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Arianespace Seeks Government Subsidies

By | July 3, 2002

      For the past two years, French launch service provider Arianespace has recorded losses due to a slump in the commercial launch market and stiff competition from lower-cost Russian launchers. As a result, the company and its industrial partners are being forced to take drastic measures to remain competitive.

      To maintain market share, Arianespace wants the next batch of Ariane 5 rockets, due to be signed in late 2002, to cost 50 per cent less than the first batch ordered in 1995. Achieving these cost reductions will involve a complete reorganisation of the Ariane 5 production chain. Although in progress, even this is not thought to be enough, and the company is being forced to seek extra funding from the European Space Agency (ESA).

      At its recent council meeting in Montreal, ESA submitted a proposal to its member governments asking to commit to purchasing three Ariane 5 heavy launchers and two Vega small launchers per year for five years starting in 2005. According to the proposal, this would cost European governments around 650 million euros ($637 million), but would be partially offset by sales revenues.

      An ESA official commented: “Between now and December, when we have our next ministerial meeting, a working group will collect all the reactions to this proposal from the respective governments. We hope that a resolution could be voted on in December by the various ministers at that meeting. However, the meeting was not just about this proposal. It was one element of a wider analysis of the European launcher industry, which included restructuring launcher manufacturing and also cooperation with the Russians.”

      Another proposal is to get European countries to launch all their government/military satellites using Arianespace. In the United States, the military and government agencies are obliged to launch their satellites on U.S. rockets. However, there is no equivalent policy in Europe. As a result, Arianespace relies on the commercial sector for 90 per cent of its revenues. According to ESA, “We forecast that there will be about 10 government/military satellites launched in 2005 increasing to 14 or 15 in 2008 and falling to 10 in 2010. About 10 of the launches in this 2005-2010 time frame will be due to the automated transfer vehicle (ATV) for the International Space Station. The ATVs were due to be launched on Ariane 5 anyway.” However, if approved, this option would not be available for several years, until new government payload programmes are designed and the hardware is readied for launch. –Gareth Owen

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