The European partnership building the new Ariane 6 rocket struggles to keep its costs down to compete with SpaceX.

The competition heats up: The European partnership building the new Ariane 6 rocket struggles to keep its costs down to compete with SpaceX.

Ariane 5 has been a huge triumph, orbiting half of the world’s communications satellites and claiming 60% of the 2012 world market for geostationary launches. But while the rocket is extremely precise and reliable it is also hugely expensive, with a single-payload flight costing €150-200 million. However, even at that price Ariane 5 launches are understood to be loss-making for ESA’s launch operator, Arianespace. Its high cost in in large part blamed on its industrial organisation; while private-sector SpaceX has tailored the Falcon programme for low cost production, the Ariane 5 project is organised in part to satisfy the demands of European multi-national politics.

Speaking exclusively to Flight Daily News, ESA’s Stefano Bianchi, who heads the Vega programme and now spends much of his time dedicated to Ariane 6 development, stresses that the programme is on course as set out by ESA’s member states, and any major change of configuration would require ministerial agreement.

But, he says, he and his colleagues are confident they can bring Ariane 6 to fruition at the target launch cost of €70 million – a level that would match or even undercut SpaceX. [emphasis mine]

This story is in connection with the conflict between France and Germany about how to build Ariane 6. I have specifically highlighted the cost figures to illustrate once again the reality that everyone in the industry knows (except for one commenter on my webpage), that the cost of a SpaceX launch runs in the neighborhood of $60 to $100 million, one third to half the cost of Arianespace and significantly less than the cost of practically every other launch company.

Any company that realistically wants to compete with SpaceX has to be totally honest about these facts. Their customers are honest about them, for certain.

Update: The CEO of ULA admits that the real cost of its military launches averages about $225 million per launch.

He claims they can get the cost down to $100 million per launch, but only if the military makes a bulk buy of 50 launches from them, but even that barely competes with SpaceX’s accepted launch fees ranging from $75 to $100 million, per launch. No need to buy 50 rockets from SpaceX to get these prices.

The battle between France and Germany on how to replace the Ariane 5 rocket continues.

The battle between France and Germany on how to replace the Ariane 5 rocket continues.

To save money and lower cost, France wants to build a rocket that mostly uses solid rocket motors. Germany however has a problem with this.

German government officials have said they will have difficulty supporting the current Ariane 6 design, which features four identical solid-fueled stages — two as strap-on boosters, and two as the vehicle’s first and second stages — topped by the cryogenic upper stage powered by the same restartable Vinci engine that is the main element of the proposed Ariane 5 upgrade. Germany, through its space agency, the German Aerospace Center, DLR, has said it would prefer a liquid-fueled first stage for Ariane 6 as such a stage could be built in Germany and thus assure a large German industrial role in the program. Without such a role, DLR has said, German support for Ariane 6 might not be forthcoming.

The story above says that France is willing to negotiate with Germany over this, but if they do, they guarantee that Ariane 6 will be a costly rocket to build, making it very unattractive to satellite customers.

European satellite operators are pressing Arianespace to find ways to immediately reduce the cost of launching satellites on now Ariane 5 and in the future on Ariane 6.

European satellite operators are pressing Arianespace to find ways to immediately reduce the cost of launching satellites on now Ariane 5 and in the future on Ariane 6.

And why are they doing this? To quote them:

“What is sure is that Europe deserves and requires a [reorganized launcher sector] ahead of 2019, the letter says. “[C]onsiderable efforts to restore competitiveness in price of the existing European launcher need to be undertaken if Europe is [to] maintain its market situation.

“In the short term, a more favorable pricing policy for the small satellites currently being targeted by SpaceX seems indispensable to keeping the Ariane launch manifest strong and well-populated.” [emphasis mine]

It seems that they take very seriously the competitive challenge being presented by SpaceX.

According to the former CEO of Arianespace, now head of the French space agency, SpaceX’s Falcon 9 costs significantly less to launch than the Ariane 5

According to the former CEO of Arianespace, now head of the French space agency, SpaceX’s Falcon 9 costs significantly less to launch than the Ariane 5.

How big is the difference? Jean-Yves Le Gall, who until mid-2013 was chief executive of Evry, France-based Arianespace and is now president of the French space agency, CNES, addressed the point in Feb. 25 testimony to the French Senate. According to Le Gall, launching a satellite on an Ariane 5 costs around 100 million euros ($137 million). After subtracting the amount of European Space Agency subsidies to Arianespace, the per-satellite cost drops to about $100 million, he said.

Hawthorne, Calif.-based SpaceX, he said, would charge $60 million to $70 million to launch the same satellite aboard the Falcon 9. In fact SpaceX has charged even less than that to its first few commercial customers.

It is for this reason that Arianespace is struggling to decide how to build its next generation rocket. They have find a way to do it cheaper, something that is very difficult for this multi-headed European conglomerate to do.

The European Space Agency has now released its first cost estimates for upgrading and replacing its Ariane 5 rocket.

The European Space Agency has now released its first cost estimates for upgrading and replacing its Ariane 5 rocket.

Europe needs to find about 1 billion euros ($1.35 billion) to complete development of an upgrade to its current Ariane 5 heavy-lift rocket, which would fly in 2018 and be capable of lifting satellites weighing 11,000 kilograms into geostationary transfer orbit, European Space Agency Director General Jean-Jacques Dordain said Jan. 17. The Ariane 5 upgrade, called Ariane 5 ME, will be on the table for ESA governments to decide, alongside the new Ariane 6 rocket, at a meeting scheduled for December in Luxembourg.

In a press briefing in Paris, Dordain said it is too early to say how much Ariane 6 will cost to develop. Government and industry estimates have ranged between 3 billion and 4 billion euros, with an inaugural flight in 2021.

As Doug Messier notes in his worthwhile analysis of these numbers, “Europe is in deep trouble.” From a customer’s perspective, these new rockets won’t fly (pun intended). The cost is too high and the development time too long. By the time they get both Ariane 5 and Ariane 6 ready for launch they will be obsolete and overpriced, when compared to the rocket’s that will already be available from their competitors.

In meetings today the European Space Agency has decided to upgrade Ariane 5 rather than immediately build a new Ariane 6 rocket.

In meetings today the European Space Agency (ESA) has decided to upgrade Ariane 5 rather than immediately build a new Ariane 6 rocket.

Normally I would label this story as an example of “the competition heating up.” In this case, however, I don’t see how an upgrade of Ariane 5 can possibly be competitive. The rocket has been so expensive to operate that — even though it has dominated the launch market for years and is very reliable — ESA has had to subsidize its cost. It has never made a profit. I don’t see how they can reconfigure it enough to bring its cost down to compete with Falcon 9. In other words, they are trying to put lipstick on a pig.

Nor is this surprising. Arianespace is a government-run business, operated like a committee with the member nations of ESA all having a say. Under this arrangement, it is difficult if not impossible to get a quick and efficient decision. Moreover, political concerns will often outweigh issues of efficiency and profits.

In the open competitive market of privately-run companies that the launch market is becoming, I am very skeptical this kind of business can survive.

Faced with stiff competition in the launch market, Europe struggles to come up with a competitive replacement for Ariane 5

Faced with stiff competition in the launch market, Europe struggles to come up with a competitive replacement for Ariane 5

“I strongly believe we have to decide, as quickly as possible, to develop a new-generation launcher to be competitive in the market as it is forecast, and with the competitors,” [ESA Director General Jean-Jacques] Dordain said at the Berlin air show last month, a reference to new launch vehicle developments in India, China and the U.S., where Space Exploration Technologies’ low-cost Falcon 9 is challenging the global launcher market.

While space cadets might argue about launch prices till the cows come home, the actual competitors in the industry know better: SpaceX’s low prices are real and are forcing everyone to find ways to lower costs or lose business.

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