Orbital Says It Has Selected Future Antares Engine, But Offers No Specifics

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PARIS — Rocket and satellite builder Orbital Sciences Corp. on Oct. 16 teased investors about the future of its Antares rocket program, saying the company had selected an Antares main-engine manufacturer for launches starting in 2017 but would not say who it is.

Many industry officials expect Orbital to use a solid-fueled motor built by ATK Aerospace and Defense of Magna, Utah, with which Orbital is merging in a deal scheduled to clear regulatory approval late this year or early next year. Orbital also had been considering two Russian suppliers, including the current main-engine provider, but a Russian choice given the current state of relations between Russia and the United States would carry risks, industry officials said.

In a conference call with investors, officials from Dulles, Virginia-based Orbital also said one of the company’s first two upgraded telecommunications satellite designs recently sold would employ electric propulsion for orbit raising.

The GeoStar-3 satellite line is a higher-power version of the company’s GeoStar-2 and puts Orbital in a position to compete in a broader market segment. The GeoStar-2 product delivers as many as 5 kilowatts of power to the payload; the GeoStar-3 is as many as 8 kilowatts.

Orbital Chief Executive David W. Thompson said both orders for the GeoStar-3 feature electric propulsion for satellite station-keeping, meaning small maneuvers throughout a satellite’s 15-year life to maintain it stably in its geostationary orbital slot.

One of the satellites also will employ electric propulsion to help raise it from its rocket drop-off point in transfer orbit into final geostationary position.

There are several electric-propulsion technologies, all sharing the advantage over chemical propellant of substantial weight savings — as much as 40 percent of a satellite’s weight — that can be used to purchase a lower-cost rocket or to add revenue-generating payload.

But electric propulsion’s lower thrust means it takes months to propel a satellite from its transfer orbit to its final station, compared with a couple of weeks for a satellite with chemical propellant.

Satellite fleet operators interested in electric propulsion are eyeing many combinations of chemical and electric propulsion as they assess the trade-off between weight savings and the early start of operations.

Thompson said Orbital is pricing the GeoStar-3 satellites so as to gain market traction for the new product and is willing to book lower profit margins as a result. “It’s going to take a couple of years” for the new satellite design to generate the same profit margin as the veteran GeoStar-2, he said.

Orbital sees its Antares rocket, now used to carry cargo to the international space station under a NASA contract, as having potential for other government customers and the commercial market as well.

The rocket’s first stage features a Russian engine that has been out of production for years. For Antares, the engine is refurbished to Orbital specifications by Aerojet Rocketdyne of Sacramento, California, and renamed the AJ-26. Aerojet has said it could restart engine production if Orbital made a big order.

Thompson said the company has settled on a long-term Antares engine solution, which as expected will give the vehicle “a little higher level of payload performance, which will be helpful in a variety of applications.”

He said the cost to modify Antares for the new engine “will occur over a couple of years” and will not be materially important to the company’s financial performance.

Thompson said Orbital has secured enough AJ-26 engines to cover Antares demand through mid-2017 in case of a schedule slip for the new engine.

Having said all that, Thompson declined to disclose the manufacturer or the engine, saying there is a large launch competition expected in the coming weeks and that Orbital does not want to show its hand before then.

Orbital has told investors that its eight-launch, $1.9 billion Commercial Resupply Services contract with NASA for space station cargo delivery would become more profitable as the company demonstrated the service and moved management reserves to the profit line once risks were eliminated.

That has begun to happen. Orbital Chief Financial Officer Garrett E. Pierce said during the conference call that the operating profit margin on the contract is now 6.25 percent compared with  5.5 percent a year ago. It likely will climb to around 7 percent in 2015, irrespective of any follow-on CRS contract, he said.

Thompson said Orbital would be submitting to NASA in November a proposal for cargo-supply missions starting in late 2017 or 2018 and continuing to 2024, when the station may be retired. NASA is expected to sign new supply contracts by mid-2015, he said.