New Airbus-Safran Venture Eyes Full Control of Arianespace

by

PARIS — Airbus Defence and Space on Jan. 8 said its new joint venture with Safran, Airbus Safran Launchers, would purchase the French government’s shares in the Arianespace launch service provider “in the coming weeks” and by the end of the year would assume total control of the design and future production, operation and commercial sales of the next-generation Ariane 6 launcher.

Just five weeks after European governments agreed to spend more than 8 billion euros ($10 billion) on Ariane 6 and the maintenance of the current Ariane 5 vehicle and other rocket-related investments, Airbus appeared to be pressuring the French government to sell its 34 percent Arianespace stake sooner rather than later. The government’s ownership is held through the French space agency, CNES.

“Today we already have control of Arianespace,” Airbus strategy director Marwan Lahoud said in a press briefing organized by the French aerospace industries association, GIFAS, of which he is the current president. “Our joint venture by itself has the majority of Arianespace’s capital. We are in the process of acquiring CNES’s shares, which should be completed in the coming weeks.”

Airbus Safran Launchers now controls 41 percent of Arianespace’s equity. CNES’s 34 percent stake gives it blocking-minority power.

CNES President Jean-Yves Le Gall, a former chief executive of Evry, France-based Arianespace, was vague about the timing of the cession of the CNES stake in Arianespace, saying discussions are underway but that there was no reason to rush things.

Ariane 64. Credit: ESA
Industry and government officials have said getting the money for Ariane 6 (shown above in the Ariane 64 configuration) was only the first, and perhaps not the most difficult, of the milestones. Credit: ESA

“Industry has expressed a desire to purchase all or part of the CNES Arianespace shares,” Le Gall said in a Jan. 5 press briefing. “I don’t have the impression that this issue is stopping progress on Ariane 6, and we have many more important things to discuss than this.”

Revolutionizing the relations between European governments and industry with respect to Ariane rocket work, with the goal of meeting Ariane 6 cost targets, is at the heart of the Dec. 2 decision by European Space Agency governments to proceed with the vehicle’s development.

Industry and government officials have said getting the money for Ariane 6 was only the first, and perhaps not the most difficult, of the milestones. Getting ESA, CNES and industry to agree on a new working relationship will be just as tricky, they said.

From Airbus’ perspective, the production of rockets in Europe should be done the same way commercial Airbus aircraft are built.

“The launcher business in Europe in the beginning of 2014 was one in which the vehicles were designed by government agencies, commercialized by a company called Arianespace, produced by an ensemble of companies, and then launched by Arianespace. This is not an optimal situation,” Lahoud said.

“The optimal solution is to industrialize the process, with one prime contractor that designs, builds, sells and operates the launchers, with a supply chain — much as we do with Airbus today.”

The effect of Lahoud’s remarks on Arianespace employees, and those working for the CNES and ESA launcher directorates, will only be known over time. Arianespace has had to contend with employee protests, most recently at Europe’s Guiana Space Center spaceport on the northeast coast of South America.

In a Jan. 6 briefing, Arianespace Chief Executive Stephane Israel said Arianespace spaceport workers did not strike, but limited their action to the distribution of leaflets protesting their workload and voicing concerns about their future. Arianespace employees in France made a similar protest in mid-2014.

Israel said he understood their concerns, but that Arianespace has more to fear by standing still than by evolving as part of a launcher efficiency drive. He nonetheless said Arianespace is adding five new employment positions at the spaceport to ease the strain of the mounting launch cadence — 11 launches in 2014, with 11-12 planned for this year.

Le Gall said CNES and ESA would remain Ariane’s program managers, with Airbus Safran Launchers the prime contractor. He said the two agencies have already streamlined their operations, relocating into a single office suite three years ago. Now it is industry’s turn to make similar efficiency moves, he said.

Asked who — the company or the space agencies — would decide in the event of a disagreement on Ariane 6 development, Le Gall said there would need to be a compromise.
“European governments didn’t approve spending 4 billion euros of taxpayer money [on Ariane 6 development] only to surrender [to industry] all control,” Le Gall said. As to the specific authority of the government agencies over Ariane 6, he said that is one of the issues to be negotiated “in the coming months.”

Michel Eymard, CNES’s launcher director, said a mutual dialogue between the agencies and industry serves both sides’ interest. Ariane 6, he said, will be Europe’s strategic launcher for government payloads starting around 2020. It is only natural that these governments would want to maintain a seat at the design and development table.

On the other side, Eymard said, industry has reserved the right, in the event of an Ariane 6 failure, to appeal to governments for financial and technical assistance. That assistance might be less forthcoming if industry had ignored agency input on Ariane 6 design choices.