Tag: Arianespace

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

10:29 pm

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.

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Arianespace and the Russian-owned Sea Launch are seeking to get the restrictions against them removed so that they can sell their services to more customers.

9:26 am

The competition heats up: Arianespace and the Russian-owned Sea Launch are seeking to get the restrictions against them removed so that they can sell their services to more customers.

Arianespace wants to sell its launch services to the U.S. government, something it is not allowed to do right now because of U.S. restrictions. These are the same kinds of restrictions that has prevented SpaceX from launching military satellites and which that company is now contesting.

Russia meanwhile wants to use Sea Launch for its own payloads, but because Sea Launch’s platform is based in California, the Russian government won’t allow their payloads on it because of security reasons. They want the platform moved to Russia so that they can use their own company to launch their own satellites.

The article also describes how Japan is trying to reduce the cost of its H-2A rocket by 50% so that it can become more competitive.

All in all, I would say that the arrival of SpaceX has done exactly what was predicted, shaken the industry out of its doldrums. How else to explain this sudden interest in open competition and lowering costs? These companies could have done this decades ago. They did not. Suddenly a new player arrives on the scene, offering to beat them at their own game. It is not surprising that they are fighting back.

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Arianespace, under severe competitive price pressure from SpaceX, begs for more subsidies from ESA.

9:21 pm

The competition heats up? Arianespace, under severe competitive price pressure from SpaceX, begs for more subsidies from ESA.

In comments responding to a Feb. 11 audit of the French Accounting Court, Cour des Comptes, Israel said that since 2005 Arianespace has improved its competitiveness to the extent that some €200 million ($273 million) in annual subsidies from the 20-nation European Space Agency (ESA) have been halved. In addition, the reliability of the Ariane 5, which has seen 58 consecutive successes since 2002, has allowed the company to increase launch prices. The company also has reduced costs with a recent bulk buy of 18 Ariane 5 rockets that saved Arianespace 5%.

Nevertheless, Israel said the arrival of the medium-lift Falcon 9 as a competitor at the low end of the commercial communications satellite market, with prices substantially lower than what Arianespace charges for Ariane 5, means the company may be forced to ask ESA governments to increase price supports beyond the current €100 million per year. [emphasis mine]

In other words, this government-funded boondoggle doesn’t know how to compete effectively on the open market, and wants an additional government bailout to keep its head above water.

Note also the text in bold. Several commenters on this website have repeatedly insisted that SpaceX’s Falcon 9 was not the bargain claimed, despite numerous examples in the past three years of their competition saying they were that inexpensive. This statement by Arianespace’s CEO reaffirms the fact that SpaceX is cheaper, and is forcing major changes to the launch industry.

In related news, French government auditors have found much wrong with Arianespace’s current long term commercial strategy.

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

8:54 am

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.

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Arianespace, in an effort to trim costs, is considering slashing the number of companies that will build its next generation rockets from 150 to 50.

3:35 pm

The competition heats up: Arianespace, in an effort to trim costs, is considering slashing the number of companies that will build its next generation rockets from 150 to 50.

You might call this the SpaceX effect. Their success and lower launch costs is forcing changes throughout the launch industry.

Note also that there is certainly a lot of room for Arianespace to trim, considering that this European rocket company has still never made a profit, despite dominating the commercial launch market for years.

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Arianespace has ordered the construction of an additional 18 Ariane 5 rockets.

4:07 pm

Arianespace has ordered the construction of an additional 18 Ariane 5 rockets.

This construction order, if it reflects actual launch contracts, gives Arianespace some margin while it works to find ways to compete in the launch business, as expressed by the last sentence of the above article: “Astrium managers recently called for a thorough overhaul of the Ariane contractor mix with a view to reducing prices to stay viable in the competitive world commercial launch market.”

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Arianespace has signed a contract to build 18 more Ariane 5 rockets.

9:13 am

The competition heats up: Arianespace has signed a contract to build 18 more Ariane 5 rockets.

This order takes the number of Ariane 5 launchers in production for Arianespace to 38, and guarantees the continued provision of launch services for the European operator’s customers at the Guiana Space Centre through to the end of the decade.

Without doubt Arianespace is now in a solid position through the end of the decade. What will happen to them, however, when Falcon 9 and other cheaper rockets begin to fly regularly will be the real story. They have not yet found a way to cut their costs.

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While the launch industry eagerly awaits SpaceX’s first commercial Falcon 9 launch on September 10, Arianespace has been signing up customers.

10:16 am

The competition heats up: While the launch industry eagerly awaits SpaceX’s first commercial Falcon 9 launch on September 10, Arianespace has been signing up customers.

Arianespace Chief Executive Stephane Israel said Aug. 29 after the last Ariane 5 launch that the company has booked around 300 million euros ($400 million) in new orders in recent weeks, bringing this year’s total contract volume to 1 billion euros. Industry officials said the contracts are for government missions in Brazil and Japan, and commercial operators in Brazil, the United States, Mexico and Spain.

The Ariane 5 is incredibly reliable, having successfully completed more than fifty launches in a row. It is also much more expensive that Falcon 9, which is expected to cost a customer about half as much to get a payload into orbit.

Until SpaceX proves Falcon 9, Arianespace will be in a strong position to get customers. Once Falcon 9 starts flying regularly however, Arianespace will begin to lose business to this cheaper alternative. Thus, the new contracts will help tide the company over while they scramble to figure out how to reduce costs in order to compete.

In related news, SpaceX readies the new upgraded Falcon 9 for launch.

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Arianespace will not be able to set its launch manifest for the remainder of this year until late July.

7:09 pm

The competition heats up: Arianespace will not be able to set its launch manifest for the remainder of this year until late July.

The year’s third Ariane 5 mission is scheduled for launch in late July carrying the large Alphasat satellite for mobile satellite services operator Inmarsat of London and the European Space Agency (ESA); and India’s Insat-3D telecommunications satellite.

Beyond that, Israel said, it is unclear which commercial payloads will be placed on which of the two remaining Ariane 5 flights, scheduled for this fall, or what the Ariane 5 manifest looks like for 2014. A big question is whether Arianespace has any slots open in the Ariane 5 manifest in 2014 to accommodate new customers who want to switch to Ariane 5 because their selected vehicle is late.

This article not only suggests that Arianespace has more business than it can handle, it is also provides evidence that the company is scrambling to cut costs in order to compete.

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Europe admits that its planned accelerated upgrades to Ariane 5 are intended to counteract the competition from both Russia’s Proton and SpaceX’s Falcon 9 rockets.

9:27 pm

The competition heats up: At a briefing at the Paris Air Show this week Arianespace admitted that its planned accelerated upgrades to Ariane 5 are intended to counteract the competition from both Russia’s Proton and SpaceX’s Falcon 9 rockets.

I love competition. It energizes everything.

Update: This long article specifically discusses how Arianespace is scrambling to meet the competition. Key quote:
» Read more

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

9:56 am

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.

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SpaceX’s launch manifest for 2013 included three commercial launches in addition to its cargo flights to ISS.

8:20 am

SpaceX’s launch manifest for 2013 includes three commercial launches in addition to its cargo flights to ISS.

All told, it appears that 2013 will a crucial year for SpaceX. They first need to solve the question of that engine failure from their October Falcon 9 launch. Then they need to begin putting into orbit the long list of private satellites that they have contracts for but have held off launching pending the success of the NASA deal. Once they do that, set to begin next year, they will have proven – beyond a shadow of a doubt — that they are for real.

And on that subject, Elon Musk had some thoughts yesterday about his European competitors: “Europe’s rocket has no chance.”

SpaceX’s Falcon is a new entrant to the launcher market. It has so far made only four flights, but it has a backlog already of more than 40 contracted launches. Its quoted price under $60m per flight is proving highly attractive to satellite operators who have to pay substantially more to get on an Ariane. “Not only can we sustain the prices, but the next version of Falcon 9 is actually able to go to a lower price,” warned Mr Musk. “So if Ariane can’t compete with the current Falcon 9, it sure as hell can’t compete with the next one.”

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France and Germany in the European Space Agency are at loggerheads about the best way to compete in the launch market.

9:51 am

The competition heats up: France and Germany in the European Space Agency are in serious disagreement about whether to replace the Ariane 5 or upgrade it.

The French space agency, CNES, quietly backed by Europe’s Arianespace launch consortium, has argued that the current Ariane 5 heavy-lift vehicle has only a fragile hold on its current 50 percent commercial market share. Just as important, according to the French reasoning, is that the entire Ariane 5 system, including its ground infrastructure, is expensive to operate and likely to remain so. Because money is short in Europe, it would be preferable to move immediately to a next-generation vehicle that would carry payloads ranging from 2,500 kilograms to 6,000 kilograms — with an extension to 8,000 kilograms — into geostationary transfer orbit, one at a time. This modular vehicle ultimately would replace not only today’s Ariane 5, but also the Russian Soyuz rocket that is now operating from Europe’s Guiana Space Center in French Guiana.

Set against this reasoning are industrial policy issues raised by the German space agency, DLR, and by Astrium, which is Ariane 5’s prime contractor. They say Europe needs to complete development of an upgraded Ariane 5 — at a cost of about 1.4 billion euros ($1.8 billion) — before embarking on a decade-long development of an Ariane 6 whose cost and industrial work-share distribution are unknown. [emphasis mine]

It is very clear that ESA has recognized that once Falcon 9 becomes completely operational, it will be difficult to get anyone to buy tickets on the very expensive Ariane 5. From the article it appears the battle centers on the fact that the French realize this, while the Germans are willing to look the other way.

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A dispute over launch pricing between ArianeSpace, the launch company, and Globalstar, the satellite company.

8:37 am

A dispute over launch pricing between Arianespace, the launch company, and Globalstar, the satellite company.

The article only quotes an executive from Arianespace, who suggests Globalstar has been having troubles making payments. I wonder instead if maybe Globalstar has been balking at Arianespace’s prices (knowing there are other companies that can do it cheaper) and has been holding out for a price cut.

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Europe ponders choosing the design of the next generation Ariane rocket.

4:25 pm

Europe ponders the design choices for the next generation of their Ariane rocket.

Though the article above makes no mention of Falcon 9 and its very low launch costs, I have no doubt that Falcon 9 hovers like a ghost over the negotiations on what ESA will do with Ariane 5, a rocket that despite an excellent launch record has never really been able to make a profit due to high costs.

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European subsidies have put Arianespace in the black.

1:25 pm

European subsidies have put Arianespace in the black for 2011 and 2012.

The key quote however is this:

But ESA governments have made clear they are not happy having to cover losses, especially since the workhorse Ariane 5 rocket, introduced in the mid-1990s, is well past its teething stage and has conducted 47 consecutive launch successes. Its last failure was in late 2002.

Arianespace has dominated the commercial launch market in recent years, yet can’t make a profit. In this case, however, I suspect that if the company lost its subsides it would somehow find a way to finally reduce its budget.

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Europe successfully launched its third unmanned freighter to ISS early this morning.

2:14 am

Europe successfully launched its third unmanned freighter to ISS early this morning.

The 13-ton cargo freighter is loaded with about 7.2 tons of supplies, including food, water, clothing, experiments and fuel for the space station, according to NASA. The unmanned ATV-3 is the heaviest load of cargo ever delivered to the station by a robotic spacecraft, ESA officials said in a statement.

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ArianeSpace will make a profit in 2011, the first time in three years

1:15 pm

ArianeSpace will make a profit in 2011, the first time in three years.

Helped by the two Soyuz campaigns, which occurred in October and December, Arianespace in 2011 apparently averted a third consecutive year of losses. Its financial accounts are not finalized until June, but Le Gall said the company expects to report a slight profit on about 985 million euros in revenue.

In other words, it was the addition of the Russian low-cost Soyuz rocket to their fleet that helped avoid another year’s loss. This doesn’t reflect well on the profitability of the Ariane 5 rocket.

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A new Arianespace rocket

10:00 pm

A new Arianespace rocket starts its journey to French Guiana.

This first launch, the Vega qualification flight, is planned for January 2012 and will pave the way for five missions that aim to demonstrate the system’s flexibility. . . . Vega is compatible with payload masses ranging from 300 kg to 2500 kg, depending on the type and altitude of the orbit required by the customers. The benchmark is for 1500 kg into a 700 km-altitude polar orbit.

This rocket is comparable to SpaceX’s now discontinued Falcon 1, though it can put more payload into orbit.

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