“I cannot tell my teams: ‘Goodbye, see you next year!’”
The France-based Ariane Group is the primary contractor for the Ariane 5 launch vehicle, and it has also begun developing the Ariane 6 rocket. The firm has a reliable record—indeed, NASA chose the Ariane 5 booster to fly its multi-billion dollar James Webb Space Telescope—but it also faces an uncertain future in an increasingly competitive launch market.
Like Russia and the US-based United Launch Alliance, the Ariane Group faces pricing pressure from SpaceX, which offers launch prices as low as $62 million for its Falcon 9 rocket. It has specifically developed the Ariane 6 rocket to compete with the Falcon 9 booster.
But there are a couple of problems with this. Despite efforts to cut costs, the two variants of the Ariane 6 will still cost at least 25 percent more than SpaceX’s present-day prices. Moreover, the Ariane 6 will not fly until 2020 at the earliest, by which time Falcon 9 could offer significantly cheaper prices on used Falcon 9 boosters if it needed to. (The Ariane 6 rocket is entirely expendable).
With this background in mind, the chief executive of Ariane Group, Alain Charmeau, gave an interview to the German publication Der Spiegel. The interview was published in German, but a credible translation can be found here. During the interview, Charmeau expressed frustration with SpaceX and attributed its success to subsidized launches for the US government.
$100 million launches
When pressed on the price pressure that SpaceX has introduced into the launch market, Charmeau’s central argument is that this has only been possible because, “SpaceX is charging the US government 100 million dollar per launch, but launches for European customers are much cheaper.” Essentially, he says, launches for the US military and NASA are subsidizing SpaceX’s commercial launch business.
However, the pay-for-service prices that SpaceX offers to the US Department of Defense for spy satellites and cargo and crew launches for NASA are below those of what other launch companies charge. And while $100 million or more for a military launch is significantly higher than a $62 million commercial launch, government contracts come with extra restrictions, reviews, and requirements that drive up this price.
Even as Charmeau decries what he calls subsidies for SpaceX from the US government, he admits that Ariane cannot exist without guaranteed contracts purchased by European governments. To make the Ariane 6 vehicle viable, Charmeau said Ariane needs five launches in total for 2021 and eight guaranteed launches for 2022.
During the interview, Charmeau also addressed reusability when the interviewer raised this as a possibility for lowering the cost of launch. In response, Charmeau asserts that the interviewer cannot know whether re-flying boosters is less expensive, as SpaceX claims. “How do you know that?” Charmeau asks. “Do you know their real cost structure?”
We do not, of course, as SpaceX is privately held. And it is highly probable that SpaceX has lost money so far on its effort to develop a reusable first stage. But now that it has begun flying the Block 5 variant of the Falcon 9 rocket, the company seems well positioned both to lower its prices as well as take profits from this research-and-development effort.
Charmeau said the Ariane rocket does not launch often enough to justify the investment into reusability. (It would need about 30 launches a year to justify these costs, he said). And then Charmeau said something telling about why reusability doesn’t make sense to a government-backed rocket company—jobs.
“Let us say we had ten guaranteed launches per year in Europe and we had a rocket which we can use ten times—we would build exactly one rocket per year,” he said. “That makes no sense. I cannot tell my teams: ‘Goodbye, see you next year!'”
This seems a moment of real irony. Whereas earlier in the interview Charmeau accuses the US government of subsidizing SpaceX, a few minutes later he says the Ariane Group can’t make a reusable rocket because it would be too efficient. For Europe, a difficult decision now looms. It can either keep subsidizing its own launch business in order to maintain an independent capability, or it can give in to Elon Musk and SpaceX, and Jeff Bezos and Blue Origin. Charmeau seems to have a clear view of where he thinks the continent should go.
“It is about future business,” Charmeau said. “Why do all the billionaires invest in space? Why does Jeff Bezos come to Germany and declare that the country should not go to space? He makes money with your personal data. Today he knows your Amazon orders, tomorrow he drives your car.”
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