Jean-Yves Le Gall, Chairman and Chief Executive, Arianespace

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The Arianespace commercial launch consortium’s 30-year history as a one-product company operating successive generations of Ariane rockets is coming to an end as Europe adds Russia’s Soyuz vehicle and the new Italian-led Vega small-satellite launcher to its stable of rockets.

The consequences for Evry, France-based Arianespace of the changed business model will be multiple. The company promises European Space Agency (ESA) governments to realize sufficient economies of scale to reduce the per-launch fixed costs at the Guiana Space Center in French Guiana, on the northeast coast of South America.

Arianespace is maintaining, for now, its Starsem affiliate, which markets Soyuz launches from Russia’s Baikonur Cosmodrome in Kazakhstan, meaning the company soon will be overseeing 10 to 12 launches per year, compared with six to eight currently.

Arianespace Chairman and Chief Executive Jean-Yves Le Gall discussed the company’s new operating regime with Space News staff writer Peter B. de Selding.

 

Satellite delays in 2011 meant you could only launch five Ariane 5s, not six as foreseen. What is the effect on your financial performance for the year?

It’s true we could only perform five Ariane 5 campaigns. But we were able to conduct two Soyuz missions from French Guiana, in October and December — a feat many people said we would not accomplish. In addition, we conducted two Soyuz missions from the Baikonur Cosmodrome, both for Globalstar. Preliminary indications are that we will reach financial equilibrium for 2011.

 

Is it fair to say that the euro’s decline against the U.S. dollar was a help in 2011?

I would need to examine the details of our exchange-rate covers, but yes, in principle, the euro/dollar exchange rate in 2011 has been favorable to us.

 

Your Dec. 28 Soyuz launch from Russia’s Baikonur Cosmodrome in Kazakhstan is the third of a planned four launches to place Globalstar’s second-generation mobile communications constellation into orbit. Globalstar is going through a difficult period financially. How are your relations with them, and when will the fourth and final launch occur?

Our relations with our Globalstar customer are fine, and there are no outstanding issues. Our Soyuz manifest will permit us to conduct the fourth launch whenever Globalstar says it is ready. As of now it looks like this will occur in the spring.

 

Sea Launch, one of your competitors, returned to flight in 2011 after going through Chapter 11 bankruptcy proceedings, and is now pretty much debt-free. How do you view this development?

It is good to see them return to flight. I understand that they are trying to raise fresh capital. But in 2011, we did not confront them very often in competitions for new contracts. They are focused on working off their current backlog.

 

International Launch Services (ILS) and the Russian Proton rocket has been your biggest direct competitor. How is that competition evolving in terms of launch prices?

Prices continue to rise. I recall just a few years ago Proton commercial prices as low as $50 million or so. Now prices start around $100 million. So market prices are increasing. Everyone knows that the Proton rocket is a fully qualified vehicle, but it has suffered five failures in the past six years, each one relating to a problem in production.

 

The Soyuz rocket, a version of which you operate, also is well proven but had two failures in 2011. Your Ariane 5 has logged 46 consecutive successes, but don’t you have to accept that one day it will fail again?

We have had no failures on Soyuz missions operated by Starsem, our affiliate with Russia that operates Soyuz from Baikonur. We have added multiple quality reviews to avoid failures. I do not accept the logic that says we must accept a failure at some point in the future. It is a constant effort to validate system parameters. We undertake this on a weekly basis for Ariane 5 and will be doing the same thing for Soyuz operations in French Guiana. These weekly meetings allow you to identify issues and solve problems. For Ariane 5 we have been holding these sessions since 2005. We had our 253rd meeting on Dec. 20.

 

These are to review past launches?

Yes, and also to look at our launch manifest for the next three years. We don’t do this by ourselves, but with our contractors. It will be the same thing for Soyuz, with the meetings being attended by TsSKB-Progress, or the Samara Space Center, Soyuz’s prime contractor; Lavochkin, the builder of the Fregat upper stage; and the Russian space agency, Roscosmos. This is how we find problems and solve them. And once on the launch pad, we do not hesitate to cancel a launch if there is a suspected anomaly. This is occasionally expensive, but you have seen us do this on multiple occasions.

 

When is the third Soyuz launch from French Guiana scheduled?

This will occur this summer, and will be of two Galileo navigation satellites for the European Union. We also have the fourth Globalstar launch from Baikonur planned, and the launch of the Metop-B polar-orbiting meteorological satellite, for the Eumetsat organization of Europe, which will also be from Baikonur. That takes us through the first six months of the year. The precise manifest after that is a bit less clear.

 

The Vega small-satellite launcher’s inaugural flight from French Guiana has been delayed multiple times. How confident are you that it will launch in early 2012?

We really are on the home stretch on this. A launch in February looks likely.

 

You recently signed contracts with the European Space Agency (ESA) to launch two Sentinel Earth observation satellites aboard Vega between 2014 and 2016 as part of Europe’s Global Monitoring for Environment and Security (GMES) program. GMES financing is unsettled. Do you have any concerns about the launches?

No. I am sure we will be launching the Sentinels. This is a peculiarity in Europe, where you have these kinds of debates over programs — in this case, a program that European governments have said they support fully.

 

The two commercial Vega launch contracts you signed are not part of the five Vega flights ESA has already booked?

No, they are not. We have the inaugural Vega flight, with the Lares satellite and several microsatellites. Following that are the five launches booked by ESA under the Vega Research and Technology Attainment contract. Then begin the commercial launches, including the Sentinels.

 

So starting this spring, you will be operating three vehicles from the Guiana Space Center. Will this mean higher annual operating costs?

What we are saying now is that operating costs per launch will drop by about 20 percent once we have the three vehicles operational.

 

How does this occur?

By using the synergies inherent in operating three vehicles instead of one. Look at 2011: Our last Ariane 5 launch was in September, with the next not scheduled until March. But instead of having our teams idle, we launched the first two Soyuz missions from French Guiana. We can spread the fixed costs of the Guiana Space Center over three vehicles, and this is where we get the savings.

 

You are receiving about 120 million euros ($160 million) a year from ESA to offset your fixed costs. ESA governments will set a new support level late this year. Do you expect any controversy about this?

No, I think ESA member states fully understand our system. We had a kind of due diligence performed in 2010 and 2011 and no one can now claim they don’t know what our cost and revenue picture is. Our system is transparent to ESA and to the ESA delegations.

 

There is a debate in Europe about whether money should be invested in a mid-life upgrade of Ariane 5, or devoted to a post-Ariane 5 rocket. Given your sense of where the market is going, which is the preferable choice if money is not available to invest in both?

This is a political question that is up to ESA’s member states to decide. Choices will need to be made as we cannot be a universal system satisfying all requirements.

 

Are you saying that if 100 engineers with knowledge of the commercial launch market were asked to decide the issue without regard to politics or industrial policy, it’s not obvious what they would decide?

It’s not obvious, no. It really depends on a lot of factors. If it were a black-and-white decision, it would be easier. But it’s not. It’s a political decision and I mean that in the noble sense of the term.