Ariane 6 might be in trouble


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Capitalism in space: Arianespace today announced that they will not be able to begin full production of their next generation rocket, Ariane 6, unless they get four more contracts from the partners in the European Space Agency.

With the maiden flight of the Ariane 6 now 18 months away (in July 2020), Arianespace CEO Stéphane Israël said the company had anticipated signing a manufacturing contract with ArianeGroup in the second part of last year to begin production beyond the first rocket.

So far, European public entities have purchased three Ariane 6 missions — two from the European Commission for launching Galileo navigation satellites, and one from France for the CSO-3 military imaging satellite — but have not committed to the number envisioned at the start of the Ariane 6 program in 2014.

“We are confident it will happen,” Israël said of the remaining government missions. “But it is not done yet. We are working in this direction. It is now quite urgent because industry has anticipated the manufacturing of these first launchers, but now we need these institutional contracts to fully contractualize the first Ariane 6s.”

I wonder if the fact that the cost for an Ariane 6 launch is expected to be remain higher than a comparable SpaceX launch is the reason they are having trouble getting a commitment from their European partners. Why buy this rocket, when you can get the same service for less?

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7 comments

  • Col Beausabre

    Because Arianespace, like Airbus, isn’t a company, it’s a jobs program. Don’t worry, the politicians will find some “vitally needed” missions “that must be funded now” Look for complaints from the EU to the WTO about “unfair competition” from the US (which is how they justified their subsidies to airbus, that USAF purchases of 2,000 B-47’s, 700 B-52s and 800 KC-135’s were “subsidies” to Boeing….somehow I was under the mistaken belief that purchases freely negotiated between buyer and seller that resulted in a tangible good being transferred were something called “sales”)

  • Edward

    Col Beausabre,
    You wrote: “(…somehow I was under the mistaken belief that purchases freely negotiated between buyer and seller that resulted in a tangible good being transferred were something called ‘sales’)

    I have had arguments, including at least one here at BtB, that SpaceX’s government sales are in reality subsidies. Apparently, many people believe that any sale that a company makes to its government is in actuality a subsidy to that company. Thus, Arianespace’s subsidies are far, far higher than the hundred-million or so euros that it gets in subsidies — er — direct funds for no specifically contracted services provided, each year. Also, ULA and most U.S. defense contractors run almost exclusively on subsidies. (Don’t even get me started on the various forms of welfare handed out (read: “subsidies to individuals”) that keeps people poor, meaning they have incentive to not contribute to the production side of the economy.)

    It becomes a very different world, once the definition of subsidy changes from the dictionary definition.
    https://www.dictionary.com/browse/subsidy

    1. a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like.

  • Richard M

    Part of the problem may simply be ESA partners moving at the Speed Of Bureaucracy.

    I think the political support *does* remain among key partners to keep Arianespace afloat as an “indigenous” launch capability – and of course, as a key jobs provider. But the most important ESA partners (Germany, France, Italy, UK) all have very big political fish to fry right now.

    SpaceX’s advantage is that it is less dependent now on government contracts. The majority of its launches in 2018 and 2017 were in fact commercial clients, not government. That customer base diversification leaves it less vulnerable than any competitor to the vagaries of government programs. It also doesn’t require any new launcher to remain competitive for the next decade – the BFR/Starship would be a nice thing to have, but SpaceX’s survival does not depend on it.

  • wodun

    A company can sell a product or service to a government and it still be considered a subsidy. That doesn’t mean the entire price paid is the subsidy. There are any number of things associated with the space program, even COTS, that could be considered a subsidy. But all subsidies are not created equal and they don’t all have the same types of effects. Rather than get into the weeds about whether or not something is a subsidy, it is better to focus on how competitive these products and services are and if there is a competitive advantage/disadvantage due to government.

  • pzatchok

    Don’t worry they will make it up in volume.

  • wayne

    pzatchok-
    Most excellent!

    tangentially—

    “Mankiw’s 10 principles of economics, translated for the uninitiated”
    Yoram Bauman [aka the “Stand Up Economist.”]
    https://youtu.be/VVp8UGjECt4
    5:20

  • wayne

    The Theory of Interstellar Trade
    Paul Krugman

    “This article extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest charges on goods in transit be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.”

    http://www.standupeconomist.com/pdf/misc/interstellar.pdf

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