News from Satellite 2014 | Lockheed Offers ‘Refund or Reflight’ Guarantee on non-U.S. Government Atlas 5 Launches

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WASHINGTON — Lockheed Martin opened a two-pronged attack on the commercial market on March 11, announcing a free reflight or refund for non-U.S. government customers of its Atlas 5 rocket in the event of a launch failure and an overhaul of its satellite production line to better appeal to the commercial market.

Bethesda, Md.-based Lockheed said the Atlas 5, whose reliability is beyond dispute but whose price is beyond the reach of most commercial satellite fleet operators, would immediately bundle a “refund or reflight” guarantee into all of its future Atlas 5 contracts for non-U.S. government customers.

Robert L. Cleave, president of Lockheed Martin Commercial Launch Services, said the guarantee is Lockheed’s way of demonstrating its faith in the Atlas 5, which has a demonstrated record of success over the years even as the vehicle has virtually disappeared from the non-U.S. government market.

Addressing the Satellite 2014 conference here, Cleave made no promises about possible price reductions for Atlas 5, which industry officials say is priced at up to 30 percent above prevailing commercial rates, depending on satellite size.

But the refund/reflight offer will allow customers to forgo seeking insurance for the launch portion of their contracts. They would still need to purchase coverage for the value of their satellite hardware, however.

Satellite insurance rates have come down in the past five years and are now considered low by historical standards.

Lockheed Martin’s A2100 satellite platform until recently was a regular feature on the commercial telecommunications satellite landscape. The platform continued to win a bid every year or so, especially in East Asia. But recently Lockheed lost the support of Japan’s Sky Perfect JSat Corp., which had been a regular Lockheed satellite customer.

Michael Hamel, president of commercial ventures for Denver-based Lockheed Space Systems Co., said the company is using its broader corporate reorganization, which includes the closing of the Newtown, Pa., satellite production plant and its consolidation into the Denver operation, to rethink how the A2100 is built.

In an interview, Hamel said the company’s goal is to reduce the cost of the A2100 by 35 percent and its average production time by 25 percent.

“We’re doing a complete technical refresh on the product, including structure, propulsion and power systems,” Hamel said. “We’re about halfway through it.”

The objective is not only to make the A2100 more appealing to commercial customers but also to inject commercial practices into the way the company builds satellites for government customers. He said the A2100, whose design permits it to be assembled into configurations providing power options of between 7 and 20-plus kilowatts.

Hamel said commercial market success might be viewed as “the canary in the coal mine,” insofar as it is an indication of where the company is competitively — information that could benefit commercial and government programs.

Hamel said his division has been given the resources to win business internationally.