SES Order Adds to SpaceX Backlog

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PARIS — Satellite fleet operator SES’s decision to book three more launches with startup provider SpaceX is the latest example of the commercial satellite industry’s unprecedented demonstration of faith in a vehicle that, to date, has never flown to a commercial orbit.

Hawthorne, Calif.-based Space Exploration Technologies Corp. (SpaceX) long ago won over NASA as an anchor customer. After making a successful flight of its Falcon 9 rocket and berthing the Dragon capsule to the international space station earlier this year, SpaceX is now preparing to begin regular flights to the station, with the next launch scheduled to occur this fall.

It now appears to be the turn of commercial satellite operators to line up behind SpaceX and Falcon 9.

Luxembourg-based SES, which was the first major commercial satellite operator to book Falcon 9 — the SES-8 satellite is scheduled for launch in the second half of 2013 — announced Sept. 12 it had contracted for three more satellites to launch on Falcon 9 or the future Falcon Heavy rocket starting in 2015.

Industry officials say the SES order brings to over $1 billion the backlog of commercial satellites now on SpaceX’s manifest. While some of these companies, including SES, have easy exits to other vehicles if SpaceX does not perform, this is not true of all SpaceX customers.

Frank McKenna, president of International Launch Services (ILS) of Reston, Va. — a veteran launch service provider and a principal SpaceX competitor — said he has calculated that SpaceX is, on average, just under 50 percent less expensive than ILS, Arianespace of France and other established launch service providers.

For McKenna, the SpaceX phenomenon means that nearly $500 million has been withheld from the commercial launch industry — an industry not generally associated with thick profit margins — in the less than three years since SpaceX arrived on the scene.

For SES and others, it is $500 million in savings.

A half-dozen industry officials interviewed here during the World Satellite Business Week conference organized by Euroconsult said they have never seen the commercial market book so much business on a rocket with so little flight heritage.

The new SES order came just weeks after a failure of the Russian Breeze M rocket carrying satellites on a Russian government-organized launch. It is the same rocket that ILS uses, and this was its second failure in a year.

SES has signed multi-launch deals with ILS and Evry, France-based Arianespace, which operates Europe’s Ariane 5 rocket.

The decision reflects SES’s belief that its business depends on having at least one more launch services provider in addition to ILS and Arianespace. SES Chief Executive Romain Bausch said the company is still evaluating Sea Launch AG of Bern, Switzerland, which uses a Russian-Ukrainian rocket launched from a floating platform in the Pacific Ocean.

Bausch told journalists Sept. 12 that SES was troubled by the most recent Proton Breeze M problem.

“There are obviously too many failures” happening at ILS, Bausch said. “Even one failure is too many. We have a clause in our multilaunch agreement that allows us to step out of the contract if the number of failures exceeds a ceiling. We are not there yet, but we are getting closer.”

Bausch said the SpaceX deal is not an isolated decision, but an attempt by SES to help SpaceX establish itself as a third alternative in the commercial industry.

“We are building up a third leg to diversify our sources of launchers,” Bausch said. “Ariane 5 is expensive but very reliable — always a good component of your toolbox. We will not leave Proton, either.”

Bausch said SES remains confident that SpaceX will be able to launch SES-8 around July 2013. As a condition of the contract, SES said, SpaceX must have conducted a successful launch of the new Merlin 1D engine and a new 5-meter-diameter fairing that will be used for the SES flight.

SpaceX President Gwynne Shotwell said here Sept. 11 during World Satellite Business Week that SpaceX has completed the design and the first model of the new fairing, with testing to start in a month or so. Qualification tests of the Merlin 1D have already begun and are scheduled to continue to the end of this year, she said.

The qualification launch of the new ensemble is scheduled to occur by June 2013, a mission that will carry a small Canadian research satellite into polar low Earth orbit, not to the geostationary transfer orbit where SES-8 and most other telecommunications satellites are placed.

“If there are delays we will have a backup, in this case the Ariane 5,” Bausch said. “If we see a delay in Falcon 9 for SES-8, we would need to inform Arianespace six months ahead, so around November or December, saying we are moving SES-8 to Ariane. In that case we would push the Falcon launch to another satellite at a later date.”