Former Officials Urge ‘Radical’ Overhaul of European Launch Industry

by

PARIS — A group of former high-ranking European government and industry officials wants European governments to levy an annual tax on commercial satellite operators and abolish the Arianespace launch consortium in its current form to help keep Europe’s launcher industry solvent.

The group says Europe’s launcher sector, which depends on commercial revenue more than any other government-backed rocket industry, cannot survive without a radical reorganization that ultimately includes building a single rocket to serve medium- and heavy-lift requirements. The vehicle would succeed today’s heavy-lift Ariane 5 rocket and would also replace the European version of Russia’s Soyuz vehicle, which will operate from Europe’s spaceport starting in 2011.

The 12-member group, established by the Space Commission of the Toulouse, France-based Air and Space Academy, says building a single rocket that could be adapted to launch commercial telecommunications satellites and Europe’s still-rare government missions may not be enough to secure financial equilibrium for Europe’s launcher sector.

It is therefore proposing measures that the working group’s president, Fredrik Engstrom, a former director of launchers at the 18-nation European Space Agency (ESA), conceded are “radical.”

Among them is that European governments should impose an annual levy of around 3 million euros ($4 million) on commercial satellite fleet operators for each satellite that is stationed at a European-registered orbital slot. The proceeds, totaling around 100 million euros per year, would be put into a fund to be drawn down in those years when launch service revenue does not match operating and maintenance costs.

The report says such a fee, which could be collected by ESA and dispersed under clearly defined procedures, likely would require specific legal steps to be put into effect. Satellite operators, it says, benefit from the existence of a viable European launch service provider even when they do not elect to use it. By its presence in the market, the Evry, France-based Arianespace consortium prevents other rocket suppliers from increasing costs.

“Operators are guaranteed to have a reliable launcher at their disposal at any time,” the report says, adding that launch costs are equivalent to no more than 2 percent to 3 percent of a commercial operator’s annual revenue. “The existence of a European [launch] capability ensures that there is a competitive international launch market, putting them [satellite operators] in a strong negotiating position.”

Informed of the proposal, the European Satellite Operators Association said it would have no comment on the academy’s report.

Generating an additional 100 million euros may not be enough, the report says, even if the modular vehicle it prescribes is built and in operation around 2025.

Scrapping the current industrial and political organization centered on Arianespace may also be necessary, it says. Arianespace “lacks the financial capabilities to face the normal risks of commercialization,” and suffers from an insufficient involvement by ESA member governments, and the executive commission of the 27-nation European Union.

Placing a smaller Arianespace inside Astrium Space Transportation, the Ariane 5 prime contractor, is one option. Another is to transform Arianespace, and the commercialization of all European launch vehicles, into an “ESA Special Project.”

Engstrom said such a structure is not without precedent, noting that Sweden’s Esrange facility, which launches suborbital sounding rockets and balloons for ESA and other customers, is operated this way.

Doing away with Arianespace would save some 10 million euros per Ariane 5 launch, the report concludes, meaning 60 million euros to 70 million euros a year at Ariane 5’s current launch rate.

An Arianespace official said the company was aware of the report and would have no comment on it.

In the nearer term, the report says, ESA governments should approve production of a new upper stage for Ariane 5, featuring a restartable motor called Vinci. Early development of Vinci has begun, and ESA governments are expected to decide in 2012, if not before, whether to finance development of the full upper stage.

The authors say the Vinci stage should be designed as one of the modular pieces for Europe’s next-generation rocket, perhaps as a second stage for the new vehicle.

The report, “Long-Term Strategy for European Space Launchers,” was written by well-known figures, now mainly retired, from Europe’s industrial and government launcher sector. In addition to Engstrom, who is from Sweden, they are: Philippe Couillard, Bernard Deloffre, Jacques Durand, Claude Goumy, Yves Sillard and Jacques Villain, all of France; Jorg E. Feustel-Buechl, Ralph Jaeger, Wolfgang Koschel and Horst Rauck of Germany; and Antonio Fuentes of Spain.