The Evolution of a Launch Giant
A look at how Arianespace is modernizing, and how it aims to be as successful over the next decades as it has been previously.
Jean-Michel Desobeau will never forget the Christmas of 1979. In the run-up to the holidays, Arianespace was working against the clock to launch the Ariane 1 rocket. It had become a matter of pride to successfully launch the vehicle in the 1970s and not have the launch drag into the ‘80s. One or two aborted launches in mid-December meant engineers had to work 24/7 to make a successful launch happen. On Dec. 24, the first successful launch of Ariane 1 took place and a new era in space communications was born.
Desobeau talks wistfully about those days when engineers were infused “with the pioneer spirit” and an opportunity to be a part of something big. Desobeau had been a young teacher eager to build a career in space. He had been a teacher in French Guiana in the early 1970s as part of his national service, becoming a regular among the new space community on the island. Almost 40 years later, Desobeau is now the quality deputy vice president of Arianespace and offers unique insights into the evolution of a European space giant. He is a link to Arianespace’s past as well as their future.
From the new kid on the block in the 1970s, Arianespace has become the standard bearer in the launch services industry, noted for its reliability in a business where other companies have struggled in recent years. But Arianespace cannot rest on its laurels. While it was the pioneer in the 1970s, with engineers like Desobeau making history, it is now the company others are trying to overtake.
I am in Paris to see how this European space success story is adapting to a changing industry. First, I visit the Les Mureaux Launch Vehicle Integration Facility on the outskirts of Paris. It is a bright sunny day, which contrasts with stories of floods back in the United Kingdom. The facility is impressive as is the number of rockets being worked on. The smell of technology is all around, as programs from all over the world are being developed.
We go to Vernon next to see the manufacturing of rocket engines. This facility is set back in the forests, and would not look out of place in a Cold War movie — almost hidden from view and set deep in the woods. Officials from Snecma give us a tour and talk about their new generation of rocket engines such as the Vinci, which aim to remain at the cutting edge of technology. Even though I should not be surprised, the size and complexity of the engines is mind-blowing. It is hard not to have full admiration for those who work on such amazing pieces of technology.
Officials tell us stories about the history of the facility, and how French and German rocket engineers worked here side by side after World War II, when the space race began to accelerate. A facility like this is full of paradoxes: engineers are working on some of the most cutting edge technologies around, yet the facility has a long history from the ‘50s and ‘60s when the space industry felt like the center of the Earth.
Arianespace’s New Leader
Despite covering the space industry for many years, this is my first actual visit to Arianespace’s head office in Evry, where I will get to sit down with a number of their top executives and talk about the road ahead for the company. It is a fascinating insight into arguably a major European success story in space.
Stéphane Israël, Arianespace’s new CEO, had just returned from Riyadh, Saudi Arabia, on his first visit to Arabsat’s home country. He tells me how much he enjoyed the visit and the opportunity to see a new country. One of his first priorities when taking the job with Arianespace was to see as many companies as he could, and he has made sure to keep up with that priority. He says he has travelled more in the past eight months than he has in the past eight years.
His job is not easy; he must keep Arianespace at the top of its game in all sectors of the launch services market. He admits that 2013 “was not as good as expected” due to the unavailability of several satellites, which were initially part of the company’s launch manifest.
“No less than five launch opportunities vanished because of payload delays, three on Soyuz and two on Ariane 5. As a result, our revenues will be slightly below €1 billion ($1.4 billion) in 2013, reflecting the fact that we made seven perfect launches from the Guiana Space Center — four with Ariane 5, two with Soyuz and one with Vega,” Israël says. “Nevertheless, and partly because of these postponements, our order book for 2014 enables us to consider up to 12 launch opportunities, which would mean, if the satellites are available, one launch every month on average.”
The company has ambitious targets this year: to break its previous record of 10 launches in a year, established in 2012, Israël says. With 12 launches in 2014, revenues are likely to also be their highest ever.
“[For 2014,] we anticipate a stable commercial market with more than 20 geostationary satellite launch orders. However, we forecast an increase in the number of small satellite programs versus large satellite programs, which is the reverse of what we have been confronted with for the last two years,” Israël says. “Regarding Ariane 5, after a record year, which saw the signature of 15 commercial launch contracts amounting to a market share over 60 percent, our goal is to complement our backlog with the small satellites that will be launched with all the large ones that we have already in our order book. Regarding Soyuz, the near future in terms of orders is more related to institutional missions, e.g., defense and scientific missions, and we are currently contemplating between one and three orders in 2014.”
In 2013, Arianespace signed three additional commercial launch contracts for Vega, and Israël says they expect to see a few more this year. Added to the launch of DZZ HR for Kazakhstan, which Arianespace plans to deliver this spring, Israël believes the Vega can perform well in the Earth observation arena.
Jacques Breton, Arianespace’s SVP of sales, responsible for making sure the company continues to bring in a number of lucrative new contracts, sees Asia and the Middle East as a hot market for Arianespace in 2014. He says there are currently many projects being discussed in these regions as well as in Europe and the Americas.
“It is finally a worldwide market,” Breton says. “The first half of the year will be dedicated to Asia. The second half will be dedicated to Middle East, Europe and the Americas. In Asia, we see today, if I add up all the programs with Japan, Indonesia and Korea, there are at least half a dozen programs there. The question is whether they will all materialize this year, or will some of them take longer.”
Breton also talks about a movement toward electric propulsion, which he sees becoming a commercial reality. “I think people are ready to accept it; companies are ready to embark on electric propulsion whether full electric propulsion or hybrid — it can be a combination. Electric propulsion with low-cost prices is something we see driving the market today,” Breton says. “A report we have done indicates 18 FSS operators are considering electric propulsion. They are seeing it as an option. You can go to a full liquid satellite; you can also go to a full electric satellite. However, the electric propulsion technology has not been demonstrated effectively, and also it will take time to get there. It could take two to six months. Companies are beginning to think hybrid. They are thinking of using chemical propulsion, and then finalizing with electric propulsion.”
A key factor for any company is to innovate to stay ahead. In terms of its capital expenditure plans going forward, I am intrigued to know what Arianespace’s plans are to continue at the forefront of the industry. “In December last year, Arianespace decided to build a new propellant loading hall (NBR) at the Soyuz Launch Complex in the Guiana Space Center. This facility will be used to fill the Soyuz upper stage with propellants. It will thus enable us to free the current hall for satellite preparation,” Israël says. “In total, we will thus have three propellant loading halls fully available for our customers, instead of two right now, hence increasing our launch capacity and flexibility at the CSG. We plan to have the NBR operational by the first semester of 2015.”
Another plan Israël shares is Arianespace’s development program endorsed by the European Space Agency (ESA), which started last year. This program is aimed at increasing the payload volume beneath the Ariane 5 ECA fairing without incurring any performance loss. “This capability should be proposed to our customers for flights occurring in the second half of 2015 and beyond,” Israël adds. “It responds to the trend of satellite size increases that we have observed in the commercial market.”
Louis Laurent, SVP of programs at Arianespace, has perhaps one of the toughest jobs at the company. He is, in essence, the glue that makes Arianespace’s ambitions realized. The main challenge for Laurent and his team this year is to perform the 12 launches planned for 2014. “This is a level of activity we have never reached,” he says. “It is challenging because there are different launchers.”
Laurent outlines the company’s objectives to improve overall efficiency. “We want to optimize the time between two launches on different systems. Last year, we did three weeks between two launches. Today, we are able to perform this in two weeks. We want to continue this improvement,” he says. “Our target is to work with six Ariane, three Soyuz and three Vega. We think we have the market for this … we will work with this objective.”
Ariane 5 MR and Ariane 6
Bringing new launch vehicles to market is right on the horizon now for Arianespace. The Ariane 5 ME is set to see its first scheduled flight in 2018 with higher performance and larger payload volume available beneath its fairing. This upgrade will significantly increase the flexibility Arianespace’s dual launch strategy.
“It will indeed enable us to pair a large satellite with a medium one, moving us away from the necessity of pairing a large satellite with a small one as is the case today,” Israël says. “In addition, Ariane 5ME will feature a re-ignitable upper stage cryogenic engine, hence optimizing the customization of mission profiles to geostationary transfer orbit for the benefit of future all-electric-propulsion satellites. And all these improvements at the same cost as for Ariane 5ECA.”
The first flight of the Ariane 6 is scheduled to take place in 2021, followed by a transition period with Ariane 5 so that Ariane 6 can be in full swing during the next decade. “From a commercial standpoint, the main goal of this new vehicle is to improve cost competitiveness, and Arianespace fully concurs with this objective,” Israël adds. “At each step of the development, there should be no deviation from the cost target that has been assigned to this launch system, i.e. €70 million ($96.8 million) per launch on a recurring basis.”
However, Arianespace’s roadmap is in the hands of the ESA together with the European launch industry. My feeling from talking to Israël is that like most CEOs operating in a more competitive market than ever, he wants both Ariane 5 ME and Ariane 6 as soon as they are ready.
“Our assumption is that the future launcher should be competitive both for small, medium and big satellites, because we expect a balanced mix between these categories of satellites thanks to the penetration of electric propulsion,” he adds. “So, both institutions and industry are willing to listen to our advice, and our word is primarily the word of our customers, whom we are the only ones in Europe to be in permanent contact with.”
The Elephant in the Room
SpaceX is now a reality; it has launched two commercial satellites. I suspect Israël is now fed up with journalists like me asking him questions on the impact of SpaceX. But it is clear Arianespace is preparing to adapt, particularly in the small satellite market. There is a sense that the company will flex its muscles and bring about changes in price that could surprise.
“Arianespace is in the process of working on its prices for small satellites. This will be beneficial to our customers and made possible by several actions to increase our competitiveness, such as the cost reduction we obtained from Airbus Defence & Space in the frame of the last Ariane 5 batch procurement contract. This is the chief lesson of competition: you must continuously improve yourself,” Israël says.
We end the day at a fashionable French restaurant in Paris, where the conversation ranges from the State Dinner involving President Hollande in Washington, D.C., to the mechanics of reusable rockets. I also eat pigeon for the first time, which was surprisingly flavorful.
Desobeau is an important link to Arianespace’s past and we all listen intently to his stories of life in the ‘70s. It was back then where the pioneering spirit came to the forefront and has now come all the way into its fifth decade. It is a wonderful story of our industry and, while it is great to talk about the market of today and the likes of SpaceX and Arianespace, the industry as a whole owes a great debt to people like Desobeau. For Arianespace to succeed going forward, it will need to continue to use that spirit from the 1970s to fashion a successful future. It is a challenge that Israël is looking forward to.
“Arianespace invented the commercial launch business in the 1980s and has been the space transportation leader for three decades, continuously, despite the changes in the competitive environment,” he says. “We compete for every available contract and believe that our quality, transparency and ability to innovate will still carry us in the future. Of course, this does not mean that we should underestimate our competitors, but rather that we are confident in our ability to face them.”