Rob Peckham, CEO, Sea Launch
Sea Launch had a rough start in 2008 with the January launch failure that destroyed the NSS-8 satellite. Since then, the company has been working hard toward a return to flight in November. Sea Launch CEO Rob Peckham talks to Via Satellite Associate Editor Mark Holmes about the impact of the failure and why he is optimistic for the future of Sea Launch.
Via Satellite: How would you assess the launch services market and your company’s performance?
Peckham: I look at the overall commercial launch services market as being upbeat. We are finally climbing back up the hill from where this commercial market rolled years ago. I think overall this market is very positive and healthy.
I am extremely proud of the performance of this company over the last year. We started off the year with an unsuccessful launch, and we have recovered from that and we are completely on schedule. While we were ready to resume launch operations in October, we are currently preparing for our next launch in November due to a delay in spacecraft arrival. We have signed two new contracts during the course of the year while we have been focused on our repair and recertification efforts.
Via Satellite: What lessons can the company learn from your launch failure?
Peckham: I don’t think this will impact our ability to get future business. In the days immediately after our failure, the outpouring of support from our customers and the industry as a whole was heartwarming. This is a difficult industry. I think just by virtue of the fact we signed up two new contracts while we were in our repair and recertification process is testimony to the fact that this is not going to impact our ability to get future business. In light of lessons the company can learn, obviously, there is room for improvement in every launcher, in every piece of launch operations and we will continue to strive for improvement across the board. We are taking what we are learning and applying it to becoming more effective and efficient in what we do.
Via Satellite: How many contracts are you looking to win in 2007? Do you expect the number of contracts available to increase in 2008?
Peckham: We have won two contracts, and we are actively participating in a number of other competitions, which may or may not be concluded by the end of the year. I don’t believe the number of contracts will increase in 2008. I think it will stay around the same as this year. We are going to find ourselves in an evening out period where the number of satellites that need to be launched are going to become more aligned with the number of launch opportunities that there are commercially. I really believe we are going to plateau before whatever new application will cause greater launch demand and then the market will respond accordingly with supply.
Via Satellite: How would you assess the state of launch prices?
Peckham: Every time I pick up an industry periodical, I chuckle when I read that launch prices are going through the roof. Launch prices are just going back to where they were eight years ago, and we are not there yet. At the same time, my trusted partners in the CIS — Ukraine and Russia — have seen a huge measure of inflation in not only their labor but their raw material costs as well, so the costs for us in particular — and I imagine this applies to our competitors — are going up almost as fast as the prices are going up.
Via Satellite: Do you think the way FSS operators do deals with launch service providers will change?
Peckham: SES is very innovative in the way they think and operate. Do I see other companies doing that? One of the pieces of this is the consolidation of the end user consolidation. That has not only strengthened our market, but I believe it has legitimized it, knowing they are going to be there tomorrow. They have more buying power so they can buy more satellites that they need to launch. We were an active participant in the SES procurement process; one that had been ongoing for a number of years.
At the end of the day, the Sea Launch Company was not willing to provide the schedule flexibility that SES so coveted because of our commitment to the whole breadth and spectrum of customers. That said, SES is going to have a lot more launch requirements and opportunities than they signed up for. I put Intelsat in that same position of having the need for multiple launches. Will Intelsat pursue the same road? Perhaps, but only if it makes sense.
Via Satellite: Considering SES is a huge customer, why would you not to provide them with the launch flexibility they desired?
Peckham: There would have been little if any room for other companies on our manifest. That is not to say that we do not have a good relationship with SES. We talk all the time. I am confident we will be launching satellites for SES well into the future. We chose not to impact the commitment we have made to our customers and what our future expected commitments will be. One of those customers is SES, and we will keep the commitments we have made to them. We are at a place with SES in which we are comfortable.
Via Satellite: What was your reaction to the recent Proton launch failure?
Peckham: Launching is a risky business. Anytime there is a failure in this business it has an impact on everyone involved — the satellite manufacturers, owners, launch services providers, insurers, etcetera. With the growing demand for launch services at this time and — as with the Sea Launch failure in January — this Proton failure is challenging for companies that need to get satellites to orbit in a timely manner. This failure is sending many of us back to the scheduling table, but again, it’s the nature of the business. Any failure is a very tough thing.
Via Satellite: With more competition than ever before, are there enough deals out there for everybody?
Peckham: I think the commercial launch industry has three principle players, Arianespace, Sea Launch and ILS. With those three players, there is an equilibrium between supply and demand. There is enough business for those three companies as well as opportunities for national interest players such as the Delta and Atlas and the H2A out of Japan. If demand for launchers increases as a result of increased demand for satellite space-based communications, there are established companies that will address that and there are future launch providers that are vying for a place in the market. The market will determine whether those businesses succeed or fail.
Via Satellite: With more players looking to get involved in this market from countries such as India, what impact will this have on established launch providers?
Peckham: We are at a high point in the market where other providers are looking to enter this market, such as India with GSLV and Space X. What impact will that have? I don’t think that will have any impact on Sea Launch, but the market will determine that.