Atlas Price Cut Helps Orbital ATK Shake Off Antares Failure

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PARIS — Satellite and rocket builder Orbital ATK on Oct. 27 said it had already benefited from price cuts to the United Launch Alliance Atlas 5 rocket in its contract for a March 2016 launch of Orbital’s Cygnus space station cargo transporter.

Orbital Chief Executive David W. Thompson declined to detail the reductions the company was able to secure for the launch but said ULA’s announced effort to bring Atlas 5 prices down from $150 million to something closer to $100 million was confirmed with the new contract.

Centennial, Colorado-based ULA is “serious about getting Atlas down to [those] levels. … We certainly saw some of that” in booking the March 2016 flight, Thompson said in a conference call with investors.

Orbital’s own Antares rocket is recovering from an October 2014 failure that destroyed a Cygnus freighter and its space station cargo and caused damage to the Wallops Island, Virginia, launch complex.

Orbital has since switched suppliers of its Antares main-stage engine — from one Russian source to another Russian source — and expects the re-engined vehicle to conduct a test firing in January at Wallops, with a first flight in May.

To keep up with the requirements of its NASA space station resupply contract, Orbital was obliged to find an alternate launcher and ultimately settled on Atlas.

The first of two Atlas 5 flights for Orbital from Cape Canaveral Air Force Station, Florida, is scheduled for Dec. 3. The second, which Thompson said recently became available on the ULA manifest, is slated for mid-March, giving Orbital extra time to prepare the new-version Antares and complete the Wallops facility repairs.

Thompson said Antares would launch Cygnus missions in May and then again in September or October. With these four missions — two Atlas 5 and two Antares vehicles — the company will have about completed the requirements of its original Cargo Resupply Services (CRS) contract with NASA.

Under the $1.9 billion contract, Orbital is responsible for delivering 20,000 kilograms of supplies to the International Space Station. The original contract was subsequently extended, adding three more missions to the Antares manifest, to occur in 2017 and 2018.

Dulles, Virginia-based Orbital is also among those competing for NASA’s CRS-2 contract, which is scheduled to be awarded in November. In the conference call, Thompson said the company’s financial forecasts assume it wins CRS-2 business.

A dispute between Orbital and Aerojet Rocketdyne over whether Antares’ original AJ26 engines — Russian-built but refurbished under Aerojet management — caused the October failure has apparently been resolved in favor of Orbital.

While no failure review report has been published, Aerojet paid Orbital $50 million to resolve the dispute, Orbital Chief Financial Officer Garrett E. Pierce said. Orbital has abandoned the AJ26 engines in favor of Russian RD-181 engines.

Antares Orb-3 explosion
An Antares rocket explodes seconds after liftoff from Wallops Island, Virginia. Credit: NASA

ULA is under a U.S. congressional deadline to stop using the RD-180 engine to power the Atlas 5 main stage for U.S. military and classified missions. The ban does not affect civil and commercial Atlas 5 launches, and in its current form would not affect Antares’ use of Russian engines to perform commercial space station resupply for NASA.

Pierce said during the conference call that the Aerojet payment, plus the refurbishment progress at the Wallops spaceport, has helped increase the profitability of Orbital’s CRS contract. Thompson specifically said the use of Atlas 5 instead of Antares has not reduced — nor has it increased — the overall profitability of CRS for Orbital.

Because of the way the CRS contract is structured, Orbital has suffered almost no losses as a result of the failure. Even switching from its own rocket to a third-party supplier for launch services — and Atlas 5 is not a low-cost rocket — has not eroded CRS’s profitability for Orbital.

One reason is that Atlas 5 is able to carry more supplies to the International Space Station than Antares, in effect reducing the total number of launches that would have been needed to fulfill the contract terms if only Antares had been used. In addition, NASA paid Orbital most of what had been due for the October 2014 launch despite the failure in the form of milestone payments — including a payment triggered at the rocket’s ignition, just seconds before the failure.

Thompson said Orbital lost a commercial telecommunications contract this year in part because it was unable to offer loan guarantees though the U.S. Export-Import Bank, which has been closed for new business since July 1.

In October the company won a new satellite order from an existing customer that exercised an option for an additional spacecraft, Thompson said. He declined to name the customer.

Orbital Chief Operating Officer Blake E. Larson said during the call that the two Orbital-built U.S. Air Force Geostationary Space Situational Awareness Program (GSSAP) satellites, launched in mid-2014, had recently been cleared for service after “excellent performance to date.”

The satellites are designed to perform proximity operations in the geostationary arc 36,000 kilometers over the equator, which is where most telecommunications satellites operate.

How close the GSSAP satellites will operate to telecommunications satellites operating in their regulated orbital positions — and whether the Air Force will inform these owners of a GSSAP satellite’s approach — is unclear.