Airbus Safran’s Ariane 6 Bid is In but CNES Buyout is Unresolved

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PARIS — Airbus Safran Launchers has submitted its formal bid to design and build Europe’s next-generation rocket, a contract to be valued at around 3.2 billion euros ($3.6 billion) that the European Space Agency hopes to sign by the end of June.

The contract does not include a new Ariane 6 launch pad, a contract with an estimated value of about 600 million euros that is under the responsibility of the French space agency, CNES, not the industry team.

Airbus Safran’s bid, submitted May 7, will be put on a fast-track evaluation at ESA, which with Airbus Safran Launchers has already determined most of the details. The goal is to develop the vehicle in time for an inaugural launch in 2020.

What remains unclear is how large a portion of the 3.2-billion-euro total development cost will be shouldered by industry. Both Airbus Safran Launchers and its principal subcontractors. ESA and Airbus had, in effect, agreed to disagree in mid-March about an ESA-requested industrial contribution of up to 400 million euros.

Airbus Strategy Diretor Marwan Lahoud said May 6 that industry remained willing to pay a share of the development charges as part of an overall rebalancing of responsibility between Ariane manufacturers and European governments.

Airbus Safran Launchers' industrial footprint spans France, German and French Guiana in South America. Credit: Airbus Safran Launchers graphic
Airbus Safran Launchers’ industrial footprint spans France, German and French Guiana in South America. Credit: Airbus Safran Launchers graphic

One sticking point has been whether the contract’s final signature would be slowed by ongoing negotiations over the cost to Airbus Safran Launchers of the approximately 34 percent stake in the Arianespace launch consortium now owned by the French government -— mainly through CNES.

Airbus had said it wanted to conclude a purchase of CNES’s Arianespace shares in advance of a contract, or at least at around the same time. CNES officials have declined to set a deadline.

“You can’t take on responsibility without financing a portion” of the development charges, Lahoud said of the Ariane 6 financing scheme in testimony to the French National Assembly, or parliament. “Industry will pay a portion, and when I say industry I mean mainly Airbus and Safran, which are the two gorillas in the space launch business.”

The fate of Evry, France-based Arianespace following a purchase of the CNES shares — which would give Airbus Safran Launchers a 74-percent stake in the launch services company — is unknown.

The German and Italian Arianespace shareholders have expressed reservations about having an Airbus takeover. Some government officials have added that either CNES or ESA should maintain some ill-defined presence in the company as well.

In his testimony, Lahoud sought to reassure satellite builders, including Thales Alenia Space of France and Italy, that an Airbus-controlled Ariane 6 would not lead to commercial or design biases in launcher sales.

He said just as missile-maker MBDA works just as hard to sell to both Europe’s Eurofighter and the competing Rafale jet fighters despite MBDA’s being owned by Eurofighter shareholders, Airbus Safran Launchers will ensure strict neutrality with respect to all satellite builders.

While the development of Ariane 6 and the effort of Arianespace and Airbus Safran Launchers to adapt the current Ariane 5 to the commercial market have received most of the publicity in recent months, Lahoud said a similar revolution was occurring in the satellite business.

He said Airbus Chief Executive Tom Enders had asked Airbus’ management team to join him on a tour of California’s Silicon Valley to take the measure of the new business practices that were born there and are now spreading to the space industry.

The key to the revolution, he said, is that satellites will now be built so that they can be delivered by the tens every month for tens of thousands of euros, rather than custom-made spacecraft that takes two years to build and costs tens of millions of euros.

Airbus Defence and Space is one of several companies bidding on the OneWeb global Internet-delivery constellation managed by OneWeb LLC of Britain’s Channel Islands.

Lahoud said Airbus, whose missile, helicopter and aircraft divisions already deliver at this rate, is well-placed to use intra-company synergies to adapt to the new satellite market.

“Building satellites in this way forces you to think in new ways about space applications,” he said. “[O]ur visit to Silicon Valley took me back to my youth as an engineer. We need to question anew the way we are doing things.”