Orbital Evaluating Three Bids for Antares Engine; Says Amazonas 4A Glitch Is Permanent

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PARIS — Satellite and rocket builder Orbital Sciences Corp. on April 17 said the electrical failure on the Orbital-built Amazonas 4A satellite launched in March appears likely to result in a permanent reduction in the satellite’s capacity but that there is no risk of similar failures on other satellites in orbit or in production.

The company also said it is evaluating three bids — two Russian, one U.S. — to produce main-stage engines for Orbital’s Antares rocket. The engines being offered include the Russian-built, U.S.-modified engine currently used for Antares.

In a conference call with investors, Orbital Chief Executive David W. Thompson said his company has a sufficient supply of the current Russian-built engines for three more years of Antares operations. Orbital has three Antares first-stage structures, built by a Ukrainian manufacturer, at an Orbital facility, with two more to be shipped soon.

Dulles, Va.-based Orbital has been hunting for an alternative engine supplier in part because the current Russian manufacturer, NK Engines,would need to restart long-ceased production activities to maintain a supply for Antares beyond the next few years. The engines are imported to the United States by Aerojet Rocketdyne of Sacramento, Calif., refurbished and sold to Orbital as the AJ26.

Thompson said it would take another two or three months to decide on a winning bidder, but that both the alternatives to the current supplier “may be preferable to continuing with our current engines.”

Once the decision is made, he said, Orbital will conclude a block purchase of engines to cover Antares launches between 2017 and 2020. Thompson said he has made clear to all three bidders that they will have to absorb any nonrecurring engineering costs associated with filling the order and then recover those costs over time through engine orders.

Orbital’s own costs associated with a switch in suppliers likely would not exceed $30 million, he said.

One factor weighing on the decision is whether either of the two alternatives to the current supplier would require a demonstration flight before proceeding with Orbital’s contract with NASA to resupply the international space station.

Thompson said Orbital expects that its current Commercial Resupply Services (CRS) contract with NASA will be expanded as NASA increases the amount of cargo it wants sent to the orbiting complex in the next three to four years. He said this new cargo requirement could add between two and four more Antares flights to Orbital’s flight manifest, for a total of 10-12 Antares CRS missions.

A CRS 2 contract, which is also expected given the U.S. decision to extend the station’s life by four years, to 2024, is not anticipated before 2015, Thompson said.

The Amazonas 4A satellite, meanwhile, was launched in March aboard a European Ariane 5 ECA rocket and is owned by commercial fleet operator Hispasat of Spain. Thompson said in early April the satellite suffered a failure in a power subsystem.

Hispasat and Orbital continue to evaluate the issue but both companies have made statements suggesting that the anomaly is permanent and will reduce the broadcasting capacity of the satellite’s Ku-band payload.

Thompson said the investigation is focusing on two possible causes of the problem. In both cases, he said, the issue is isolated to Amazonas 4A and will not affect any other Orbital-built satellites in orbit or in production.

One of the failure scenarios “had to do with something that was specific to the Amazonas 4A, that is not done on any prior satellite or any satellite in production,” Thompson said.

“The other failure mode is focused on a component that we have used many times in the past — at least 50 of these have been used by us over the last 10-12 years.” Thompson said. “It probably comes down to a combination of unit-to-unit variability compounded by certain peculiar aspects of this particular satellite.”

For reasons unrelated to Amazonas 4A, Orbital is no longer using this component design.

Orbital Chief Financial Officer Garrett E. Pierce said during the conference call that the company’s revenue for the three months ending March 31 was down $13 million from forecasts because of the Amazonas 4A issue. Operating income was down $6.4 million in the period because of Amazonas 4A and the likely loss of future orbital incentive payments from Hispasat.

Satellite owners commonly withhold about 10 percent of what they agreed to pay for a satellite pending successful operations in orbit. These payments are made annually, with interest, throughout the satellite’s scheduled 15-year operating life.

Pierce said Orbital had taken out insurance against the potential loss of its incentive payments, and that a claim for full recovery of the $6.4 million, and “possibly more,” should be received by June.

Thompson said he remains optimistic that an option for another satellite order from Hispasat would be exercised despite the Amazonas 4A issue.

“The likely cause of this problem is such that it should not put a cloud over their decision on moving forward with that option,” Thompson said.

 

Follow Peter on Twitter: @pbdes


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