The giant Airbus Group (which used to be known as EADS) has within it a division that manufactures the giant Ariane 5 rockets as part of its Astrium operation which also builds communications satellites used by many of the world’s broadcasters.
Astrium received an outline contract last year to build 18 higher-capacity Ariane rockets for future use. It also launched 4 rockets, while Astrium delivered 6 expensive satellites into space. Astrium’s revenues last year, released February 26th, (and which also included some European Space Agency contracts) were €5.78 billion (down on 2012’s €5.81 billion) but with an improved EBIT at €347 million (2012, €311 million).
But there are worries for the Airbus Astrium division, not least the very real threat that lower-cost space rockets will seriously impact Arianespace’s share of the market. A few days ago satellite company SES’ CEO Romain Bausch said he wanted lower-cost launchers – and below $60 million per launch. SES has a 3-launch contract with Elon Musk’s SpaceX Corp and using its low-cost Falcon-9 rocket. SpaceX successfully launched SES-8 at the end of last year, and on January 6th it lifted Thaicom-6 satellite into orbit.
However, there’s more potential bad news in store for Arianespace. This is because there’s a trend in satellite building that embraces all-electric propulsion for a satellite. These tiny ION or Plasma engines need no ‘rocket fuel’ to get into their final geostationary orbit. Boeing is building a couple of these ION-propelled satellites for major satellite operators, including Eutelsat.
An ION engine takes a few months to get into its final orbit (whereas a conventionally fuelled satellite will make the journey in a few days) but the ION satellite weighs barely half of the fuelled versions, and thus there’s a massive saving in launch costs. Moreover, satellite operators do not need the heavy-lifting capability – and expense – of an Arianespace rocket
There’s another benefit for satellite builders and operators. Smaller, lighter satellites do not need to be paired with another satellite on an Ariane 5 rocket which often causes delays to both ‘passengers’ should one of them be late for any reason.
To counter these challenges a new, lightweight Ariane 6 version is being developed that will efficiently deliver a single 6-tonnes satellite into space, whether conventionally fuelled or powered by ION engines. This new Ariane will come on stream in about 2020. However, there are also pressures from new launch manufacturers, from Japan and India, which could handle lighter-weight satellites…
And then there’s Elon Musk’s SpaceX which has consistently argued for low-cost, reusable rockets, and where satellite launching is a routine – but safe – operation. These assorted challenges mean that Arianespace itself is under extreme pressure to modify its business in order to hold onto market share.