ILS Protests ESA’s Subsidies to Arianespace

ILS PR — BRUSSELS, Belgium, March 23, 2011 — ILS International Launch Services, Inc. (ILS), citing the recurring subsidies provided to its primary competitor, Arianespace, is waging an aggressive protest and intends to pursue “all avenues of recourse to stop such inordinate and direct subsidization of Ariane’s commercial operations,” said ILS President Frank McKenna.

This followed the most recent decision by the 18-nation European Space Agency (ESA) on March 17 to grant an additional infusion of funds totaling 250 million euros ($318 million) to support Europe’s Arianespace launch consortium with the implied promise of continued support beginning in 2013.

The continued subsidization of Arianespace to run their commercial operations at a loss, McKenna said, “dis-incentivizes cost reduction and efficiencies, prevents other launch providers from competing on a level playing field, deters new providers from entering the market and is detrimental to the long-term health of the commercial launch industry.”

McKenna held meetings with key members of the European Commission and the European Parliament this week to discuss the issues and determine their level of interest in restoring fair competition to the commercial satellite launch sector.  With that objective, ILS intends to file a State Aid Complaint with the European Commission pursuant to articles 107 and 108 of the Treaty on the Functioning of the European Union (TFUE) and is evaluating legal remedies available through the World Trade Organization (WTO).

“The EGAS funding was specifically put in place in 2003 to help Ariane ‘get back on its feet’ according to ESA, as a short term recovery effort.  ILS waited patiently for this 5-year funding period to end, along with the 175 million euro extension granted in 2007. Between the years of 2003-10, Ariane received over 1 billion euros from the EGAS program, and now, with these new price supports to Arianespace, we find it necessary to take all available steps to ensure fair competition,” said McKenna.