Eighteen commercial launch contracts for telecommunications satellites were signed by the world’s principal launch-service providers in 2005 — just one more than the total for 2004. But the likelihood is that 2006 will be a better year given the number of satellites now under construction. In addition, commercial launch prices continued to move up in 2005 from the lows reached during the intense competition in 2002-2003, according to industry officials.
Space News’ annual comparison of how each company performed in the commercial marketplace where contracts were competed does not include the companies’ government business. It nonetheless remains true that for all but one launch provider — Sea Launch LLC — government launches continue to be the lifesaving core market given the industry’s overcapacity and the state of the global commercial business.
“Any picture of the health of the industry would have to take into account the government launches,” said Mark Albrecht, president of International Launch Services (ILS) of McLean, Va., the commercial launch arm of Lockheed Martin and Khrunichev of Russia.
ILS booked three U.S. government orders in 2005 in addition to its four commercial contracts, and the company’s Proton vehicle can count on the Russian government as its most regular customer. Competitor Arianespace of Evry, France, in 2005 signed one government contract for the Ariane 5 vehicle in addition to the five commercial contracts listed in this year’s rankings.
Long Beach, Calif.-based Sea Launch, a Boeing Co. affiliate, is considered neither a U.S. nor a Russian or Ukrainian launcher for government-contract purposes and must survive on almost exclusively commercial business.
In 2005, that business model did not appear to suffer as Sea Launch booked eight contracts, including two for the Land Launch version of its Zenit 3SL vehicle. Land Launch, whose maiden flight is set for 2007, operates from Russia’s Baikonur Cosmodrome in Kazakhstan, while the Sea Launch version is launched from an oceangoing platform on the equator in the Pacific Ocean.
Sea Launch President Jim Maser said 30-40 percent of the bids Sea Launch now is competing to win would fit in the Land Launch category, which is satellites weighing 3,500 kilograms or less.
“This appears to be a tangible market, between 3,000 and 4,000 kilograms,” Maser said in a Jan. 5 interview, adding that the Land Launch capacity could be extended if Sea Launch proceeds with a planned upgrade of its Zenit 3SL vehicle, which would permit it to carry up to 6,300 kilograms of satellite payload into geostationary transfer orbit from the mid-ocean site. The same vehicle operating from Baikonur would be able to lift only around 3,800 kilograms into the same orbit.
As is often the case, defining commercial contracts in a given year is less than straightforward. Companies do no t always announce their contracts; some contracts move from vehicle to vehicle for schedule reasons; and some contracts are less firm than others.
An example is the Koreasat 5 satellite contract won by Sea Launch. The contract itself was signed before 2005 but ran into difficulties owing to Russian export rules relating to satellites that, like Koreasat 5, have military as well as commercial payloads. The licensing and related financial issues between KT Corp. of South Korea, Sea Launch and Russia’s Rosoboron export agency were not resolved until 2005.
For launch-service providers, the good news is that despite the acknowledged overcapacity in the market, average commercial launch prices have risen in the past year. Arianespace Chief Executive Jean-Yves Le Gall said prices have climbed by 30 to 40 percent in the past three years.
“Some [launch-service] companies panicked and started a price war, but this has calmed down recently,” Le Gall said during a Jan. 4 press conference.
While ILS, Sea Launch and Arianespace currently control most of the commercial launch services market, China Great Wall Industry Corp. is waiting to re-enter the business. The Chinese Long March launch vehicle has been barred from serving the international launch market by virtue of the fact that the U.S. State Department will not issue licenses that allow U.S. manufacturers, U.S. satellites or components from making the trip to China.
In 2005 China Great Wall booked an export order with the Nigerian government for a satellite that Chinese organizations will build — one way of getting around the U.S. government ban.
India’s GSLV rocket also is poised to enter the market, and Japan’s H-2A vehicle is aiming to establish itself commercially as well.