Astrium Chief Presses His Case for New Ariane 5 Upper Stage

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PARIS — European governments will be able to cease their annual payments of $150 million or more to balance the books of the Arianespace commercial launch consortium if they agree this year to spend $1.5 billion on a new upper stage for the heavy-lift Ariane 5 rocket, the chief executive of Europe’s Astrium space company, Francois Auque, said Jan. 19.

Assuming no dramatic launch failures or downturns in the U.S. dollar’s value relative to the euro, European Space Agency (ESA) governments should be able to stop the annual payments around 2019, Auque said.

He also said Astrium’s bid, with Thales Alenia Space, for a contract to build six Galileo navigation satellites against incumbent OHB AG should be considered as “proof of our sporting nature” given the advantages OHB has in the competition. A winner is expected to be decided in February.

In a press briefing here on Astrium’s 2011 results and its outlook for 2012, Auque made an occasionally impassioned defense of the Ariane 5 Mid-life Evolution (ME) program, which ESA government ministers will review in November.

While they agreed to start development of the Ariane 5 ME in 2008, ESA governments withheld full development funding until their next meeting, which had been scheduled for late 2011.

In the intervening four years, some European officials have suggested that with money so tight now in Europe, it may be preferable to start work immediately on an Ariane 5 successor rocket, which according to early designs should be more flexible, and less expensive, to operate.

For Auque, whose Astrium Space Transportation division is counting on Ariane 5 ME to keep its design office busy, such talk is heresy. He said it would be “criminal — and I am weighing my words,” to decide against Ariane 5 ME. He said future employment levels at Astrium’s Les Mureaux, France, and Bremen, Germany, design offices “are totally dependent on ME.”

ESA is now canvassing satellite owners — not rocket builders — in Europe to determine how these mainly government agencies view their future demand for scientific, Earth observation, military telecommunications and other satellites.

Auque said such a survey is all very well, but that ESA “needs to decide what it wants. I have no idea today what a next-generation launcher will look like. No one does. I don’t understand this kind of reasoning, especially since 50 percent of Ariane 5 ME development will be applicable to a next-generation launcher, no matter what it is.”

To help stabilize Evry, France-based Arianespace’s finances, ESA governments have agreed to pay up to 120 million euros ($156 million) a year in 2011 and 2012 to offset certain fixed costs of maintaining the Ariane 5 rocket operational.

The November meeting of ESA governments is expected to extend these payments beyond 2012.

While he offered no guarantees, Auque held out the promise of eliminating this annual charge from ESA’s budget once Ariane 5 ME is in operation.

Ariane 5 ME is mainly a new upper stage that features a restartable engine and offers a 20 percent increase in Ariane 5’s payload-carrying power to geostationary transfer orbit, the usual destination of the commercial telecommunications satellites that provide most Arianespace revenue.

With Arianespace’s current revenue averaging about 1 billion euros per year, Auque said, the 20 percent power increase should be seen as having a potential value of 200 million euros.

He said this increased revenue is more than enough to render unnecessary the continued ESA annual fixed-cost compensation, enabling ESA to invest that money in research and development or some other area.

Auque conceded that his reasoning assumes Arianespace will systematically fill each Ariane 5 ME vehicle with satellites, an optimistic assumption.

The Astrium Satellites division is awaiting a February decision by ESA and the European Commission — the executive arm of the 27-nation European Union — on a contract for six Galileo positioning, navigation and timing satellites.

Astrium and partner Thales Alenia Space are bidding for the work against a team led by OHB AG of Bremen, Germany, and Surrey Satellite Technology Ltd. (SSTL) of Britain — which is owned by Astrium.

OHB bested Astrium for the contract to build the first 14 Galileo satellites, whose deliveries will begin late this year.

Given the limited budget the European Commission has for the fresh batch of satellites, and the advantage OHB has because of its experience in building the first 14 spacecraft, Astrium, Auque said, will be forced to include nonrecurring engineering charges in its bid — charges that OHB has already incurred in building the 14 Galileo spacecraft.

Auque said Astrium’s loss of the 14-satellite order was a blow to the company’s pride but a boon to the company’s profitability. Astrium’s work, through SSTL, in building the OHB satellites’ payloads is more profitable, he said, than being prime contractor for the satellites.

OHB officials have said they, too, are suffering disadvantages in the Galileo competition because the European Commission’s dual-source policy gives Astrium an advantage.

 

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