WASHINGTON, DC — Launch industry officials and analysts offered little hope for a quick turnaround in the beleaguered launch sector because of drastically curtailed demand, according to a March 11 panel discussion sponsored by the Society of Satellite Professionals International and Women in Aerospace.

One ray of hope is that the budget proposed by President Bush includes $540 million for evolved expendable launch vehicle (EELV) missions between fiscal years 2004 and 2009, said Lt. Col. Blaise Kordell, deputy division chief of the U.S. Air Force’s space launch range operations. The funding would include $160 million for the next fiscal year alone, he added.

“We are trying to take steps to mitigate [the launch industry’s] situation,” Kordell said.

If the increased funding for EELVs missions submitted by President Bush wins congressional passage, the money would help the Boeing [BA] Delta IV and Lockheed Martin [LMT] Atlas V programs, but not other launch service providers that are struggling financially.

Officials from Boeing and Lockheed agreed that additional funding would help, but they said more government assistance would be needed to overcome a projected shortfall in commercial launch missions for the foreseeable future.

Boeing netted 22 of the 29 EELV missions allocated by the Air Force, said Jayne Schnaars, vice president of Boeing Launch Services. However, those missions are not enough to offset a large drop in commercial launch demand. Satellite manufacturer Boeing Satellite Systems cut 2,000 jobs in 2002 due to falling demand for new satellites.

European satellite manufacturing rivals Astrium and Alcatel Space have discussed a merger to slash costs and gird for lean times ahead. Lockheed Martin also is streamlining its commercial space business.

New satellite orders have slowed to a veritable trickle and Launch providers are competing for the few commercial missions available.

For example, Arianespace posted large losses in the past few years, despite winning the lion’s share of contracts for commercial geostationary satellite launches. Lockheed Martin took write-downs of $145 million in 2001 and $268 million in 2002 because of the decline in the commercial launch market.

A partial recovery is not expected until the 2006-2008 time frame. The dim forecast in the launch sector is exacerbated by a decline in the telecommunications market and difficulty in raising capital, as well as by launch vehicle and satellite reliability problems that have sent space insurance rates climbing. The situation is so bad that commercial geostationary satellite orders reached a 10-year low in 2002, which means anemic demand for launch services, Schnaars said.

-Paul Dykewicz

(Jayne Schnaars, Boeing Launch Services, 714/372-2703; Jim Rymarcsuk, International Launch Services, 571/633-7464; Clayton Mowry, Arianespace Inc., 202/628-3936; Blaise Kordell, U.S. Air Force, 703/588-0580; Brett Alexander, White House, 202/456-6044)