XM’s Insurance Goes Up On Next Launch

PARIS — XM Satellite Radio will be paying several million dollars more than it expected in insurance premiums by virtue of its being moved ahead of Intelsat in the launch manifest of Sea Launch LLC, according to industry officials.

The XM-3 satellite is being readied for a launch in February from Sea Launch’s floating Pacific Ocean platform. It will be Sea Launch’s first campaign since a June mission marked by the underperformance of the vehicle’s Block DM upper stage.

Long Beach, Calif.-based Sea Launch and Block DM manufacturer RSC Energia of Moscow have since announced they have corrected the problem, which industry officials agree had little consequence for the satellite actually lofted but would have resulted in a failure if the vehicle had been carrying a heavier payload.

Intelsat Ltd. of Washington had been next up on Sea Launch’s manifest with its IA-8 satellite. But IA-8 was taken out of the Sea Launch queue in December when Intelsat’s IA-7 satellite unaccountably failed in orbit, then partially returned to service a week later.

IA-7 and IA-8 are both Space Systems/Loral platforms. Intelsat postponed the launch until the cause of the IA-7 failure had been determined, and any corrective actions taken on the IA-8.

John McCarthy, a spokesman for New York-based Loral, said Jan. 7 the investigation into the IA-7 failure was continuing but had reached no firm conclusions. He said IA-8 remains at Sea Launch’s Long Beach, Calif., preparation facility while Intelsat and Loral examine the IA-7 problem.

When XM secured its launch-insurance policy, it accepted a clause that made a launch on a vehicle’s first flight after an anomaly contingent on accepting a higher launch-insurance premium. That clause has now been triggered, industry sources said.

Launch insurance rates for large telecommunications satellites typically run around 20-23 percent of the value of the satellite and the launch vehicle, depending on the history of the vehicle and the satellite design.

Chance Patterson, spokesman for Washington-based XM Satellite Radio, said Jan. 7 he could not comment on the specific clauses in XM’s launch-insurance policy.