Arianespace Reports Slight Loss for 2013, Girds for Busy 2014

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PARIS — Europe’s Arianespace launch consortium expects to report a “slight loss” for 2013 following a revenue drop of some 27 percent compared with 2012 as a result of lower-than-planned launch activity, Arianespace Chief Executive Stephane Israel said Jan. 7.

The Evry, France-based company said it had set aside sufficient reserves to cover most of the loss and will not need to request a fresh cash injection from its shareholders, a group made up mainly of Ariane 5 rocket contractors and the French space agency, CNES.

Addressing a press briefing here, Israel said the precipitous drop in top-line revenue did not result in a similarly large operating loss, in part because the company avoided certain expenses it would have incurred had it launched more often.

Also helping Arianespace avoid a larger loss is a scheduled cash payment of 100 million euros ($135 million) from the 20-nation European Space Agency (ESA). ESA governments pay Arianespace each year predetermined sums to enable the company to maintain financial viability and to offset operating costs.

The payments are typically organized into two-year increments. The latest increment, decided in late 2012 by ESA governments, totals 200 million euros divided evenly between 2013 and 2014.

Arianespace is allowed to divide the ESA financing between the two years as it sees fit, but company officials said they would limit dipping into the ESA pot to the planned 100 million euros for 2013.

Israel said Arianespace plans to conduct up to 14 launches this year of its three rockets — the heavy-lift Ariane 5, the medium-lift Soyuz and the light Vega. Israel said the 14-launch target may not be met, but added that the company is all but certain to break its previous calendar-year record of 10 launches, set in 2012.

As is always the case, the Arianespace plans depend on the rockets and their satellite payloads being ready on time. Two Ariane 5 campaigns and three Soyuz launches in 2013 were delayed, all but one to 2014, because of late-arriving satellites. 

These delays limited the company’s 2013 activity at Europe’s Guiana Space Center in South America to four Ariane 5 launches, two Soyuz campaigns and one Vega launch.

Israel said the company still expects to launch two Ariane 5 rockets — each carrying two telecommunications satellites — in February despite a Dec. 20 incident at the spaceport that damaged the nozzle of the vehicle’s upper-stage HM7B engine.

The damage was caused when an instrument designed to keep the engine pressurized during a planned two-week suspension of activity during the year-end holidays fell from its position and banged into the nozzle.

The damage was so slight that Arianespace and its contractors — motor-maker Snecma and Ariane 5 prime contractor Airbus Defence and Space — initially thought the first of those launches could proceed as scheduled Jan. 23.

Further analysis concluded that the nozzle should be replaced. The launch is now scheduled for early February.

Because of the reduced launch activity in 2013, Arianespace is likely to report revenue of around 960 million euros for 2013, down 27 percent from 2012.

But if the company was less active in launching, it reported a record year in orders, booking 15 satellites for Ariane 5 launches as well as a late-year booking for two commercial Vega launches.

The 1.4 billion euros in new orders in 2013 brought the company’s total backlog to 4.3 billion euros, Israel said.

ESA governments plan to meet in December in Luxembourg to determine whether to pursue joint development of an upgraded Ariane 5, called Ariane 5 ME, and a new-generation Ariane 6 rocket.

During this meeting, a fresh two-year operations-cost reimbursement package for Arianespace will be decided.

Israel said the company will be asking ESA governments to consider tailoring their financial assistance to account for exchange-rate fluctuations. With the euro now trading at about $1.35, Israel said, the company is at a disadvantage compared to competitors, all of which are based in nations with lower-valued currencies.

Ariane 5 contractors have promised that — under certain conditions — they would be able to do without the annual operating-cost reimbursements if ESA governments approve full development of the Ariane 5 ME vehicle.

Israel said Ariane 5 ME, which could be operational in 2018, appears well suited to the advent of all-electric-propulsion satellites, a design change that likely will result in more satellites in the middle range in terms of launch mass  — between 4,000 and 5,000 kilograms.

Ariane 5 ME is designed to carry two satellites weighing a combined 11,000 kilograms into geostationary transfer orbit, a performance that would be higher but for ESA’s and France’s commitment that the upper stage will be deorbited after each mission to prevent orbital debris. Deorbiting the stage requires power that might otherwise be used to lift heavier payloads.

 

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