Advances in rocket engine technology do not come along often, so it was noteworthy in October 2012 when Orbital Technologies flew a sounding rocket powered by its “vortex” engine, which injects fuel and liquid oxygen so the burning mixture does not touch the walls of the combustion chamber, allowing it to be thinner, lighter and cheaper. Oxidizer is injected at an angle that sets up a pair of coaxial vortices. Combustion occurs in the innermost swirl, the outer vortex protecting the chamber walls from the heat of combustion.

European government bickering scuttled a mega-merger of EADS and BAE Systems, and the Pentagon continues to hold firm against further consolidation among its top contractors. But consolidation amid second- and third-tier contractors is likely to accelerate as defense spending heads down in the U.S. and Europe.

NASA Space Launch System (SLS) advocate Sen. Kay Bailey Hutchison (R-Texas) is leaving Capitol Hill, but the program should get a boost by meeting an early test. An engineering board has cleared the first element of the heavy-lift rocket for preliminary manufacturing, keeping the program on track for a first flight with the Orion multipurpose crew vehicle in 2017.

Market shifts, new competitors bring change to launch-vehicle business

NASA wants $800 million in fiscal 2013 for its program to outsource the transport of crews to and from space, and says if it does not get the funding first commercial flights to the International Space Station will slip to 2018. With station funding set to expire in 2020, that could be a problem.

As the U.S. military pulls out of Afghanistan and “resets” for the Pacific theater, will there be an accompanying shift in the Defense Department's intelligence, surveillance and reconnaissance forces? The year should see the beginning of a shift away from lower-tech systems geared to detect improvised explosive devices and toward future high-tech sensors.

Dozens of women are filling senior management positions across aerospace and defense, changing the face of an industry not known for diversity. Another glass ceiling will shatter on Jan. 1, when Marillyn Hewson (right) becomes CEO of Lockheed Martin and Phebe Novakovic fills the top spot at General Dynamics.

The U.S. Ground-Based Midcourse Defense system, which has not had a successful intercept since 2008, is expected to return to flight in early 2013 after a two-year hiatus. And the U.S. will continue to roll out its Phased Adaptive Approach to protecting Europe, including construction of the first Aegis shore-launch site in Romania and further flights of the improved SM-3 Block 1B interceptor.