Posted on 03/19/2003 7:24:44 AM PST by boris
Arianespace Raises Specter of a Europe Without Ariane 5
Source: Space News, March 17, 2003, page 8
The Arianespace launch consortium has raised the possibility that it could abandon its Ariane 5 rocket - the company's only product - as a result of its financial crisis following the collapse of the commercial launch market and Ariane 5's difficulties.
According to industry officials, that very scenario - that Europe would walk away from the launch business that its governments have spent several billion dollars to develop - was evoked by Arianespace management March 5 during a meeting with employee representatives.
European government and industry officials immediately discounted the idea and said it likely was a bluff by Arianespace management that was intended to mute employee opposition to the company's plans to lay off a third of its 355-person staff this year to stem rising financial losses.
But officials also said the fact that the Evry, France-based company would raise the specter of a European withdrawal from the launcher business is a sign of how desperate Arianespace's position has become.
"They're making a statement to employees, and to European governments, that they need help right away," said one European government official. "They know European governments are having trouble finding the money needed to rescue Arianespace. They want to force a clear choice by governments: keep us alive or drop the pretense of saying space access is a strategic asset."
Arianespace spokesman Mario de Lepine said the company declined to comment on the situation.
Arianespace also suggested that its shareholders may soon decide to reduce Arianespace to a marketing and sales office attached to one or more of its large contractors or shareholders, such as the European Aeronautic, Defense and Space Co., or rocket-engine maker Snecma.
Similarly, the European Space Agency is planning a reorganization of Europe's launcher sector that could include the creation of a European Launchers Industries conglomerate that would incorporate Arianespace, officials said. In both these scenarios, Arianespace likely would end up much smaller than it is now.
At the March 5 meeting with employee representatives, Arianespace executives said that they planned to cut staff by between 105 and 125 people this year, a figure they said would save the company 36 million euros ($39 million) including benefits. Arianespace expects its sales this year to decline by that amount compared to 2002, a year in which the company lost money.
For Arianespace, 2004 is unlikely to be much better. The December failure of the rocket's new, morepowerful version has forced Arianespace to order six less-powerful Ariane 5 rockets to cover their minimum launch needs for 2003 and 2004. The company now expects to conduct five launches this year and five in 2004. Several of these launches are likely to be of one satellite only because of the limited payload capacity of the basic version of Ariane 5.
That poses problems because Arianespace's business model depends on launching two spacecraft at a time; one-satellite launches are often money-losers.
Fixing the problems that led to the December launch failure is expected to take several months as contracting teams redesign the Vulcain-2 main-stage engine, whose nozzle design has been blamed for the loss of the December mission. The estimated total cost of the return to flight, including at least one demonstration flight, is 250 million to 300 million euros, according to European government officials.
With the company's commercial customers insisting, at least for now, on a second demonstration flight as a condition for booking flights with the more-powerful A vane 5, Arianespace currently plans to launch the European Space Agency's Automated Transfer Vehicle (ATV) in late 2004 as the second demonstration launch.
The ATV is launched to the international space station to raise the station's orbit and to delivery water, fuel and supplies to the orbital outpost. It is one of Europe's principal contributions to the space station program.
Under this scenario, Arianespace would not be ready to make commercial launches of its more-powerful Ariane 5 until the spring of 2005.
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