SpaceX Competition Has Arianespace Looking at New Pricing

Ariane 5
Ariane 5

Space News reports that Arianespace is looking to counter the growing threat from SpaceX in the communications satellite launch market:

The Arianespace commercial launch consortium is telling its customers it is open to reducing the cost of flights for lighter satellites on the Ariane 5 rocket in response to the challenge posed by SpaceX’s Falcon 9 rocket, Arianespace Chief Executive Stephane Israel said Nov. 25.

“I have sent a signal to our customers telling them that I could review our pricing policy, within certain limits,” Israel said in an interview with Les Echos, a French financial newspaper. “I think they have appreciated this.”

SpaceX Chairman Elon Musk taunted Arianespace again on Nov. 24, the day before his company’s scheduled launch of the SES-8 satellite owned by SES of Luxembourg.

“Unless the other rocket makers improve their technology rapidly, they will lose significant market share to the Falcon 9,” Musk said in a news briefing.

An Ariane 5 launch costs $200 million and carries two spacecraft to geosynchronous transfer orbit. Each launch pairs a heavy satellite typically weighing more than 5,000 kilograms with a lighter one.

SpaceX, which charges $56.5 million for a Falcon 9 launch, poses a threat to Arianespace is for the lighter communications satellites.  This competition could make it more difficult for the European company to find satellite pairs for launches.

How lower prices would affect Arianespace’s bottom line is an interesting question. The company is not profitable without annual subsidies from European governments, who have been looking to reduce their financial support to Arianespace.

Read the full story.

  • Michael Vaicaitis

    F9 can put 4,850kg to GEO.
    And a $77million Falcon Heavy will be able to lift those 5000kg sats to GEO.
    And a reused F9 first stage can loose another $10-20million off the price for the lighter sats.
    And a $135million FH can put 21,000kg to GEO, twice that of Ariane5ECA at two thirds the price – or put another way, a third of the price.

    Ariane has proven reliable and a known cost for comsat operators, but the writing is on the wall, writ large and bleeding obvious.

  • dr

    One of the interesting things about that $77M FH price, is that the more flights Spacex do, the easier it will be to pair up satellites. Its also possible, that that price will influence the Satellite manufacturing market. Many operators could choose to build Satellites that come in under the 6.4tons limit in order to benefit from the $77m aggressive pricing. Alternatively, a satellite manufacturing company could offer a standardized design to its clients that would be designed to weigh slightly less than the 6.4tons in order to take advantage of cheap launch and attract customers to its satellite product.
    Spacex will need to keep an eye on ESA and ensure that if Ariane gets cheaper due to subsidies, that those subsidies are WTO compliant. Otherwise the US space industry could find itself getting competition from unprofitable launch providers that doesn’t observe a “level playing field”.

  • Michael Vaicaitis

    From the stand point of the past and present looking forward, your are right enough. However, I think (or at least , I hope) that reusability will change the space usage landscape quite rapidly. Given the magnitude and pace of change in such a scenario, we can only speculate on the how the comsat market will evolve. Once you can get hardware, and fuel !, to LEO for a fraction of the price that has dominated past and present thinking, then a lot can change.

  • dr

    Comsats are a high value add application. They have been like this for a few decades now. They have evolved to give the best value for money for what they do. They are, basically, the only commercial application for rocket launch that has been able to thrive in an environment of high launch prices.
    The reduction in launch prices will allow huge numbers of new industries and applications to be created, that are not profitable at current launch prices.
    But, the comsat market won’t change. This is because the highest value add activity will already have been discovered by trial and error over the last few decades. Satellites may be launched into space to do new things, and maybe put into geostationary orbit. Maybe servicing satellites to maintain other satellites, or recycling satellites to break up old satellites for parts and materials, or photographic satellites to allow people and businesses to buy pictures of parts of the earth etc. But these won’t be Comsats.
    Lots of new applications will change the space usage landscape, but the comsat market won’t change.

  • Michael Vaicaitis

    I am tempted to disagree. Apart from anything else, over the next few years more and more “TV” will go to view-on-demand over the internet. Electric propulsion, either on-board or LEO-GEO tugs, will likely also start to change comsat configurations. Reusable second stages and/or Skylon will lower the price to LEO so much that the extra cost of going straight to GTO will become significant. Getting to LEO is half-way to anywhere in the solar system. Give it 10 years and satellites, and the comsat market, will likely be quite different.

  • dr

    “…lower the price to LEO so much that the extra cost of going straight to GTO will become significant.”
    How so? If an F9 carries say 13.1tons to LEO or 4.9tons to GTO for a price of $56.5M today, then if prices to LEO fall by a factor of ten with reusability, then prices to GTO fall by a factor of ten, because its the same rocket.
    You seem to be implying, that if a rocket is cheap because of second stage reusability then the price to LEO and GTO will be different, because the destination will affect the reusability.
    The difference in payload would remain, so the price per ton would be around 2.5 times more to GTO than to LEO, but the price for the rocket would be the same either way, because it would be the same rocket.
    If you can get your second stage back (reuse it) by de-orbiting it after delivering a payload to LEO, then you can get your second stage back by de-orbiting it from GTO, so reusability isn’t affected.

  • Paul451

    I think the argument is that in a GTO, there’s no enough fuel reserve for reusability. Hence a GTO launch will only be partly reusable.

  • Michael Vaicaitis

    In placing a satellite into a high apogee orbit there may well be fuel issues in lowering the second stage orbit to control reentry speed. On the other hand, perhaps that’s a factor that can be mitigated for, as suggested by dr.

    I am suggesting that if you consider LEO in terms of as an “orbital space port”, then whenever you launch from the surface, the only destination is LEO. The lift and reusability design of all launch systems is then driven only by having only to reach LEO. This will optimise those launch systems and reduce costs. If launch to LEO is cheap, then activity in LEO space becomes cheap as well. With increasing launch volumes for other human activity in space, satellite launches, and in particular GEO comsats, will quickly become a minority payload, both in terms of numbers of launches and revenue – and just to reiterate the point, that the internet will likely replace the business of geo satellite tv transmission anyway.

  • Paul451

    My response was directed at dr’s handwave last paragraph.

    If you can get your second stage back (reuse it) by de-orbiting it after delivering a payload to LEO, then you can get your second stage back by de-orbiting it from GTO, so reusability isn’t affected.

    …isn’t true. In a LEO launch, the upper stage has fuel remaining to do a de-orbit burn, reentry and landing. In a GTO launch, that fuel is used for the transfer burn.

    Anyway, your last comment…

    If launch to LEO is cheap, then activity in LEO space becomes cheap as well

    …does prompt this thought: If LEO activity becomes cheaper, that activity may include a specialised GEO transfer vehicle that is reusable in orbit. (A solar-electric tug.) While the satellite operator will have to pay to refuel the transfer vehicle, that fuel doesn’t have to be launched with the satellite. This means that GEO satellites can increase in size to the limit of the launch vehicle, and the capacity of the orbital tug. So 10-13 tonnes on F9. For the price of a standard, reusable launch, plus a share of a later specialised launch of fuel.

    So if it takes two tonnes of fuel for the SEV-tug to transfer from LEO to GEO and back, then the price of a GEO launch is 1 full launch + 1/5th of a fuel launch, so 1.2 times a LEO launch plus the cost of renting the SEV tug which would be amortised over years of operation.

    Technically, these will be “LEO launches”. But of GEO payloads. So GEO “launches” would actually become cheaper relative to LEO launches than they are now. Just 1.2 (and a bit) rather than 2 to 3 times.

    Another possibility, if orbital operations becomes cheaper, and especially if commercial manned spaceflight becomes cheaper, is that we may actually see single large shared facilities (possibly manned, or at least man-tended) in various key orbits, replacing dozens to hundreds of stand-alone satellites. This means that satellite operators only have to add their specific hardware, with everything else (power/comms/propulsion/etc) being provided by the shared facility.

    This would be very similar to Arthur C Clarke’s original idea for GEO “satellites” which were actually giant manned space-stations (because someone had to be there to change all the valves.)

  • Michael Vaicaitis

    This is quite disconcerting, that you appear to have been reading my mind. Although, as soon as one steps away from the legacy mindset that has been instilled and enforced by the vast cost of disposable launch systems, then many possible and plausible scenarios arise. The notion of Space-tugs/buses/trucks/ships is perhaps the most obvious and electric propulsion appears a good fit for GEO comsats.

    “Technically, these will be “LEO launches”. But of GEO payloads.”

    This sums up my point nicely. All *launches* will be to LEO, where the payload or passenger transfers to the appropriate transport craft for their destination: GEO, cis-lunar, Mars, asteroid, deep space exploration, etc…..or most often, just LEO.

  • windbourne

    If I was SpaceX, I would worry less about Arianne Space, and worry more about China. All western nations are very constrained by WTO. OTOH, even though China is now a rich nation, they are NOT heavily constrained by WTO. Worse, WTO takes forever to rule on issues that deals with a developed (read western) nation vs. China, while they are quicker to deal with developed nations issues.

    But in the end, while europe will like do a large amount of subsidies, SpaceX has a large jump on them. Even now, as I listen to their battling and their plans, it is obvious that they are shooting for where SpaceX IS, not where they will be.

    OTOH, China will simply dump tonnes of subsides into space, just like they did with LED and Solar Manufacturing bringing down the prices in hopes of destroying western and Russian production capabilities.

    Hopefully, Bigelow launches in 2015 with Alpha and gets a brand new industry going. As to the discussions about the tugs for sats, I suspect that is a big part of what Raptor is for. Falcon heavy will make it relatively cheap to place depots in LEO or GEO. I think that we will see an announcement of a tug using LIDS for an interface from SpaceX right after Falcon Heavy launches.
    Note that with such a tug, it makes it possible to hook up to a BA-330 and use that to shuttle between ISS and BA’s Alpha.