PARIS - Major commercial satellite fleet operators said the June 22 Chapter 11 bankruptcy filing by Sea Launch Co. LLC is bad news for the health of the industry despite repeated claims by some launch service providers that the global market is oversupplied with rockets.
Industry officials said that while the oversupply situation often detailed by Arianespace Chief Executive Jean-Yves Le Gall and International Launch Services (ILS) President Frank McKenna is technically true, it is often at variance with the market’s day-to-day reality.
Adding up the raw numbers for launchers based in the United States, Russia, Europe, Japan, China and India does suggest that too many launch vehicles are chasing too few commercial customers — one reason why some commercial rocket operators have never generated much profit.But the two principal U.S. rockets, Atlas and Delta, have in effect removed themselves from the market to focus on more profitable U.S. government business.
China’s Long March vehicle, which has demonstrated its technical reliability in the past decade, continues to be subject to a de facto ban from the commercial market because of a U.S. policy prohibiting U.S.-built satellites and satellite components from being shipped to China.
Japan’s H-2A rocket cannot lift the heavier commercial telecommunications satellites and in any event is restricted to limited launch periods each year.
India’s rockets have won some commercial business, but it will not be until the upgraded Geostationary Satellite Launch Vehicle has been flying regularly before it can attract the bulk of the commercial market, which is to launch satellites weighing more than 4,000 kilograms each into geostationary transfer orbit. Similarly, Space Exploration Technologies of Hawthorne, Calif., is positioning its future Falcon 9 vehicle for the commercial market, but the market is still awaiting the rocket’s first flight.
The result has been that, for many commercial satellite competitions, it is only Reston, Va.-based ILS, the Arianespace consortium of Evry, France, and Long Beach, Calif.-based Sea Launch that are able to field a serious bid.
Launch service concerns
All the major satellite fleet operators in recent months have voiced concerns about being able to secure launch services on a timely basis. They all remember the weeks following Sea Launch’s January 2007 on-pad rocket failure, which sent commercial satellite operators the world over scrambling to secure launch slots in what one launch services provider referred to as “a panic.”
Romain Bausch, chairman of SES of Luxembourg, the world’s largest commercial satellite operator in terms of annual revenue, has said launch-service availability remains the single biggest near-term threat to the stability of the satellite telecommunications industry.
David McGlade, chief executive of Intelsat of Bermuda and Washington, the second-largest commercial operator, has made similar comments and recently was obliged to pay Sea Launch’s Russian partners additional cash to assure that previously contracted launches would actually occur. McGlade has defended the move, which has trimmed Intelsat’s earnings this year, as being necessary to maintain a robust launch services sector.
Giuliano Berretta, chief executive of Eutelsat of Paris, has gone out of his way to stimulate the market entry of new launch services suppliers. Eutelsat was the first operator to use the Lockheed Martin Atlas 5 and Boeing Delta 4 rockets, placing commercial telecommunications satellites on both vehicles’ inaugural flights in 2002.
More recently, Eutelsat has booked a 2010 launch with China’s Long March, saying the Chinese have made the kind of schedule guarantees that other launch providers cannot make.
Sea Launch comeback possible
Asked to comment specifically on the Sea Launch bankruptcy filing, satellite operators all said they assume Sea Launch will find a way to emerge from the process and continue operations.
“Having a robust pool of launch service providers is essential to the satellite industry,” Intelsat spokeswoman Dianne J. VanBeber said. “The launch sector should have broader participation — from the U.S., Japan and India to name a few. We have demonstrated our commitment to keeping the launch industry healthy, and to promoting a global pool of providers.”
Christopher McLaughlin, spokesman for London-based satellite operator Inmarsat, said the company relied on Sea Launch in late 2005 to launch the second Inmarsat 4 satellite after Inmarsat could not find suitable launch dates from ILS and Arianespace.
“We were very happy to have them there and available for us,” McLaughlin said.
Eutelsat spokeswoman Vanessa O’Connor said Eutelsat seeks to maintain the widest possible supplier base among launch service providers. “That has always been our policy,” she said.
SES spokesman Yves Feltes said SES has no Sea Launch missions on order but that “it is in our interest to have as many launch options available as possible. So the [bankruptcy] of Sea Launch is certainly not good news. At least the French now seem to be determined to keep Ariane 5 and 6 available for commercial launches.”
Feltes was referring to French President Nicolas Sarkozy’s June 20 statement during the Paris Air Show that urged European governments to begin, in 2011, design of a rocket to succeed Ariane 5.
But a recent French government report for French Prime Minister Francois Fillon concluded that the successor to today’s Ariane 5 rocket should limit itself to carrying one 6,000-kilogram satellite at a time into orbit.
After Ariane 5, the report concludes, Arianespace should seek to perform only the minimum number of commercial launches needed to sustain the rocket’s reliability for the European governments who will pay for its development. Seeking commercial market share above that, the report concludes, is not worth the investment.
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