The commercial challenge to Arianespace: the TCI affair

The question of how far rockets used for commercial launch services are subsidised by their respective governments remains highly topical. This article traces the history of the first legal challenge to be made on this basis by a US launch service provider against Arianespace, a case which also called into question the pricing of the Space Shuttle. The perceptions, deliberations and negotiations of both sides are traced and it is noted that their most important outcome was not settlement of the case itself but agreement to start serious consultations on defining ‘rules of the road’ regarding government support to the commercial launch industry.     

Ariane in the world launch vehicle market

Roland Deschamps, Secretary General of Arianespace, discusses the evolution of the Ariane family of launchers and the creation of Arianespace to market and manage Ariane production and launch services. Tha launcher market is analysed and the advantages of Ariane compared to the US Shuttle are identified.     

National subsidies in the international commercial launch market

The agreement by the USA and Cocom to allow the export of US-built satellites for launch on Chinese launchers raised the national subsidy issue. The international commercial launch market is multinational and highly competitive; launch suppliers have accused each other of being unfairly subsdized. Currently the US government is engaged in various negotiations to establish a ‘level playing field’. A clear study of the subsidy issue is essential. This article examines some of the charges and the current situation associated with each country and suggests a possible approach for the USA to remain competitive in the international commercial launch market.     

The US–Europe technology gap in space transportation: the view from the USA

This paper examines the debate within the USA over how to meet the perceived competition from the successful European Ariane launcher and the loss of US market share for space launch services that it represented. In particular, it explores the origins of the 1983 Reagan Administration policy to turn over expendable launch vehicle production and operation to private industry. The Administration's other decisions to: (1) use the Space Shuttle to fly all government payloads, and (2) allow NASA to market Space Shuttle services commercially, conflicted with this commercialization policy. These policies effectively caused US industry to delay entry into the international competition for launch services until after the loss of the Space Shuttle Challenger in January 1986.     

Europe's major challenge for the 21st century: Access to space

Like the other great space powers of the 21st century, Europe has its own means of accessing space: Ariane, which has guaranteed its independence in the launching of civil and military satellites for almost 30 years and has won a significant part of the highly competitive commercial market. This market provides the Ariane system with the production volume indispensable for its reliability, which also benefits institutional launches. Europe's commercial market share will be even larger if the launch system is flexible and adaptable to the diversity of demand. Probable future technological changes make flexibility more necessary still. Two technical characteristics will be key: a large enough payload capacity and the injection of satellites into energetic orbits, including final geostationary orbit. But carrying out such missions will only be possible if a new generation upper stage is used. The November 2008 ESA ministerial meeting opted to wait until 2011 to decide whether this is necessary, making it doubtful whether Arianespace will be able to maintain leadership in the commercial market. The authors urge a rethink of this position.     

Soyuz in French Guiana: A strategic perspective

After a proposition from Russia to France, ESA agreed to see Soyuz rockets take off from French Guiana. From industry, to governments and agencies, many Russian and European actors were involved in this project and they all had different motives. It is therefore relevant to try to discern them so as to understand the rationale behind this cooperative endeavor. Soyuz's primary role is to consolidate Arianespace commercial position in the launching market and to bring activity and founding to a stagnating Russian space sector. With this decision Arianespace will have a full range of commercially available launchers with Soyuz completing the two European rockets Vega and Ariane V. But since Vega and Ariane must have the priority, there is a risk to see an insufficient launch rate for Soyuz, which would not satisfy the Russian partners. Commercial elements alone cannot justify the agreement. There is a larger strategic ambition behind. What is at stake is the future development of innovative launch systems. It is important for ESA to maintain an autonomous access to space and to maintain a dynamic and strong European propulsion industry. Cooperation with Russia can offer an increase of expandable rockets capabilities and can pave for the next generation of launch vehicles. Moreover, we can detect an interest in acquiring a system that has the potential for human space flight capacity. Finally, the decision to launch Soyuz from French Guiana was the conjunction of Russian and French national interests, which led to a complete redefinition of the relations between Europe and Russia. It is of strategic importance that we, Europeans, adapt to this evolution and understand the new place that Russia takes in our space sector.     

Rebuilding US launch capabilities

Attempts to rebuild US commercial launch capabilities through stimulating private industry will be constrained by the fact that free-market competition does not really exist in the space industry. As the worldwide supply of launch vehicles grows, the policy now offered by the US government is only likely to fragment the US space launch vehicle industry. The author argues in favour of a proposal to establish a quasi-governmental corporation for space launches which would both safeguard the interests of government and commercial users and ensure that business acumen was applied.     

An inconvenient regulatory truth: Divergence in US and EU satellite export control policies on China

Since the early 1990s the USA has maintained export control sanctions against Chinese international commercial satellite launch services. In 1998 these sanctions were further strengthened, resulting in a de facto international embargo that is premised on ITAR export licenses. Since 1998 this de facto embargo has effectively prohibited China from launching Western commercial satellites of a sophisticated technological standard. Today, European commercial satellite manufacturers are positioned to fully benefit from ITAR-free technology investments, gaining access to Chinese launch services for the launch of commercial telecommunication satellites that are technologically comparable to US satellites. This article examines the policy implications for the USA in light of EU regulatory divergence and the impending return of China to the international commercial launch services market.     

Third-party liability insurance and space launches

This article discusses a number of issues related to the US commercial expendable launch vehicle (ELV) industry and government's role in ensuring its competitiveness, particularly third-party liability insurance for space launches. The author finds that the space insurance industry has become a major constraint on the commercial development of space. The future implications are considered of US government involvement with the launch services industry, initially through providing third-party insurance itself. The author concludes that, for a stable commercial ELV industry, it will be necessary for the USA either to establish fair-trade agreements with other space-capable nations, or to maintain a significant government involvement to support the industry.     

Chinese launch services A user's guide

This article describes aspects of the Chinese space programme of interest to potential users of Chinese commercial launch services. A brief history is included along with a review of the current licensing requirements of the US government. The rationale behind Aussat's choice of the Long March launch vehicle is presented as well as a brief comment on the likely future for Chinese launch services in the West.     

Commercial spaceports — a window of opportunity?

The feasibility of building commercial spaceports is being actively investigated in several countries. Potential benefits include boosting economic development and assisting the commercial launch industry. This report finds, however, that commercial spaceport development will probably not be capable of generating a large enough return on investment to attract private sector involvement without significant government assistance. It is also unlikely that the market for large launch vehicles will support spaceport development; however, small satellites may offer better prospects.     

The relevance of economic data in the decision-making process for orbital launch vehicle programs,a U.S. perspective

Over the past fifteen years, major U.S. initiatives for the development of new launch vehicles have been remarkably unsuccessful. The list is long: NLI, SLI, and X-33, not to mention several cancelled programs aimed at high speed airplanes (NASP, HSCT) which would share some similar technological problems.The economic aspects of these programs are equally as important to their success as are the technical aspects. In fact, by largely ignoring economic realities in the decisions to undertake these programs and in subsequent management decisions, space agencies (and their commercial partners) have inadvertently contributed to the eventual demise of these efforts.The transportation revolution that was envisaged by the promises of these programs has never occurred. Access to space is still very expensive; reliability of launch vehicles has remained constant over the years; and market demand has been relatively low, volatile and slow to develop. The changing international context of the industry (launching overcapacity, etc.) has also worked against the investment in new vehicles in the U.S. Today, unless there are unforeseen technical breakthroughs, orbital space access is likely to continue as it has been with high costs and market stagnation.Space exploration will require significant launching capabilities. The details of the future needs are not yet well defined. But, the question of the launch costs, the overall demand for vehicles, and the size and type of role that NASA will play in the overall launch market is likely to influence the industry. This paper will emphasize the lessons learned from the economic and management perspective from past launch programs, analyze the issues behind the demand for launches, and project the challenges that NASA will face as only one new customer in a very complex market situation. It will be important for NASA to make launch vehicle decisions based as much on economic considerations as it does on solving new technical challenges.     

The private solution to the space transportation crisis

Confused and short-sighted decisions dominated by political expediency have been made about US space policy in the past 30 years. Overly large and ambitious systems have been chosen, resulting in today's crisis in space transportation. The history of commercial aircraft development offers an alternative example of producing in a range of sizes and capabilities for a wide variety of users, and shows that the space transport industry could benefit from applying the decision-making processes used in private enterprise. The authors examine strategies for privatization of space transportation and conclude that policy support for the commercial launch industry must be continued. NASA must be reoriented towards its basic research function, and more government services should be bought from the private sector.     

Forecasting space markets

Space Policy is here reprinting edited extracts from two reports — one French, one American — which aim to forecast the market for space applications and launch services over the next 10 and 15 years respectively. Euroconsult 1986 edition of The World Space Industry Survey: Ten-Year Outlook gives a country-by-country analysis of policies and programmes; an evaluation of markets for space applications and a forecast of the market for launch systems. The Report on the 1986 Outside Users Payload Model, prepared by Battelle, Columbus Division, for the US National Aeronautics and Space Administration, provides an estimate of demand for launch services for payloads in a range of mission categories flown by countries outside the Soviet bloc. Using different starting points and methodologies, the two reports nevertheless draw convincingly similar conclusions.     

The relevance of economic data in the decision-making process for orbital launch vehicle programs, a U.S. perspective

Over the past fifteen years, major U.S. initiatives for the development of new launch vehicles have been remarkably unsuccessful. The list is long: NLI, SLI, and X-33, not to mention several cancelled programs aimed at high speed airplanes (NASP, HSCT) which would share some similar technological problems.The economic aspects of these programs are equally as important to their success as are the technical aspects. In fact, by largely ignoring economic realities in the decisions to undertake these programs and in subsequent management decisions, space agencies (and their commercial partners) have inadvertently contributed to the eventual demise of these efforts.The transportation revolution that was envisaged by the promises of these programs has never occurred. Access to space is still very expensive; reliability of launch vehicles has remained constant over the years; and market demand has been relatively low, volatile and slow to develop. The changing international context of the industry (launching overcapacity, etc.) has also worked against the investment in new vehicles in the U.S. Today, unless there are unforeseen technical breakthroughs, orbital space access is likely to continue as it has been with high costs and market stagnation.Space exploration will require significant launching capabilities. The details of the future needs are not yet well defined. But, the question of the launch costs, the overall demand for vehicles, and the size and type of role that NASA will play in the overall launch market is likely to influence the industry. This paper will emphasize the lessons learned from the economic and management perspective from past launch programs, analyze the issues behind the demand for launches, and project the challenges that NASA will face as only one new customer in a very complex market situation. It will be important for NASA to make launch vehicle decisions based as much on economic considerations as it does on solving new technical challenges.     

Launch vehicles and the commercial uses of outer space : The underlying economic issues

This article discusses the economics of the demand for and supply of launch vehicles. Demand is derived from both commercial and governmental uses of space, while the supply of launch vehicles is determined by governmental needs which are rarely based on economic criteria alone. Multipurpose launches such as the Space Shuttle should be viewed as a national resource instead of a profit-seeking venture. Because of the mixing of government and private uses for space vehicles, traditional economic analysis provides only a starting point for policy decisions.     

Some thoughts on space station science

US government proposals to cut the scientific budget of the ISS are placed within the historical context of the US space program. The author divides this into three phases—early days to the end of Apollo, the Shuttle era, and the Space Station era—and shows that all of these have suffered from decisions to reduce scientific capabilities. Even without cuts, it is unlikely that the Station can produce scientific outcomes that are commensurate with the investment that has taken place and it is imperative that policy makers learn from the lost opportunities of the two earlier phases if greater disappointment is to be avoided.     

RLV economics: fiscal evaluation of NASA''s reusable launch vehicle effort

The US RLV program aims to stimulate commercial development of a next-generation heavy-lift launcher and lower launch costs by one order of magnitude from the Space Shuttle. This paper discusses the incentives needed to encourage private investment — income tax relief, investment mitigation, financing assistance — in the venture and uses a specifically developed case study model to evaluate their effectiveness. It finds that an R&D tax credit would be the most practical incentive. Directions for future work are provided.     

Economics of telecommunications space segments

This paper proposes a complete model for assessing the economics of telecommunications satellite systems, accounting for spacecraft development and manufacturing, launch and operations in orbit. This allows to account for such parameters as the mass and lifetime of the satellites, the number and type of payloads, the number of satellites procured and launched, the spare policy, the launch vehicle, the insurances, the satellite average MTTF and the management of the space segment efforts.

The model is divided into four parts: the spacecraft mass model, the spacecraft procurement cost model, the MTTF model and the space segment cost-effectiveness model. It provides for the rapid solution of a number of problems within a wide range of parameters such as assessing the influence on space segment economics of —certain satellite technologies, —satellite and payload mass, —number of payloads per spacecraft, —satellite lifetime, or —spare policy.     

International market for a reusable launch vehicle

A reusable launch vehicle could be developed early next century if the X-33 program is successful. Its development will be funded by industry, and the vehicle will be operated privately. A critical task is to assess the future market for such a vehicle. The total number of commercial payloads could range between 40 and 60 satellites per year, taking into account the market elasticity due to the launch price reduction. The RLV would face important competition from expendable launch vehicles. However, the RLV could capture two-thirds of this market, or 26–33 commercial payloads per year.