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Sea Launch Eyes Land Missions

By | October 27, 2003

      Sea Launch, an international joint venture led by Boeing [NYSE: BA], is tapping an additional revenue source by offering launches for medium-sized commercial satellites from the Baikonur Cosmodrome in Kazakhstan.

      The company will continue its bread-and-butter sea-based launches for large satellites from the equator, but its officials envision the medium-sized satellite market as a growth opportunity amid fierce competition and excessive capacity in the satellite launch market. An open question is whether much launch demand exists for medium-sized commercial satellites.

      The land-based venture, called Land Launch, will involve collaboration between Sea Launch and Russia’s Space International Services (SIS) to carry commercial satellites as a single payload, said Jim Maser, president and general manager of Sea Launch. The Land Launch system will use a version of the Zenit-3SL rocket to lift satellites in the 2,000 to 3,500 kilogram (4,409 to 7,716 pound) range to geosynchronous transfer orbit, and heavier payloads to inclined or lower orbits. In comparison, Boeing’s heavy Delta II can lift up to 2,142 kilograms (4,722 pounds), while the Sea Launch rocket launched from the equator carries payloads of between 4,000 to 6,000 kilograms (8,818 to 13,230 pounds).

      A two-stage configuration of the Land Launch rocket also could launch heavy payloads or multiple payloads to low-Earth orbits. Payloads and vehicles would be processed and launched from existing Zenit facilities at the Baikonur launch site.

      Sea Launch rival International Launch Services (ILS) has used the Russian-made Proton rocket to launch large commercial satellites from the Baikonur Cosmodrome.

      The only other launch service provider that caters to the medium-sized satellite market right now is Arianespace with its dual-manifest Ariane 5 capability, Maser said.

      Unneeded Capacity?

      “We see Land Launch bringing unneeded capacity to an already overcrowded launch marketplace,” said Clay Mowry, president of the Arianespace Inc., the U.S. arm of Arianespace. “It would indeed be competing in a very limited market segment. We see it as a very limited market segment of perhaps one to two satellites a year.”

      Maser pegged the potential market for medium-sized commercial missions at between two and four satellites a year. Even if this higher projection proves accurate, the market demand would be weak.

      In addition, competition in that market segment already exists and more could be on the way.

      Not only does the Ariane 5 carry medium-sized commercial satellites into orbit as part of multiple payload missions, Arianespace is also planning to use the Russian-made Soyuz rocket from the European Spaceport in Kourou, French Guiana. Those missions are scheduled to begin in 2006 to carry medium-sized scientific and government satellites that are not suited for the Ariane 5, Mowry said.

      In addition, Russia is working on developing its Angara rocket concept that could serve the same market later in the decade.

      Land Launch is expected to be ready for launches by the fourth quarter of 2005, using existing Zenit technology and infrastructure to minimize risk, cost and start-up time, Maser said. Sea Launch will provide commercial customers with mission management and the Boeing-led quality assurance and hardware acceptance procedures. SIS would be responsible for the actual launch operations.

      Boeing Launch Services (BLS) would market and sell Land Launch’s capability in addition to Sea Launch and Delta missions. The addition of Land Launch will enable Boeing Launch Services to offer a family of vehicles to meet various payload lift requirements, company officials said.

      In contrast to Mowry’s dim view of the medium-sized commercial satellite market, Maser said he and his Boeing colleagues see a market emerging for “smaller geosynchronous satellites.”

      In an interview with SATELLITE NEWS, Maser said, “We had been looking at a land-launch offering for the LEO [low-Earth-orbit] market but that niche evaporated. We now are seeing an emerging demand for medium-sized geosynchronous satellites. The reasoning is that some companies just don’t need a big satellite to fulfill a business plan.” Advantages of using a medium-sized satellite for an operator include reduced costs for the launch, the satellite and the insurance, Maser said.

      However, the insurance market typically is wary of new launch vehicles or those adapted from existing ones.

      Launches Sought

      “Land Launch would need several successful launches,” one insurance source said. “It will have a somewhat different configuration and launch in a new environment. [The first mission] will be considered a maiden flight of sorts. Until the vehicle is proven, underwriters would be cautious.”

      The price savings on a launch for a medium-sized operator could be in the range of $15 million, industry sources said. Intense competition has driven down the price of large commercial satellite launches to under $70 million. However, operators may be able to buy the launch of a medium-sized satellite for less than $50 million.

      “We see this as an opportunity to provide some growth,” Maser said. “It is not the linchpin in our strategy but we think the timing is right. It is a good way to expand our business.”

      Wilton, Conn.-based satellite operator PanAmSat [Nasdaq: SPOT] has ordered three medium-sized satellites and put one in orbit already. And other operators are looking at using medium-sized satellites too, Maser said.

      –Paul Dykewicz

      (Paula Korn, Sea Launch, 562/499-4729; Suzy Chambers, Arianespace, 202/628-3926; Jayne Schnaars, Boeing Launch Services, 714/372-2703)

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