Spacelift Washington 21 July 2000

• McCain Places Stranglehold on NASA Budget Bill, FAA 3rd Party Liability Renewal-and AST Budget, Too

• Feature: New Arianespace U.S. Chief Gives Emphasis to GEO Market

McCain Places Stranglehold on NASA Budget Bill, FAA 3rd Party Liability Renewal-and AST Budget, Too

WASHINGTON – July 21 – The FY 2001 budget battles for the civil space agency and FAA space launch regulators may be continued into fall, Capitol Hill sources say, thanks to an unhappy Senator John McCain (R-AZ), chair of the Senate Commerce and Science Committee.

Word is that after weeks of jockeying, McCain’s opposition to some parts of the NASA legislation remains the biggest obstacle to clear sailing towards a House-Senate Conference Committee.

Failure to move the bill before the Senate’s scheduled July 28th recess would make for a tight fall calendar for final action. Congress returns to Washington Sept. 5th and is then due to recess again Oct. 6th for the remainder of the autumn campaign, leaving precious little time before the new Oct. 1st Fiscal Year.

And that’s not all McCain is holding up.

The bill containing the FY2001 funding for the FAA’s Associate Administrator for Commercial Space Transportation (AST) as well as a five-year renewal of commercial launch Third Party Liability Indemnification is also stuck on the Senate side courtesy the Arizona Senator’s displeasure with the NASA bill. It’s not clear why holding the FAA space office hostage would move changes to the space agency’s proposals, however.

Senate sources are saying McCain is adamant in demanding final action on the NASA budget before moving to consider the liability issue. Sources say McCain has not quarreled with the actual merits of the liability extension.

The House has passed both bills already, minus the NASA Space Launch Initiative funded in the Senate version. Sources say the full administration request for the FAA AST budget of $12.5 billion was cut in the version of the Senate bill awaiting action.

The third party launch liability provision, extended for just one year in 1998, expires on Jan. 1, 2001. The provision allows for U.S. federal guarantees in the event a launching catastrophe results in lawsuits for injury or property damage greater than $500 million. The liability clause protects U.S. commercial launch providers from suits in the $500 million to $2 billion range. No third party damage has ever been claimed in the entire history of space flight.

Business Tidbit: Boeing ate a $34 million charge this past quarter against its earnings in the space/communications sector in order to pony up next month’s payload-less Delta III flight demonstration. The sector lost $38 million on sales of $1.8 billion as compared to a $94 million profit on $1.7 billion in sales during the same period a year ago.
The Delta III flight test will attempt to show the launcher’s flight worthiness following a pair of back-to-back launch failures in August 1998 and May 1999. Although the company had said a customer for the launch was forthcoming, it would fly instead with a satellite mock-up to demonstrate the new vehicle’s performance capabilities to GEO orbit.
The Delta III is a transition launcher with several flight systems and hardware traceable to the upcoming EELV-derived Delta IV boosters. While the Delta III might eventually be replaced with the IV (with the venerable and smaller Delta II still flying well into the decade), success of the Delta III is thought critical to marketing efforts of the larger EELV, whose inaugural-and commercial-launch is next year.

This Week’s Feature Story: Mondale on Arianespace: Full Speed Ahead

This Month 41-year old Leo Mondale takes the helm of Arianespace Inc., the European launch provider’s U.S. arm. Mondale succeeds Doug Heydon, who remains with the company as its Chairman. But unlike Heydon Mondale is not an engineer but a marketer with previous experience at Iridium and Matra. He also has a political pedigree-his uncle was U.S. Vice President Walter “Fritz’ Mondale who served in the Carter administration from 1977 to 1981. Mondale worked in his uncle’s campaigns and retains connections to the U.S. political world.

Q– How will your unique background effect your leadership of Arianespace?

A-Well, you don’t sell launch services the way you used to. The world is not as straightforward as it used to be in terms of ‘apply for an FCC license, get a license, raise some money, buy the pieces’, etc. It doesn’t go in that order at all.

Ideas are hatched by a variety of entrepreneurs and they come to market in a much less predictable way than they used to. But they all at the end of the day do have to have licenses and they do have to have funding. They do have to have launch services and what we’ve found is our track record of reliability combined with our ability to take investment sharing in some of those companies. The competition is usually reliability and price, in that order. So we tend to do fairly well.

But it’s the smaller projects where my background is particularly helpful, because I know what it’s like to pull together the regulatory, technical, commercial, marketing and sales aspects of a new project and I think Arianespace, with its narrow focus on launch interest is perhaps in a better position to manage its role in these new ventures than our competitors.

We’re simply trying to sell just launch services.

Q-How do you see your three different launchers -Ariane, Soyuz, and Rokot – fully addressing the shifting launch market?

A-We can’t identify the U.S. market in any substantial opportunities relating to large constellations of small satellites. So the reason Arianespace entered its agreement with Eurokot is that it can access the government and smaller satellite market in Europe. The Rokot is a good vehicle and is aggressively priced. But you’ve got to have a payload of the right size to put on it.

Our market remains large telecom satellites into GTO, however, and by large I mean over two tons. So some of the same rationale applies to the Soyuz as well. Although they (Starsem) have found a few large commercial applications like Skybridge. You don’t see projects like that developing in the U.S. right now (small satellite constellations).

Q-Are there more efficiencies to be had in Ariane 5 production and assembly to further reduce the cost of the launchers?

A-Clearly, we are in program one in three steps for optimization; i.e. reduction of costs of Ariane 5, and we are right now in the midst of the first step. So the Ariane 5 generic which is the rocket we sell today represents already a significant cost economy as compared to the Ariane 4 rocket.

The parts count (with Ariane 5) goes down dramatically. It’s a much simpler, more direct and elegant design. That’s step 1. In production batches 2 and 3 we’re going to see 30 percent savings between the current batch and the second. And 50 percent between the current batch and the third. So a 50 percent reduction is our target for the third batch of Ariane 5 vehicles.

Q-How do you see the market for launch services evolving in the next 10 years?

A– I think that space communications in particular has a very promising future, as we look at Ka band, some of the other new developments being proposed for space-based systems. A number of these are going to be important participants in what is going to be an explosion of telecommunications, Internet, etc. So I think commercial space will remain a very healthy industry going forward.

The challenge of course is the efficiencies that we are working on in the launch area are also being pursued in the satellite end. So in particular a satellite today offers much more revenue generating capability than a satellite 10 yrs ago. I think that will also be true 10 yrs from now. So the growth in demand has to outstrip this efficiency. So it is likely we are all sharpening our pencils up and down the industry and likely that we’ll see very significant economies and this will allow satellites to have a growing room and a growing market.

Arianespace is well positioned in that market. Our overriding concern today is quality. That means launching successfully and on time. If we keep ourselves focused on that I think we’ll continue to be successful.

Have a tip on news or information related to space transportation? E-mail the editor at sietzen@erols.com.

SPACELIFT WASHINGTON © 2000 by Aerospace FYI Inc. A Frank Sietzen, Jr. company. All rights reserved. The information and opinions contained herein are the author’s own and not associated with any other society, organization, or entity. Publication does not constitute endorsement of either editorial content or web site.