The last time a merger of big satellite-fleet operators occurred, the satellite manufacturing and launch industry took an immediate hit.

The newly formed SES Global cancel

ed four spacecraft on order from Alcatel Alenia Space, saving close to $1 billion in capital expenditures in one of its first acts following the merger of SES Astra of Europe with GE Americom of the United States.

While such a dramatic move is not expected from Intelsat‘s purchase of PanAmSat or SES Global’s buyout of New Skies Satellites, some hardware manufacturers say the mergers ultimately will lead to fewer satellites being ordered and launched. But the six principal commercial satellite prime contractors have a more nuanced view now that they have seen how SES Global has acted in the more than five years since the merger.

Here is how they responded to the question: Will mergers necessarily result in fewer satellites being ordered?

Alcatel Alenia Space:

“We had a very costly, painful experience following the creation of SES Global,” said Patrick Fournier, executive vice president for operations. “But the merged company proved to be loyal in that two of the orders we lost were eventually reordered, in a different form. But two others were completely lost.

“Our conclusion is that the manufacturers likely will suffer in the short term, but that there is reason to hope for post-merger growth in the medium and longer term. The merged company will naturally try to rationalize orbital assets and optimize costs, but larger, healthier operators may be in a better position to grow later on.”

Boeing Satellite Systems International:

“Fixed satellite services providers have curtailed capital expenditures following a series of leveraged buyouts in the sector,” El Segundo, Calif.-based Boeing said in a written response to questions from Space News.

“In the short term, [the announced] mergers likely will forestall an

upswing in commercial satellite orders.

“In the long term, these mergers could spark renewed emphasis on research and development among manufacturers for more efficient and flexible satellites. For operators, it could mean greater emphasis on new applications as the buyers seek to serve an enlarged customer base and strengthen their competitive position. It is safe to say that a more stable and healthy satellite services industry is good for satellite manufacturers.”

EADS Astrium:

“There are certainly going to be some reductions [in capital expenditure] following mergers, this seems clear,” said Antoine Bouvier, president of EADS Astrium of Europe. “But the health of our industry depends on finding new areas for growth, in addition to replenishing existing capacity in orbit.

“We are already seeing some new applications, such as multi-use satellites for communications and meteorology, and nations federating their demand for military communications to share satellite capacity. These are promising signs that address new customers. The consolidation of the operator community should not be viewed as catastrophic for our business.”

Lockheed Martin Commercial Space Systems:

“We are certainly not indifferent” to the consolidation of satellite-fleet operators, said Rick Masoni, executive vice president of the Newtown, Pa.-based company. “When the P-E [private-equity] players got in, we began to discount our forecasts for speculative satellite ventures. The effects of this, and the consolidation, will be increased buying power on the part of the larger operators. Second, we think that until they are able to integrate their companies, they will tend to put on hold new procurements. So some anticipated procurements might be delayed, leading to fewer total procurements as they rationalize their assets.

“These effects will put more pressure on manufacturers – there is no doubt about that. So for 2006 we may see fewer satellites ordered than forecast. If you look at SES Global and their investments, you see a company that is not encumbered by private-equity pressures, and that is able to exploit its freedom.”

Space Systems/Loral:

“Consolidation is creating stronger companies, and a stronger customer base for the industry,” said Eric J. Zahler, president of Loral Space and Communications, which owns Palo Alto, Calif.-based Space Systems/Loral.

“But the ultimate demand doesn’t depend on the number of satellite operator customers, it demands on the end users. Some say fewer, larger operators will purchase fewer satellites, and there will be periods, like the late 1990s, when you have overcapacity and then have to pay for it later on in fewer orders. But I don’t buy the end-of-the-world scenarios. In the case of Intelsat and PanAmSat specifically, I don’t see any downward trend in the requirements of these companies for satellites. More generally, we have seen new operators emerge to create new markets.”

Orbital Sciences Corp.:

“This trend is good for us,” said Ali E. Atia, president of Orbital Communications, the satellite manufacturing subsidiary of Dulles, Va.-based Orbital Sciences.

“When companies merge it has been very positive for us. PanAmSat is a good customer already, and we have been courting Intelsat for some time. In general, the whole industry will expand with the creation of these stronger companies, and perhaps [the merged companies] will order more satellites. So we see this as good news.”