Arianespace S.A.

BP 177
Boulevard de l’Europe
Évry-Courcouronnes, 91006 Cedex
France
Telephone: (33 1) 60 87 60 00
Fax: (33 1) 60 87 63 04
Web site:http://www.arianespace.com/site/index2.
html

Private Company
Incorporated: 1980
Employees: 271
Sales: $985
million (2006 est.)
NAIC: 336414 Guided Missile and Space Vehicle Manufacturing; 336415 Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing; 336419 Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

ORIGINS

INCREASED COMPETITION IN A GROWING MARKET

ARIANE 5 AND OTHERS

PRINCIPAL SUBSIDIARIES

PRINCIPAL COMPETITORS

FURTHER READING

Arianespace S.A. is Europe’s provider of space launches for commercial purposes. Arianespace has lifted more than 240 satellites since its first commercial launch in 1984. Unlike its rivals, the company provides not just a launch vehicle, but related services such as insurance. The French national space agency (CNES) and the multinational EADS defense conglomerate are the largest of the nearly two-dozen European shareholders of the company.

ORIGINS

The first decades of the Space Race were the province of the United States and Soviet Union. Seeking an independent means of launching satellites apart from the superpowers, a group of nine European governments teamed together through the European Space Agency (ESA) to create their own launch platform. The result was the Ariane 1, which first launched in December 1979. Ariane 1 was developed at a cost of roughly $1 billion, much of it supplied by the French government.

Arianespace was created to commercialize the Ariane program. Established on March 26, 1980, it was the world’s first private company dedicated to space transportation. Startup capital was about $35 million.

Its shareholders included many leading European aerospace firms and several banks. The French space agency, Centre National d’Études Spatiales (CNES), maintained the largest holding, 34 percent. Aerospatiale and another French aerospace firm, SEP, each owned about 8 percent, as did West Germany’s MBB-Erno (later part of EADS).

On May 22, 1984, an Ariane 1 rocket completed what was described as the world’s first commercial space launch. Its payload was the Spacenet 1 satellite and the client was not a European firm but GTE of the United States, which had chosen Arianespace because the space shuttle was not available for another couple of years and the Ariane had more payload capacity available. Thus began the “space line,” a means of delivering satellites to orbit that was oriented to the world of private enterprises.

Another launch occurred on August 4 using the more powerful Ariane 3 rocket. This and the Ariane 2 together completed just 18 flights. A stronger launcher had been under development since 1982. First flown on June 1988, the Ariane 4 featured a new system for deploying multiple satellites on a single launch. It would perform most of the company’s launches until it was retired in 2003.

The rockets were launched from Kourou, French Guiana, thousands of miles away from the Paris suburb where the company’s gleaming new headquarters building was located. The position near the equator was one of the easiest places from which to slip spacecraft free of the earth’s gravity, resulting in fuel and weight savings.

INCREASED COMPETITION IN A GROWING MARKET

A U.S. competitor, Transpace Carriers, the marketing agency for General Dynamics’ Thor Delta rocket, soon accused Arianespace of unfairly benefiting from subsidies. However, in the hearings that followed, it emerged that it was massive U.S. government support for the space shuttle program that was keeping launch rates artificially low.

The Reagan administration ended commercial access to the space shuttle a few months after the loss of the Challenger in early 1986. This gave Arianespace a virtual monopoly while U.S. aerospace contractors struggled to get their rockets to market.

A rocket failure in May 1986 delayed the Ariane program for more than a year, however. Meanwhile, large U.S. defense contractors had restarted production lines idled by that country’s reliance on the space shuttle. Arianespace also faced competition from China, the Soviet Union, and Japan.

At first Arianespace struggled to match the reliability of its U.S. rivals. In one early mishap in 1985, an $80 million satellite was lost when the rocket carrying it went off course and had to be destroyed. Such incidents, whether on the part of Arianespace or others, invariably sent the cost of insurance soaring.

A new entity, Arianespace Participation, was created in 1990 to allow new investors from Italy and elsewhere. This ensured French control of the operating company. A launch failure in February 1990 did not bode well. Nevertheless, revenues rose 50 percent in 1991 to about FRF 6 billion ($1 billion). In the early 1990s, Arianespace was launching two dozen satellites a year.

After an incredible decade of growth, the market for telecommunications satellite launches collapsed around 2002. Unlike its American counterparts, Ariane did not yet have a military business to fall back on, recalled Le Figaro. At the same time, an increasing number of countries were making plans to launch their own commercial satellites, including India, Brazil, Israel, North Korea, and Iran.

ARIANE 5 AND OTHERS

The Ariane 4 made its last flight in February 2003. The next in the series, the Ariane 5, proved to be very successful. There were some significant teething problems to overcome, however. The first Ariane 5 rocket had blown up shortly after takeoff in 1996. By this time, the $8 billion program had been a decade in development.

A heavier lifting version, called the Ariane 5 ECA, also failed its first launch in December 2002. However, Arianespace soon overcame its problems to create another highly sought after launch vehicle. On August 11, 2005, an Ariane 5 ECA rocket lifted the world’s largest commercial communications satellite ever put in orbit. Called Thaicom 4, it was the property of Shin Satellite Public Company Limited of Thailand. HDTV programming was lifting business in the once lackluster Asian market.

COMPANY PERSPECTIVES

Arianespace developed operations for dual satellite payloads on Ariane 4 which became the industry standard. Launch teams at the Spaceport regularly demonstrated their capability to match up payloads with Ariane—adapting the mission campaigns when satellite deliveries were delayed either by the customer or spacecraft manufacturer. This experience is applied in the current and future mission operations with Ariane 5, the successor launch vehicle with a significantly larger payload capacity that will enable Arianespace to launch almost any dual combination of telecommunication satellite payloads—no matter what size or weight.

Most of the satellites the company was launching were replacements for ones originally put into orbit in the early 1990s. Though the Asia-Pacific market was the hottest, there was ample demand elsewhere as well. In 2007 leading telecom satellite operator SES S.A. contracted Arianespace to launch up to ten satellites by 2013. Arianespace had begun to perform some joint military-commercial launches via one of its projects for Australian clients.

While the company’s rivals were experiencing major difficulties with their programs, the Ariane 5 was considered one of the most reliable launchers available. After the tech bubble burst, U.S. aerospace giants had all but abandoned their own multibillion-dollar rockets, though Boeing Co. was a partner in ventures using Russian-made Zenit launch vehicles.

Starsem, a joint venture with EADS, the Russian Federal Space Agency, and the Samara Space Center (Arianespace held a 15 percent share), was involved with launching Soviet-designed Soyuz rockets from Baikonur Cosmodrome in Kazakhstan. These launches were being moved to French Guiana in 2008. The venerable Soyuz, which dated back to the early days of the space race, had completed its 1,700th launch in September 2005.

Arianespace had settled on single suppliers for its launch vehicles. The heavy-lifting Ariane 5s were built by Astrium, while Russian manufacturers made the Soyuz rockets, which handled medium payloads. ELV served as the prime contractor for another program, the Vega, which handled the lightest payloads upon its first launch beginning in 2008.

Frederick C. Ingram

KEY DATES

1980:

Arianespace S.A. is formed to commercialize Europe’s Ariane 1 rocket program.

1984:

Arianespace completes world’s first commercial space launch.

1986:

The U.S. ends commercial use of the space shuttle, giving Arianespace a temporary lock on the market.

1988:

Ariane 4 enters service, becoming company’s workhorse.

1996:

First Ariane 5 rocket blows up shortly after takeoff.

2005:

An Ariane 5 ECA lifts the world’s heaviest commercial communications satellite to date to be placed in orbit.

PRINCIPAL SUBSIDIARIES

Arianespace Inc. (U.S.A.); Starsem S.A. (15%).

PRINCIPAL COMPETITORS

Boeing Co.; Lockheed Martin Corp.

FURTHER READING

“Ariane en impose aux Américains et aux Russes,” Le Figaro, March 9, 2007, p. 18.

“Arianespace Plans Asia Satellite Launch on HDTV Demand,” Asian Wall Street Journal, June 21, 2005, p. A2.

Arianespace, S.A., 10 ans de lancements commerciaux (1984– 1994), Évry, France: Arianespace S.A., 1994.

Augereau, Jean-François, and Dominique Gallois, “Arianespace Profite de la reprise du marché des satellites,” Le Monde, Eco. Sec., May 3, 2007, p. 12.

Betts, Paul, “High Stakes at the Launch-Pad,” Financial Times (London), May 6, 1994, p. 19.

Cherki, Marc, “Arianespace a lance le plus gros satellite commercial de l’histoire,” Le Figaro, August 12, 2005, p. 5.

Choudhury, Amit Roy, “Rocket Man,” Business Times Singapore, July 22, 2006.

Cole, Jeff, “Arianespace’s Newest Rocket Explodes—Launch Failure Is Setback for $8 Billion Program; Rivals May Seek to Gain,” Wall Street Journal, June 5, 1996, p. A3.

Davis, Bob, “French Rocket Failure Gives U.S. Firms a Chance to Regain Satellite Business,” Wall Street Journal, February 26, 1990, p. B3.

Dawkins, William, and Paul Betts, “Arianespace Celebrates Its Quiet Successes—The Satellite Launch Group Has Earned a Reputation for Reliability,” Financial Times (London), May 18, 1992, p. 21.

“European Rocket Destroyed After Engine Failure,” New York Times, National Desk, May 31, 1986, p. 1.

“France’s Space Center Agrees to Create Rocket Production,” Wall Street Journal, March 17, 1980.

French, Howard W., “Kourou Journal; Space Center or Not, Some Say It’s Still a Jungle,” New York Times, April 26, 1991, p. A4.

Hayes, Simon, “Lift for Arianespace,” Australian, All-Around Country Sec., December 13, 2005, p. 33.

Horsley, Nathanael A., “The Arianespace Monopoly, EU Competition Law, and the Structure of Future European Launch Markets,” Air and Space Law (Netherlands) 30, No. 2 (2005), p. 87.

Isikoff, Michael, “Ariane’s Customers Unfazed by Fizzle; French Rocket’s 2nd Try May Be Next Week,” Washington Post, March 21, 1986, p. A20.

Jenkins, Chris, “Riding the HDTV Rocket,” Australian, IT Broadsheet, June 27, 2006, p. 5.

Marsh, David, “Arianespace Thinks Big, Aims High; Focus on the French-Led Satellite-Launch Company,” Financial Times (London), December 8, 1986, p. 22.

________, “Fanfare for World’s First ‘Spaceline,’” Financial Times, Financial Times Survey: France—Industry—Aerospace Projects, July 11, 1984, p. VII.

________, “Insurance Hitch for Ariane; Problems of Arranging Insurance Coverage for Telecommunications Satellite,” Financial Times, February 25, 1985, p. 28.

Marsh, David, and Ian Rodger, “US Sets the Stage for Space Race; End of Shuttle’s Role As Commercial Satellite

Launcher Opens Up Competition Between European, US and Japanese Organizations,” Financial Times (London), August 18, 1986, p. 24.

Mennessier, Marc, “L’éclatante santé de la fusée Ariane 5,” Le Figaro, Sciences & Médecine Sec., June 20, 2007, p. 13.

Pasztor, Andy, “Changing Trajectory: French Firm Vaults Ahead in Civilian Rocket Market—Arianespace Cut Costs to Beat U.S. Rivals; Trying to Sign NASA,” Wall Street Journal, June 25, 2007, p. A1.

Provost, Oliver, “Spatial Fragile compromis pour la direction d’Arianespace,” La Tribune, April 18, 1997.

Revzin, Philip, “Ariane Rocket’s Success May Give Europe Lead over U.S. Firms in Satellite Market,” Wall Street Journal, September 17, 1987.