Commercial launchers retool and revise business strategies to adapt to changing industry dynamics
Launch vehicle providers in Japan, the U.S., Europe and Russia are modifying the hardware on their commercial offers and adapting business models in response to low-cost market entrants, new satellite technologies and reduced government demand.
In Europe, commercial launch consortium Arianespace says it wants access to the U.S. government market from which it is currently excluded. Arianespace markets dual launches of commercial satellites aboard the heavy-lift Ariane 5 and must now compete with the low-cost(SpaceX) Falcon 9 for spacecraft sized to ride in the lower position on the Ariane 5 ECA. This month the company announced plans to consider Americanizing the rocket with U.S. hardware in return for winning access to the U.S. market.
“It may not be envisaged today, but it is a matter of fact that, regarding reliability and cost-competitiveness, we are sure we could deliver to the U.S. civil and military markets the best solutions,” Arianespace Chairman and CEO Stephane Israel told Aviation Week on the sidelines of the Satellite 2014 conference here last week. “If it were the case that this market was to open, we would be ready to think outside of the box.”
Today, sensitive U.S. government payloads are launched exclusively on United Launch Alliance (ULA) Delta 4 and Atlas 5 rockets. SpaceX, which recently proved that the Falcon 9 can loft communications satellites weighing 3,500 kg (7,716 lb.) to supersynchronous transfer orbit, is hoping the U.S. Air Force will approve certification of the rocket this year.
But since Arianespace is already losing small and potentially midsize commercial customers to the Falcon 9—including the launch of three second-generation radar surveillance spacecraft in development for the German government—Israel says a third competitor should be an option. “As it seems there is now a willingness to have more competition, three is better than two,” he said.
Meanwhile, U.S. rocket builders are also looking abroad. Declining government business and new competition from SpaceX are drivingCommercial Launch Services to pursue more international customers for the Atlas 5, a highly reliable but extremely expensive rocket whose price has kept Lockheed on the margins of the commercial launch business. In an effort to step up its game, the company says it will offer a new “refund or reflight” policy in all its future non-U.S. government contracts, according to Lockheed Martin Commercial Launch Services President Robert Cleave, thereby saving commercial satellite operators the price of launch vehicle insurance.
“I think people are optimizing for SpaceX's program right now because of the price point they're offering out there,” Cleave says.
In Japan, a new government space policy is encouraging hardware manufacturers to aggressively pursue export sales of the H-2A launcher, which is viewed as a reliable but expensive launch vehicle. In an effort to reduce its cost, H-2A prime contractor(MHI) has set its sights on a revamped rocket that by 2020 will be built for half the price of the current version, says Naohiko Abe, vice president and director of space systems business development.
Abe says H-2A recently won its first fully commercial export order to launch the Telestar-12 satellite for Telesat Canada by offering a cut-rate introductory price for an enhanced version of the H-2A rocket. “Our total proposal was accepted by Telesat, including finance, schedule, launch campaign and so on,” Abe says. “The launch vehicle will be the maiden flight of an H-2A enhancement, so we offered a special price and Telesat accepted the small risk.”
International Launch Services (ILS), which markets commercial missions of Russia's Proton M/Briz M rocket, says it is offering builders of relatively light-weight satellites, or those using light-weight all-electric designs, a launch configuration in which a satellite built by Russia's ISS Reshetnev would sit in the rocket's lower position and bear the load of a Western satellite sitting in the Proton's upper position.
ILS President Phil Slack says this scenario could put all-electric satellites closer to their final position than the current dual-launch configuration of the Falcon 9. The first Falcon 9 dual launch, slated for early 2015, will drop two new-built electric-propulsion spacecraft in an orbit from which they will require 6-8 months to reach their operational destination and begin generating revenue.
While Boeing's lightweight design offers the potential to lower launch costs, Lockheed Martin andDefense and Space are offering all-electric satellites that are somewhat heavier but offer more power and can reduce the time to reach geostationary orbit.
“We have a continuing emphasis on expanding our market as more spacecraft decrease in mass and are looking for more dual launch opportunities,” Slack says, adding that structural improvements to the Proton M/Briz M would enable the rocket to launch two such spacecraft weighing a combined 6,200 kg by 2016.
“Depending on mission design and mass, in many cases we can take them well on their way above GTO and significantly reduce the orbit-raising time frame,” Slack says. By mid-2016, Proton also would be flying a new stretched fairing, he says, although plans to expand the 4-meter-dia. (13-ft.) payload shroud to 5 meters have been shelved.
The ILS offer is further enhanced by the arrival of export-credit backing available through the new Export Insurance Agency of Russia (Exiar), which will operate similarly to France's Coface, according to Slack.
“For several years, we have been at a competitive disadvantage compared to Europe and the U.S. in that we had no offer of export financing,” Slack says. “There are deals where we were significantly—20 percent—lower than the competition, and we lost because of a lack of a viable export-financing forum.”
Exiar has $2.5 billion in deals, and authorization for more, with a pipeline worth $10 billion and currently no satellite projects, ILS says.
Sea Launch is also planning dual launches of lighter-weight satellites on the Russian Zenit-3SL, starting with a planned first flight of the AngolaSat and Energia-100 in the first half of 2016. Sea Launch emerged from bankruptcy in 2011 and is challenged by being the only commercial launch vehicle that is not backed by a government market. Majority-owned by Energia, a major Russian space hardware manufacturer, it is recovering and building up a hardware inventory to operate on a reduced frequency of 3-5 launches per year. Russian government officials have suggested Sea Launch might be better operated within Russian territorial waters, where it could launch Russian government satellites.
Sergey Gugkaev, incoming chief executive of Sea Launch, says the idea of moving his headquarters from Long Beach, Calif., and the company's equatorial launch base in the Pacific Ocean to a position east of Siberia has no real interest for Sea Launch, unless the move is accompanied by a Russian government agreement to make it eligible for federal missions.
“There are a number of political and government decisions that have to be made in order for this to happen,” Gugkaev says. “Our opinion is that if this event and this shareholding change would allow us to get more market share—for example, getting Russian satellites which we are now discussing with—then it would be a good thing for us. But just moving the operations from the U.S. just for the sake of political reasons—I don't see a lot of benefit.”