On September 1, a Falcon 9 rocket owned by SpaceX blew up when a static engine test was about to be held at Cape Canaveral. The rocket was being tested in a ‘dress rehearsal’ for a planned September 3 launch of its satellite passenger, the Amos-6 craft, built by Israel Aerospace Industries (IAI) on behalf of satellite operator Spacecom. The Amos-6 satellite was destroyed in the conflagration – described as a “fast fire” by SpaceX. Amos-6 had Facebook as a key client.
The disaster leaves almost every one of the key players in a mess. First problem, the satellite was not insured. The insurance was due to kick in upon lift-off – normally the most dangerous time for a launch. SpaceX carried its own insurance coverage, so the satellite’s owners will be compensated for the loss. SpaceX will get back its $39 million (€34.9m) insurance premium.
However, it has now emerged that some more experienced satellite operators do not permit their satellites to be in position atop a rocket when engine such pre-launch tests are carried out. Vanessa O’Connor, spokeswoman for Eutelsat told CNN on September 2 that it does not allow its satellites to be in place during pre-launch engine tests.
Spacecom is also in a mess because it was about to be bought by a Chinese billionaire for $285 million, but the proposed sale was contingent on the launch taking place, and thus the whole sale process to Beijing Xinwei Technology Group is now in jeopardy. Spacecom’s owners (Bezeq Israel Telecom) wanted Amos-6 to provide capacity for its ‘YES’ DTH operation, and stated September 4 that its DTH operation could be impacted by the loss of Amos-6. Currently ‘YES’ uses Amos-2 and Amos-3 for its transmission bandwidth.
Spacecom and the satellite’s builder are reportedly seeking a full insurance pay-out from SpaceX’s insurers – and according to Israeli news sources on Sunday September 4 – are also seeking a ‘free’ launch from SpaceX worth some $50-$60 million or $50 million in cash compensation. No doubt this will lead to the lawyers coming in and examining the small print of the contract and everyone losing!
Spacecom says that it is financially sound, and is still in discussions with the Chinese potential buyers. It was also looking to speedily replace Amos-6 and IAI’s director-general Yossi Weiss told Israeli journalists that it could build a new satellite within two years.
Clients who had booked space on Amos-6 could use the older Amos-3 craft. Spacecom’s share price crashed 9 per cent on Thursday, and – despite the Tel Aviv market being closed on Friday – there was an implied fall of a further 49 per cent, and a net fall of 32.7 per cent since Thursday evening confirmed on Monday morning.
Spacecom is reportedly seeking a $205 million insurance compensation from IAI, which built the satellite. But Spacecom is also in debt to the tune of $232 million to bond-holders with Amos-6 as collateral, and these bondholders were entitled to an immediate redemption in the event of the total loss of the satellite.
SpaceX is in a mess because its reputation has been damaged, and because it will now have to conduct exhaustive – and delaying – examinations into the ‘anomaly’ and no further launches will take place until those results are in, and any potential problems remedied. Its Accident Investigation Team will be supervised by the Federal Aviation Administration. They have some 3,000 channels of telemetry to investigate compressed into 35-55 milliseconds of data, according to SpaceX.
SpaceX will also have to fully refurbish the damaged primary launch pad 40 at Cape Canaveral, and prepare at least one other in order (probably Pad 39A) to re-commence launches once the accident investigation is wrapped. It also means that contracted NASA cargo launches to the International Space Station will be delayed. Pad 39A is unlikely to be ready much before November, forcing delays for the eight expected commercial launches planned for the rest of this year. This will also delay to planned re-use of a returned rocket for client SES and its SES-10 satellite.
Eutelsat is NOT in a mess despite losing a valuable contract with Facebook worth around €5 million this year, €15 million in 2017, and €25-30 million in 2018. Investors think there is now a fair chance that Facebook will take capacity on a Eutelsat satellite to supply bandwidth over Africa. Eutelsat’s shares rose almost €1 on Friday September 2.
Facebook is also not seriously impacted. There are any number of potential suppliers of bandwidth over Africa. Facebook boss Mark Zuckerberg, who is visiting Africa, said in a statement: “As I’m here in Africa, I’m deeply disappointed to hear that SpaceX’s launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent.”