Back-to-back rocket launch failures have dealt Russia one of the heaviest blows to its space industry since the Soviet collapse - with national pride and billions of dollars at stake.
The setbacks threaten to erode Russia's leading position in the multibillion global launch market, in which it commands an estimated 40 percent share, and dent President Vladimir Putin's efforts to boost the country's global prestige.
The competition for lucrative commercial satellite contracts is intensifying, with American, European, Chinese and Indian companies all eager to expand their share. Deputy Prime Minister Dmitry Rogozin warned this week that Russia could soon lose its chunk if the problems aren't fixed quickly.
Government officials and experts agree that the latest booster rocket failures are rooted in a steady decline of production standards and poor oversight at state-controlled rocket builders, but opinions vary on how the problems might be solved.
Highlighting space industry woes, the workers building the new Vostochny space launch pad in the far eastern Amur region went on hunger strike last month and appealed directly to Putin, complaining that they have gone unpaid for months. The head of a state-controlled construction company and three subcontractors have been arrested in the case.
The Kremlin has offered yet another plan for the reorganization of the industry, which has seen numerous shake-ups in recent years. A presidential bill that received preliminary approval by the lower house this week pulls all the nation's space assets together in one giant state-controlled commercial corporation.
In a speech to lawmakers, Rogozin cast the proposed reform as essential for establishing tight control over money flows, cutting production costs and uprooting corruption. He admitted that U.S. space industries are now nine times more efficient than Russia's space industry.
Critics say, however, that other giant state corporations created during Putin's 15-year rule, as part of his efforts to concentrate lucrative economic assets in state hands, have not exactly been success stories. They say these state conglomerates suffer from mismanagement and inefficiency and are dogged by corruption.
Rogozin said that a recent investigation into the activities of the Khrunichev company, the manufacturer of the heavy-lift Proton booster rocket, revealed numerous instances of fraud, abuse of office and falsification of documents, resulting in economic damage of 9 billion rubles (more than $180 million).
"With such degradation in the leadership, a high accident rate isn't a surprise," Rogozin said.
The latest Proton rocket launched over the weekend developed a problem in its third-stage engine eight minutes into the flight, resulting in the loss of a Mexican communications satellite.
The Proton has been the main cash cow for the Russian space industries since the Soviet collapse, capable of lifting 20 metric tons of payload to high geostationary orbits. Experts warn that the accident, which follows a series of other Proton failures in recent years, may discourage potential clients.
"Any such accident derails the launch schedule, and customers don't like it," said Igor Marinin, the editor of Novosti Kosmonavtiki space magazine. "The longer the delay, the bigger the number of unhappy customers."
The Proton setback is particularly worrisome as it comes in the footsteps of the failure of the second main type of Russian booster rocket, the Soyuz, which also suffered a breakdown in its third stage after its launch on April 28. An unmanned Progress cargo ship it was carrying was stranded in low orbit and soon fell to Earth over the Pacific, depriving a six-person crew at the International Space Station of its scheduled portion of supplies.
While the crew at the space outpost won't experience any shortages as current stockpiles will last for months, the Soyuz launch failure has prompted Russia to delay both the scheduled landing of some of the station's crew and the launch of their successors.
Space officials now need to make sure that the Soyuz rocket, used to launch both the manned Soyuz spacecraft and the Progress cargo ships, is safe to put the next crew in orbit. The next crew launch atop the Soyuz was pushed back from late May to late July, to be preceded by an unmanned Progress launch in early July.
If the Soyuz problem persists, it may pose a serious challenge to the International Space Station program, which has relied entirely on the Soyuz spacecraft for ferrying crews after the grounding of the U.S. shuttle fleet.
The successive launch failures mark a rare case in which both main booster rockets used by the Russian space program are out of service at the same time pending crash probes.
The two rockets have been the workhorses of the Soviet and then Russian space industries for five decades. Work on building their replacement has dragged on slowly for about 20 years, and the new booster, the Angara, was successfully launched for the first time in December.
A government panel has traced the latest Soyuz failure to a leak from propellant tanks in its third stage, but it has yet to determine the reason for that. It's not clear yet what happened to the Proton.
The Proton's latest failure was its seventh launch accident in 4 1/2 years. While the cause of Saturday's setback hasn't been determined, the previous accidents have been triggered by manufacturing flaws and human error.
The series of failed launches has prompted the Kremlin to continuously reshuffle the industry's top brass. The Roscosmos space agency has seen four directors in as many years, but the failures continue.
Amid tensions with the West over Ukraine, some even suggested that the failures could have been caused by sabotage. Most observers agree, however, that the likely root is space builders' plunging quality standards.
"It's a personnel problem above all," said Konstantin Kreidenko, a former space official who is now editor of Glonass Vestnik, a space magazine. "It could be a wrong cable connection, or use of bad fuel or some filter getting clogged. They need to check the entire chain and introduce stringent quality controls."
In one example, a dramatic Proton crash in July 2013 shown live on national television was traced to an ill-qualified worker rudely violating assembly instructions and placing orientation sensors upside down with the help of a hammer.
Kreidenko said the current quality management is a far cry from Soviet times, when "instructions were observed like military regulations."
"In the Soviet Union," he said, "people were losing jobs and suffering heart attacks for far smaller blunders."