Rising Launch Prices Buoy Arianespace’s Outlook

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  Space News Business

Rising Launch Prices Buoy Arianespace‘s Outlook

By PETER B. de SELDING
Space News Staff Writer
posted: 17 January 2007
02:22 pm ET



PARIS
– The Arianespace commercial-launch consortium expects to report revenue of about 985 million euros ($1.28 billion) for 2006, an 8.8 percent decline due to the lingering effects of a price war company officials say is no longer troubling the global commercial-launch market.

 

The Evry, France-based company said that when its year-end accounts are approved in the spring, it is likely to show a slight profit, as it did a year ago. As was the case in 2005, Arianespace’s balance sheet in 2006 was aided by about 200 million euros in support payments by European governments to offset certain fixed costs that Arianespace incurs at the
Guiana
Space
Center
spaceport in
French Guiana
.

 

The heavy-lift Ariane 5 ECA rocket was launched five times in 2006.

 

Arianespace expects that Starsem S.A., a French-Russian joint venture, which commercializes
Russia
‘s Soyuz rocket, will report 70 million euros in revenue in 2006. Starsem managed two Soyuz launches in 2006.

 

Launches conducted in 2006 were for contracts signed, for the most part, in 2004 or earlier, when Arianespace and its U.S. and Russian competitors battled for market share and lowered prices when that was necessary to win business. Since then, launch prices have increased.

 

Arianespace Chief Executive Jean-Yves Le Gall said that prices now are around $20,000 per kilogram, meaning a 4,000-kilogram telecommunications satellite would fetch a launch fee of some $80 million.

 

More price increases may be on the way. Le Gall said that when Arianespace begins operating Soyuz launch vehicles from the
Guiana
Space
Center
in late 2008, it is likely to charge around 50 million euros per launch – at least 25 percent more than the current price for Soyuz launches from
Russia
‘s Baikonur Cosmodrome in
Kazakhstan
.

 

Addressing a press briefing here Jan. 8, Le Gall said the company will be ordering 30 more Ariane 5 ECA heavy-lift rockets from industry in 2007.

 

The order, to be made through Ariane’s prime contractor Astrium, will likely be only for the Ariane 5 ECA configuration. Le Gall made clear that the company wants to devote itself to a single Ariane 5 product line for awhile instead of testing new technologies.

 

“We have launched the Ariane 5 ECA just seven times – this is a very small number, even though we have quickly become confident in the design,” Le Gall said. “Let’s stick with this version for the moment.”

 

The European Space Agency (ESA) and the French space agency, CNES, are investing in several next-generation launcher technologies including the Vinci restartable upper stage that would boost the Ariane 5’s payload-carrying power to nearly 12,000 kilograms into the geostationary transfer orbit used by most telecommunications satellites. Today’s Ariane 5 ECA can lift two telecommunications satellites weighing a combined 9,300 kilograms into that orbit.

 

Le Gall said Arianespace fully supports these government-funded initiatives like Vinci, which give work to the research and development division of European rocket-component builders at a time when they can count on few other development programs.

 

But Le Gall said Arianespace will not sacrifice the hard-won reliability of the Ariane 5 ECA by tinkering with it, even if additions such as Vinci may be necessary for future work launching
Europe
‘s Galileo satellite navigation constellation, or the commercial Globalstar fleet of communication satellites.

 

Arianespace has not signed contracts for either constellation, but is actively negotiating for the Globalstar work and company officials have said they expect the 30-satellite Galileo system, even if it is managed by a profit-making private consortium, will be politically obliged to select
Europe
‘s launch system.

 

“I cannot imagine Galileo not being launched by Arianespace,” Le Gall said. “Otherwise, it would mean Galileo is no longer an instrument of European sovereignty.”

 

European governments in December 2005 agreed to give preference to Arianespace – for Ariane 5, Soyuz and the future Vega small-satellite launcher – whenever possible in launching government satellites.

 

But the agreement carried no binding commitments. Recently the Italian government selected a Boeing Delta 2 vehicle to launch the first two Cosmo-Skymed radar reconnaissance satellites, saying Boeing offered a better combination of price and schedule than Starsem and Soyuz.

 

Le Gall said he regretted
Italy
‘s move was “not entirely coherent” with the launcher-preference agreement, which
Italy
supported.