Desire for Competitive Ariane 6 Nudges ESA Toward Compromise in Funding Dispute with Contractor
PARIS — European Space Agency governments knew in December, when they approved a multibillion-dollar investment in a new Ariane 6 rocket to meet the competition from SpaceX and others, that many unsettled contentious issues would surface one day.
That is happening now as prime contractor Airbus Safran Launchers and ESA prepare a late-June contract for Ariane 6 development that will fix in concrete many of the assumptions made when ESA ministers approved Ariane 6 funding.
One issue: How much of the 3.215 billion euros ($3.91 billion) in Ariane 6 rocket development costs will industry need to cover? ESA now says 400 million euros should be industry’s share.
Airbus Safran Launchers never agreed to that sum.
“Clearly 400 million is not peanuts,” ESA Launcher Director Gaele Winters said in a March 28 interview. “We have agreed with [Airbus Safran Launchers] to discuss the conditions.”
But in an illustration of how much remains unresolved in the new arrangement between ESA and the Ariane 6 prime contractor — an arrangement billed as one in which the company takes full control of Ariane 6 design and development and commits to a firm, fixed-price contract — Winters said ESA has an interest in the company not losing money on Ariane 6 development.
That view is shared by Johann-Dietrich Woerner, chairman of the German Aerospace Center — and more importantly, the incoming director-general of ESA. Woerner assumes his post July 1, succeeding the retiring Jean-Jacques Dordain.
In a March 31 interview, Woerner took a hard line on overall Ariane 6 costs, saying industry will not get any more than what was agreed to in December. But on the 400 million euros, he said ESA may have an interest in helping the prime contractor.
“I have told industry: SpaceX is maintaining its low prices and in Japan they are talking about cutting their launcher’s cost by 50 percent, so we better find a compromise,” Woerner said.
ESA has promised Airbus Safran Launchers that European governments will purchase five satellite launches per year, on average, starting when Ariane 6 is operational in 2020. These would be dedicated launches of the Ariane 62 rocket or an ESA payload sharing a ride with a commercial customer aboard the heavy-launch Ariane 64 variant.
For the commercial market, Airbus Safran Launchers is on its own. ESA has said it will no longer cover the annual losses incurred by launch service provider Arianespace of about 100 million euros per year.
Woerner said ESA’s goal is an Ariane 6 that can sustain itself, and earn a profit for its builders, through both the guaranteed government market and the vehicle’s success in winning commercial customers.
If Airbus Safran Launchers is forced to pay 400 million euros in Ariane 6 development, it will simply pass those charges on to its satellite customers, reducing the rocket’s competitiveness.
“Let’s say they want to recover their investment over five years, or 80 million [euros] per year,” Woerner said. “At 10 Ariane 6 launches per year, that’s 8 million euros per launch they’ll add onto the Ariane 6 price. That worries me, that the investment of industry is directly impacting the price structure, making Ariane 6 less competitive than it could be. So we have to discuss this. A savings of 8 million euros per launch would give us extra margin for the competition.”