EADS Astrium Chief Executive Antoine Bouvier denied that his company is selling below cost to enter the small-satellite Earth observation market, and said EADS Astrium has booked 12 orders for the same platform line and already is achieving economies of scale.
Responding to comments made by Sir Martin Sweeting, chief executive of Surrey Satellite Technology Ltd. (SSTL) of Guildford, England, Bouvier said it is untrue that his company’s win of a two-satellite order from the Algerian government was based on a below-cost bid. EADS Astrium bested in the competition for two relatively high-resolution satellites weighing 130 kilograms each at launch.
This weight class of satellites had been SSTL-dominated territory until EADS Astrium adopted the Myriade satellite frame developed by the French space agency, CNES. Myriade first flew in 2004 in CNES’s Demeter Earth observation mission.
Since the Demeter launch , five other Myriade-based spacecraft have been placed into low Earth orbit, including Parasol, built by CNES, and the four EADS Astrium-built Essaim electronic eavesdropping satellites launched in December for the French arms procurement agency, DGA.
DGA has ordered two Myriade-based platforms from EADS Astrium for the Spirale infrared missile warning satellites, and in February ordered four more as part of its Elint radar-detection demonstrator program. DGA has budgeted 170 million euros ($202 million) for Elint, including launch and in-orbit operations.
The 11th and 12th Myriade orders for EADS Astrium are part of the Algerian National Space Technology Center’s Alsat-2 program. Alsat-1 is an SSTL-designed satellite launched in 2002.
The Alsat-2 satellites will each have a ground resolution of about 2.5 meters in black-and-white mode — 10 meters in four-band multispectral mode — and will be equipped with 64-gigabyte on board memories.
“With 12 satellites from this product line now ordered, we can begin to talk about a production series in which we can realize economies,” Bouvier said in a March 14 interview. “It is absolutely false to say we are selling at a loss, and it is not true that our bid was selected only because of a political accord on cooperation between CNES and the Algerian side. The bid was judged on its own merits for price and technical quality. The CNES [memorandum of understanding] was judged separately.”
The Alsat-2 program was tied to a broader cooperation accord in the form of a memorandum of understanding between the Algerian and French space agencies. Sweeting said SSTL was unable to persuade Britain’s space agency to agree to a similar cooperation deal.
Bouvier said EADS Astrium views SSTL as a pioneer in proving to many small nations that they can afford Earth observation satellites. He said these nations’ appetites for Earth observation satellites are stimulated by their SSTL experience. When they want a more operational product, he said, EADS Astrium will be there.
In addition to Algeria, SSTL has built satellites for institutions in Chile, China, Malaysia, Nigeria, Portugal, South Korea, Thailand and Turkey. The company also has provided satellites for veteran space faring nations and the military forces of Britain, France and the United States.
SSTL is moving toward more operational satellites.
Sweeting, whose company has built 26 satellites since the early 1980s, speculated that a large company like EADS Astrium would not be a long-term player in the small-satellite market because its cost basis is necessarily higher than that of a university-affiliated outfit like SSTL. SSTL is located at, and 80-percent owned by, the University of Surrey.
But Bouvier said the success of the Myriade platform and his company’s ability to reduce unit costs with each new order will permit EADS Astrium to carve out a long-term position in the market.
SSTL has about 200 employees and annual sales of 25 million British pounds ($43 million). EADS Astrium had sales of about $1.5 billion in 2005, and has about 6,800 employees in France, Germany, Britain and Spain. It is 100-percent owned by EADS N.V. of Amsterdam, The Netherlands, Europe’s largest aerospace group.