The board of International Launch Services Inc. (ILS) appointed Frank McKenna the company’s president, as Lockheed Martin Corp. completed the sale of its interests in the international joint venture.

Lockheed Martin’s interests in Lockheed Khrunichev Energia International Inc. and ILS have been transferred to Space Transport Inc., a company formed specifically for the transaction by Mario Lemme, who has been a consultant to ILS since its inception, and a board member for more than three years. Khrunichev State Research and Production Space Center and RSC Energia remain partners in ILS, and terms of the transaction were not disclosed.

Under the new structure, ILS will continue to provide launches of Russia’s Proton and Angara vehicles to commercial customers, while Lockheed Martin will assuming marketing efforts for commercial launches of its Atlas 5 vehicle.

McKenna, who has more than 30 years of experience in the aerospace industry and served as ILS’ vice president and deputy for the past two years, replaces Mark Albrecht, who will remain with Lockheed Martin and retire at the end of the year.

"Going forward, our customers can expect our commitment to performance, as we continue to focus on meeting their launch requirements successfully and on schedule using the Proton launch system," McKenna said in a statement. ILS headquarters will remain in McLean, Va., the company said.

To date, ILS has performed 43 commercial Proton launches and has 11 firm missions on its backlog, which runs through 2008. ILS plans two complete two of those missions before the end of 2006 and has initiated the launch campaign for Arabsat’s Badr-4 satellite, which is slated to be launched Nov. 9 from Baikonur Cosmodrome.

Badr-4 is an Astrium Eurostar E2000+ model that will provide Arab countries and neighboring regions with direct-to-home, interactive TV and internet broadband services and also carries additional capacity that will accommodate anticipated demand for high-definition TV.

ILS also plans to place the Measat-3 spacecraft in orbit in December.

Lockheed Martin retained all rights related to marketing the commercial Atlas vehicle and is continuing to offer Atlas launch services to the worldwide commercial market through its subsidiary, Lockheed Martin Commercial Launch Services Inc. David Markham will lead the Denver-based organization.

The Atlas 5 has not had much of a commercial impact under ILS, as the company performed only seven Atlas 5 launches since 2002. The vehicle, along with Boeing Co.’s Delta 4, were developed under the U.S. Air Force’s Evolved Expendable Launch Vehicle program.

The commercial prospects for the Atlas 5 are not that high, Marco Caceres, a launch industry analyst with the Teal Group, said when Lockheed Martin announced plans in September to divest its interest in ILS

"I think any company has to have its core market, and certainly in the last year it’s become obvious that commercial is not where Lockheed’s going to get rich," Caceres said. "Satellites are bigger and more powerful, so while there’s need for more capacity and power, it’s relatively limited for the actual number of launches. You’re not going to get any more than, say, 10 contracts per year at the most. Knowing that they have to split profits with their Russian partners in the ILS, it’s probably not worth it if you don’t see a boom market on the horizon."

The Air Force remains the primary customer for both vehicles, and Lockheed Martin and Boeing are in the process of combining their manufacturing and marketing operations of the vehicles under the United Launch Alliance joint venture, which was granted anti-trust clearance by the U.S. Federal Trade Commission Oct. 3.

"They have the captive market for government contracts," Caceres said. "There’s more predictability in those markets. Now Lockheed (because of Boeing’s recent legal problems) has a bigger share, and there’s no need for marketing or competing for the government contracts."

The commercial market will remain crowded, with the Proton, Sea Launch and France’s Ariane rocket holding the majority of the market and Japan, China and India also trying to grab a share of the commercial market with government-owned rockets. A new player, Space Exploration Technologies, a privately owned U.S. company, also is developing a rocket it hopes will compete in the commercial arena.