ILS Roars To Fast Start In 2004
By Paul Dykewicz, PBI Media, LLC
International Launch Services (ILS), which markets the Atlas and Proton launch vehicles, is picking up the lion’s share of commercial launches so far this year and putting further pressure on its rivals in an overcrowded market.
The inevitable need for replacement satellites to replenish aging in-orbit spacecraft will lead to a fairly steady stream of roughly 15 commercial launches annually in the years ahead but the current number of commercial launch missions is not adequate to keep all the existing launchers busy. A shakeout already has occurred with The Boeing Co. [BA] repositioning its Delta IV rocket to focus on government customers and forgo the hotly competitive commercial launch market.
The intense competitiveness among the launchers is reflected by the different statistics that the representatives of each company offer to give the best possible impression of their own organization. The strong showing by ILS thus far in 2004 is documented by the list of contract wins attributed to the company by its fierce European rival, Arianespace. The list kept by Arianespace shows that ILS has won six contracts thus far in 2004, compared with the total of 11 commercial missions announced industry-wide.
Those numbers show that ILS has more than 50 percent of the commercial launch business so far this year. ILS officials indicate their company’s dominance this year is even more pronounced if two of two Jan. 6 contracts announced by Arianespace are shifted to 2003 when the deals to launch JSAT satellites were signed. If that change occurs, Arianespace is left with two contract wins for 2004 rather than the four awards it has announced so far this year.
ILS has amassed at least 55 percent of the commercial launch contracts signed during each of the past three years, Mark Albrecht, its president, told SATELLITE NEWS Senior Analyst and Senior Editor Paul Dykewicz. The momentum is only growing, he added.
“The first half of 2004 is not a new phenomenon but the acceleration of a trend,” Albrecht said.
Two of the strongest selling points for ILS are a strong track record of reliability for both the Atlas and Proton, along with competitive pricing. The Proton is one of the most reliable rockets in operation today and the Atlas family of launch vehicles had 72 successful missions in a row including last week’s launch of the AMC-11 satellite, Albrecht said.
ILS also has kept its prices low enough to win the bidding in a market place with competitors who are willing to take a haircut on their profit margins in exchange for gaining revenue to help cover their fixed costs.
For example, Sea Launch began operation as a persistent low bidder to win an initial wave of contracts but it has only garnered one award thus far in 2004. As an international joint venture of The Boeing Co. and partners in Russia, the Ukraine and Norway, Sea Launch is not allowed to compete for U.S. government launch contracts. That limitation puts additional pressure on Sea Launch to win commercial contracts. Sea Launch also requires 45 days in between missions, since it launches from a sea-based platform that must travel between its home base in Long Beach, Calif., and its launch position along the equator in the Pacific Ocean.
Arianespace once set the “gold standard” for reliability in the industry when it operated the venerable Ariane 4. However, the company’s switch to the next-generation Ariane 5 has included several launch failures. Insurers punish launch mistakes by charging higher prices to match the heightened risk of unproven rockets.
With a satellite, launch and insurance costing in the range of $250 million, the stakes are unquestionably high. The toll from a launch failure is even larger if the satellite was intended to become a source of new revenue rather than replace an existing satellite that still has enough useful life available to continue operating until another spacecraft can be launched and deployed to take its place.
Two other key advantages also exist for ILS, Albrecht said. ILS offers unparalleled flexibility to its customers by using both the Proton and the Atlas. In addition, ILS arguably is as good or better than its rivals in meeting the scheduling needs of its customers.
Regardless of the reasons, ILS is setting the pace for contract wins in 2004 and it finished 2003 with a flurry. Mike Jensen, vice president of program management and technical operations at ILS, said his company has performed seven launches in the past seven months. An Atlas rocket has performed six of those missions.
During the next three months, ILS has four missions scheduled. Three of them are on Proton rockets, while an Atlas will handle the other one.
“It is an incredible pace we’re working with these two launch service products that ILS provides,” Jensen said. The AMC-11 launch last week marked the fifth mission for ILS thus far in 2004. It also was the fourth Atlas launch of 2004, he added.
The AMC-11 mission also was the last commercial launch of an Atlas IIAS rocket. The final mission of the Atlas 2AS is scheduled to be a government mission later this year. Despite the lineage of the Atlas IIAS, Jensen said nothing is taken for granted.
“We treat each flight as though it was a maiden flight,” Jensen said.
With the track record for reliability and growing market share that ILS has achieved through the Atlas and Proton rockets, who could disagree with that approach?
Paul Dykewicz is the senior analyst and senior editor of Satellite News. He can be reached by phone, 301/354-1769, or by e-mail, email@example.com.