice for his company’s headquarters.

“Tucson provides an exceptional breeding ground for some of the top aerospace talent in the world,” he said. “Being headquartered in Tucson has allowed us to recruit and employ some of the best and brightest minds in the industry who exemplify our company ethos.”

Phantom’s Cantrell is bullish on the space industry’s future in Tucson, including for those who earn their living on the ground.

“The need to explore outer space isn’t going anywhere,” he said. “The need for space technology and manufacturing isn’t going anywhere. The need for Tucson’s bustling industry isn’t going anywhere. Tucson, and by extension the state of Arizona, will continue to lead the way when it comes to space technology production, manufacturing and launching.”

In addition to its facility at Tucson International Airport, Universal Avionics has facilities in Marana. It has electronic assembly, test and repair facilities here that are responsible for building and supporting the company’s avionics products for customers around the world.

Universal CEO Dror Yahav said Tucson is the perfect spot for his company because of the region’s collaboration and competition.

“Tucson is home to a great aviation and aerospace community which allows us to attract talented professionals who are looking to make advances in the aviation and avionics industries,” he said. “The city is becoming a hub of innovation, and for startups and people looking for alternatives to California. We are excited to be part of this growth.”

Snell said Tucson competes with larger cities including Austin, Denver, Dallas, Seattle and Portland as well as smaller communities such as Huntsville, Ala., and Wichita, Kan., when recruiting and retaining high-tech companies. He said Tucson is ranked in the top 10 among metro regions for aerospace manufacturing because of its highly concentrated aerospace product and parts manufacturing sector.

It helps to have great weather, a world-class university producing quality graduates in the sciences, and engineering and complementary businesses to push organizations to success.

“Southern Arizona’s clear blue skies, stable weather and dry climate have attracted aerospace-related businesses since the early 1990s,” Snell said. “Our natural environment was and still is a draw, and with decades of aerospace and defense companies locating and operating here, we have built an amazing pipeline of talent and workforce to fill their needs.”

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