France Giving up Arianespace Ownership, but not Oversight

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LE BOURGET, France — The French government will be able to maintain a firm oversight role over the Arianespace launch consortium despite the government’s agreement to sell its 35-percent stake in the company to Airbus Safran Launchers, the president of the French space agency, CNES, said.

The sale of the shares in Evry, France-based Arianespace has been cleared by the French government, headed by Prime Minister Manuel Valls, apparently after Airbus Safran Launchers provided guarantees that Arianespace would not move from its Evry headquarters.

Valls is a former mayor of Evry — a remarkable coincidence that likely reduced the chance that Arianespace would be moved to Airbus Safran Launchers’ facilities in a cost-cutting consolidation. Employment concerns in generally low-income Evry are a high priority for local political leaders, and for Valls.

In a June 16 briefing, Arianespace Chief Executive Stephane Israel said the company would be 74-percent owned by Airbus Safran Launchers after the sale of the CNES shares, but that Arianespace would remain a separate operating entity.

In a statement on the pending transaction, Arianespace said it would not only stay in Evry, but also retain its offices in Washington, Tokyo and Singapore.

The statement nonetheless referred to “operating synergies” that would result from the consolidation of Arianespace under Airbus Safran Launchers. Israel said no significant workforce reduction was planned for now, and that in any case Arianespace and Europe’s overall space-launch industry needed to evolve with the changing competitive landscape — notably from lower-price competitor SpaceX of Hawthorne, California.

Israel said that if the Ariane 6 rocket, to fly starting in 2020, meets its cost and schedule requirements, it will keep Arianespace a leader in the market and assure the maintenance of jobs that might disappear if the company and the industry did not evolve.

Israel did not exclude a reorganization of activities between Arianespace and Airbus Safran Launchers at the Guiana Space Center, Europe’s spaceport on the northeast coast of South America.

CNES President Jean-Yves Le Gall said that while the government’s formal control over Arianespace would diminish with the ownership transfer, Europe’s launch sector remains a government-enabled entity.

Le Gall noted that CNES and the 22-nation European Space Agency are co-managers of the Ariane 6 development, even if Airbus Safran Launchers has design responsibility. Second, he said, CNES is prime contractor for the Ariane 6 launch installation, whose construction is beginning this year.

Finally, Le Gall said France’s Space Operations Law determines the rules for launches from French territory — including Europe’s spaceport, which is a French Overseas Department that is just as much a part of French territory as anywhere in metropolitan France.

Le Gall did not mention that ESA and France finance much of the spaceport’s operations and security, and contribute 100 million ($110 million) euros per year to balance Arianespace’s books.

Airbus Safran Launchers has used what it calls Arianespace’s “structural deficit” to argue that the sales price for CNES’s 35-percent stake should be minimal.

Le Gall said he supported the Airbus Safran Launchers share purchase as a way to move responsibility to industry and help streamline operations among the companies that build the Ariane rocket.

The Airbus Safran proposal to ESA for the Ariane 6 rocket’s development was submitted May 17. Incoming ESA Director-General Johann-Dietrich Woerner — he takes office July 1 — said the proposal was solid and responded to the agency’s requirements. It will be submitted July 16 to ESA’s check-writing body, the Industrial Policy Committee, for final approval.

Le Gall said the separate, CNES-managed contract for the Ariane 6 launch installation might take a little longer to conclude pending a decision on whether the new rocket is assembled vertically, like previous Ariane vehicles, or horizontally.

Woerner said there was little chance of a horizontal integration for Ariane 6 and no reason to think the CNES contract could not be signed at the same time as the rocket development contract in July.