Aviation Week: Arianespace Facing Shake-Up

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http://m.aviationweek.com/space/opinion-arianespace-facing-shake-compete-spacex

In the coming months, Europes space community will have to admit it must prepare to pay a high price for a major strategic error.

For decades, European Space Agency (ESA)-member states and industrial contractors maintained an outdated structure to develop, produce and market the heavy-lift Ariane booster. Europe acquired a largely dominant market share, despite the former USSRs ambitions. Then came SpaceX, a brand-new player, which is simply revolutionizing the commercial space launch scene.

In June, it became obvious that Europe has made a major collective error, underestimating SpaceXs capability to successfully market commercial launches at a fraction of Arianes costs. Today everyone is trying hard to maximize the impact of an Airbus Group-Safran initiative to form a joint venture and take control of the Ariane program. Jointly, the two groups own two-thirds of the heavy-lift booster and this is most probably just the beginning of a far-reaching consolidation strategy. Today French space agency CNES retains a 34.6% stake in Arianespace, the launchers multinational prime contractor, but logically should abandon that role, established by Europes space pioneers in the 1970s.

In other words, Ariane, despite an excellent reliability record, suddenly appears too complex and far too expensive. Unless it reacts quickly, the company could be seriously endangered by its new California-based competitor.

Arianespace long enjoyed secure revenues, was driven by talented engineers and implicitly took its supremacy for granted. Now comes the wake-up call, exacerbated by the Airbus Groups and Safrans joint decision to respond to the new threat. Doing his best to put on a good show, Arianespace Chairman/CEO Stephane Israel says the planned joint venture is a major milestone for the European [space] launcher industry. He acknowledges the need to boost the Ariane programs competitiveness and, to achieve such a priority goal, to simplify an outdated industrial structure. This was long overdue.

In June, Genevieve Fioraso, the French minister in charge of space, candidly admitted the looming U.S. competition had been underestimated. And according to Gerard Brachet, a former head of CNES, the consolidation initiative is good news. Such an industrial restructuring should have taken place a long time ago to overhaul a fragmented production arrangement. Ariane subassemblies are manufactured at 20 industrial sites around Europe.

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The Airbus Groups chairman/CEO, Tom Enders, and his Safran counterpart, Jean-Pierre Herteman, when unveiling their plan to rapidly establish a space joint venture, used highly diplomatic language, but the reality is significantly harder: This is obviously the first phase of a major consolidation move involving job cuts.

Airbus Group and Safran top executives will seek to assert their freedom of action and, although acknowledging the need to work closely with ESA, will more than ever carefully avoid political interference. This will not be an easy goal, as shown at the event when their agreement was unveiled: The meeting took place at the Elysee Palace and French President Francois Hollande was the star of the show. This says it all.

Now will come technical disagreements, such as solid propulsion versus liquid fuel. In December, ESA member states space ministers will meet to review the Ariane programs latest development, including the upgraded 5ME derivative and the envisioned next-generation Ariane 6. Divergent views on technicalities are expected to make discussions difficult, while participants will certainly still be shaken up by the consolidation-related news. The wake-up call is salutary, but devastating.

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The satellite launch market disruption continues....

The major satellite makers are putting the heat on Arianespace/ESA to lower launch costs by speeding up Ariane 6,

The Worlds Biggest Satellite Fleet Operators Want Europe To Build Ariane 6 by 2019

PARIS A group including the worlds largest commercial satellite fleet operators has written the European Space Agency urging that it approve a new-generation Ariane 6 in time for a first launch in 2019 or face relegating the European rocket to commercial also-ran status.

The letter to ESA Director Jean-Jacques Dordain makes clear that these fleet operators have a ho-hum view of the Ariane 5 ME vehicle that ESA governments are weighing alongside a new-generation Ariane 6.

Given the advent of electric propulsion and the dramatic launch-cost reduction offered by Space Exploration Technologies Corp., the operators say, the new Ariane 6 needs to be in service by 2019 or face the risk that Europes Arianespace launch consortium will be permanently sidelined.

The letter was signed by six members of the European Satellite Operators Association. Signatories included the chief executives of Intelsat, SES, Eutelsat, Inmarsat, Hispasat and HellasSat.

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Which is going to be tough because of France vs. Germany infighting over what launcher to build, possibly causing the Ministerial meetings to be postponed,

http://www.spacenews.com/article/launch-report/41770esa-ministerial-in-doubt-as-france-germany-remain-far-apart-on-future

ESA Ministerial in Doubt as France, Germany Remain Far Apart on Future Launcher

PARIS The French and German governments remain so far apart on a future space-launch policy for Europe that officials are now privately talking about canceling a December conference of European space ministers or stripping it of concrete decisions.

The basic division remains despite the German governments alignment with the French view that Europe needs a lower-cost rocket to maintain its viability in the commercial market which in turn provides European governments with a viable launch industry.

Despite the consensus over the longer term, the two sides remain split on whether European Space Agency governments should spend 1.2 billion euros ($1.6 billion) to complete work on a new upper stage for the existing Ariane 5 rocket, which could fly in 2018-2019, or abandon the upgrade to focus spending on a new Ariane 6 rocket, whose development would cost upwards of 3 billion euros over 7-8 years.

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