Bigger Payloads Boost the Payoffs in Space

There’s a market overhead that could be worth $55 billion over the next decade. Competition to win a piece of it is fierce and getting fiercer, drawing in Americans, Western Europeans, Russians, Chinese, Ukrainians, Japanese, Indians, Brazilians.

Welcome to a unique line of business that truly is rocket science--making express deliveries into outer space for $10,000 a pound or more.

On Friday, in a vast clearing bulldozed from dense jungle on the northeastern shoulder of South America, Europe’s latest entry into this sky-high form of capitalism made its commercial debut.

The two-stage Ariane 5 rocket--168 feet tall and capable of lugging a pair of telecommunications satellites weighing a total of 6.5 tons into orbit 22,300 miles above the Earth--streaked into a cloudless sky atop a pyre of dazzling yellow flame and white smoke. Aboard was the XMM, an X-ray telescope more powerful than NASA’s recently launched Chandra observatory.

The XMM’s owner paid $145 million for the ride.

The largest scientific satellite built in Western Europe, XMM will be peering into some of the most violent regions of the universe, including the glowing remnants of supernovae--black holes where matter is being torn apart--and so-called vampire stars that feed off their neighbors by sucking matter through space. Also aboard the Ariane 5 is a telescope capable of seeing ultraviolet rays, a project in which UC Santa Barbara physicists played a leading role.

Mission control pronounced the rocket’s first paying mission a complete success, and toasted Ariane 5’s launch with chilled French vintage champagne. But will the new rocket justify the $6 billion in research and development costs that the 14-nation European Space Agency, has lavished on it?

The short answer is: Nobody knows.

“The future is competitive, because there are lots of people building up capability to launch, and this will drive the prices down,” said Fredrik Engstrom, the agency’s director of launchers. “This means that the price will go down, so this is going to be tough on a launcher like Ariane.”

Satellites also keep getting heavier, which means the Europeans already are moving to double Ariane 5’s carrying capacity by 2005. U.S. competitors Lockheed Martin and Boeing Co., meanwhile, are using $1 billion in grants from the Air Force to develop boosters meant to slash launch costs by 40% within three years--to leapfrog its latest competition, the Ariane 5.

A dozen U.S. companies also are trying to build new kinds of reusable satellite launchers--including prototypes shaped like a wedge of pie and another equipped with helicopter blades to slow its reentry speed.

This is one high-tech field where the Europeans are not used to being in second place. The Russians may have been the first in space and the Americans first on the moon, but Western Europeans were the leaders for a time in putting commercial payloads in orbit.

Europeans Boast Run of 50 Good Launches

Over the last decade, Arianespace, the French-led company that sells cargo space aboard Ariane rockets, snared 54% of all competitive contracts for launching telecommunications and other nonmilitary satellites, according to Paris-based Euroconsult, a consulting firm.

The Europeans now can boast of having made 50 straight commercial launches without a hitch, a success record they say is unrivaled.

With earlier and smaller generations of Ariane rockets, the Europeans found themselves with a virtual monopoly on pay-per-launch services after the U.S. Space Shuttle Challenger exploded in 1986. Conventional U.S. wisdom had been that the shuttle, functioning like a glorified United Parcel Services truck to haul satellites into orbit and bring them back to Earth, would make old-fashioned unmanned rockets obsolete.

Since then, the Americans have been fighting their way back. According to the Federal Aviation Administration, Boeing, Lockheed Martin and Long Beach-based Sea Launch, which uses a towed oil platform as a mobile launch pad, have pulled ahead of Arianespace in the orbital business, with 13 satellite launches this year. Friday’s Ariane shot was the ninth launch this year for the Europeans.

The Russians--who have embarked on cooperative ventures with Western partners, often using converted intercontinental ballistic missiles--also have emerged as big-time players, with as many commercial launches this year as the Americans, according to the FAA. The Chinese, with their Long March rocket, had one.

“This industry was just begun in 1989 really, and we [the Americans] are now doing great,” declared FAA spokesman Hank Price. According to the federal agency, 18 American states have filed applications to construct commercial space ports. Pay-per-launch pads already exist at Cape Canaveral, Fla.; Vandenberg Air Force Base; Wallops Island, Va.; and Kodiak Island, Alaska.

Squeezed by the increasing competition, Arianespace’s profit margin dwindled to a minute 1.3% last year. Here at the Western European agency’s South American space port, nestled in a tropical rain forest inhabited by toucans and hummingbirds, hopes are keen that this bigger model of the Ariane, 14 years in the making, will revive the program’s glory days.

“Ahead of all of our competitors, we’ve just put into operational service . . . a launcher of a new generation,” Arianespace Chairman Jean-Marie Luton said after Friday’s launch.

According to Luton, Arianespace this year snared 11 of 13 launch contracts in which there was open competition. As many as six Ariane 5 launches could take place next year, he said, the first as early as February.

But the risks in space, as the recent loss of NASA’s $165-million Mars Polar Lander highlighted, can be enormous. Japan on Thursday announced it was halting development of its H-2 rocket after two failed launches this year. Russia has had two Proton booster rockets fail, and may be knocked out of operation until next March.

A Bad Year for U.S. Launch Efforts

The year also was not kind to U.S. companies. The two maiden flights of Boeing’s Delta 3 boosters were flops, and two Lockheed Martin Titans also blew up.

The first tests of the Ariane 5, on June 4, 1996, also ended in fiery disappointment for the Europeans because inappropriate software from the earlier Ariane 4 had been loaded into on-board computers. The rocket had to be destroyed 37 seconds after liftoff. A second test the following year was only a partial success: The satellite it carried was placed in an incorrect orbit because the booster turned like a corkscrew as it rose.

The final experimental flight, on Oct. 21, 1998, came off without a hitch, but the Europeans, having learned caution, put a dummy satellite aboard.

For anyone seeking to place a good-sized object into orbit these days, about a dozen competing launchers are available, and newcomers such as Brazil, India and Israel are eyeing or trying to join the market.

“It’s getting a lot tougher and more competitive than it was five years ago,” said Stephane Chenard, Euroconsult’s chief space and communications analyst. His firm estimates $45 billion to $55.6 billion will be spent in the next decade to put commercial satellites in orbit.

The evolution in the uses of satellites also is keeping rocket manufacturers guessing. Ariane 5’s designers and builders didn’t foresee the sudden demand for smaller, lower-orbit satellites that can relay calls from portable telephones or be used for broadband transmission of data, video conferencing or the Internet.

A retooled version of Ariane 5 that can park a constellation of such satellites in low orbit is due by 2001. But the continuing financial woes of ambitious low-orbit ventures such as Iridium, a private network that has 66 satellites in space, may make this market a chimera.

Another project for global Internet access championed by Microsoft’s Bill Gates and cellular phone mogul Craig McCaw, named Teledesic, would require launching up to 840 satellites. But industry analysts say the project is no closer to reality than 10 years ago, despite the $1 billion spent so far.

Next year should be good for commercial space launches, with some ambitious projections predicting 48 of them. Through all this, the makers of rockets are going to have to keep pace.

Some scientists think communications satellites could weigh 16 tons each or more by 2010--about three times heavier than a current behemoth being built by Hughes Corp. to provide telephone service to the Middle East.

With Ariane 5’s picture-perfect blastoff Friday, the Europeans made it clear that they want to cash in on their success as quickly as possible in this competitive business.

“We’ve already sunk such a lot of money into this program,” said Luton of Arianespace, “so it’s necessary to benefit from it as soon as possible.”