Arianespace Chief Executive Stephane Israel, left, shakes hands with Airbus space division chief Francois Auque during an Ariane 5 bulk-order purchase witnessed by French President Francois Hollande, center, in December 2013. Credit: CNES

KOUROU, French Guiana – Europe’s Arianespace commercial launch company, which for 35 years has had a stable relationship to its industrial shareholders and government backers, is preparing for a major change in direction this fall as it becomes a 74-percent-owned subsidiary of Airbus Safran Launchers.

It remains unclear what changes will be made to the company. ASL officials have said they would keep the Arianespace brand name and allow it to continue to operate as a separate entity, with its own headquarters and branch offices.

But the pressure to reduce costs that is forcing an overhaul of Europe’s entire rocket industry will almost certainly affect Arianespace and its 313 employees. The key development is the coming of the new-generation Ariane 6 rocket, to replace Ariane 5 starting in 2020; and the Vega-C, an upgrade of the current Vega small-satellite launcher.

In a Jan. 28 interview here at Europe’s Guiana Space Center spaceport, Arianespace Chief Executive Stephane Israel outlined the milestones that, within a year, should result in an Arianespace version 2.0.

It starts with the European Commission’s approval of ASL’s purchase, for 150 million euros ($162 million), of the French government’s 35 percent Arianespace stake. That is expected to occur by March.

Next up is the negotiation between the European Space Agency (ESA) and ASL on final pricing for the Ariane 6 rocket, to fly starting in 2020. Once that Program Implementation Review is completed in September, Arianespace will begin marketing the Ariane 6 and the Vega-C rockets.

In addition, the company expects to conclude a memorandum of understanding with ESA, ASL, Vega prime contractor Avio and the French space agency, CNES, on how their relations will evolve as Ariane 6 and Vega-C are introduced.

“The evolution of our shareholder structure and the preparing the exploitation of Ariane 6 and Vega-C are going on in parallel with the competitiveness plan we’re implementing before the arrival of the new vehicles,” Israel said.

Israel has said the company wants to shave some 5 percent from the current cost of the Ariane 5 rocket to be able to pass the savings on to customers and better compete with SpaceX of the United States. The company has already dropped prices for lighter-weight satellites sitting in Ariane 5’s lower berth, where the competition with SpaceX has been the sharpest.

Israel said Arianespace expects to sign with ASL a final Ariane 5 batch order contract by the end of this year, an order large enough to supply customers through sometime in 2023 – three years after the first Ariane 6 — at which point Ariane 5 will be retired.

Arianespace will also sign, with Avio of Italy, a contract for Vega and Vega-C rockets late this year following the ESA review, he said.

Commercial satellite operators will be given the choice between Ariane 5 and Ariane 6 for launches between 2020 and 2023.

“I imagine that the price of the launchers will not be the same, but neither will their levels of maturity,” Israel said, noting that Ariane 6 is designed to be 40-50% less costly than Ariane 5.

“Launching with a rocket that by then will have close to 100 successful flights is not the same as a rocket just starting service,” Israel said. “By 2021 we should be at around the fifth Ariane 6 launch, which will be sold at a given price. Ariane 5 will have another price. Customers will make a choice.”

More immediately, Arianespace has an Ariane 5 flight manifest that is nearly – but not completely – booked to 2018. “We could accommodate maybe one or two slots in our upper position in 2017,” Israel said, referring to the berth for heavier telecommunications satellites. “For the lower position, it looks like there are no openings until 2018.”

The European Commission, which is the executive arm of the 28-nation European Union, is preparing a comprehensive space strategy, to be published by the end of the year. Commission and European Union officials have said they would like to focus more attention on launchers.

The French government now pays more than 50 percent of the costs of the Guiana Space Center. French officials have suggested that the commission should consider paying a share of the costs of what the commission sees as a critical European infrastructure, and one that assures European space autonomy.

The spaceport, located on French territory on the northeast coast of South America, is also classed as an “ultra-peripheral region” eligible for European Regional Development Fund backing, a commission program to redress regional economic imbalances.

The European has also become the biggest single customer for Arianespace.

“I cannot say whether the European Commission will invest in the facility here,” Israel said. “But there are lots of reasons to do so, and there is not much risk of cost overrun. This is not a new development and there is not much risk of bad surprises. There are lots of reasons for the commission to become a financial sponsor.”

Peter B. de Selding was the Paris bureau chief for SpaceNews.