[Satellite News – 3-26-08] After being grounded for more than a year, Sea Launch looks to have recovered from its January 2007 launch failure, and “regained our stride” with the launch of DirecTV-11 March 19, said CEO Rob Peckham.
    The DirecTV mission was the second launch performed by Sea Launch in 2008, and the provider had five more planned before the close of the year. For 2009, Sea Launch is nearly full, but may have some openings available for customers that may be seeking short-term solutions in the wake of the Proton failure.
    “I will never go out and take away anything from someone else, but we’re a launch service provider and if we have openings, I’m going to make that known and support customer requirements as much as possible,” Peckham said.
    Peckham spoke with Satellite News News Editor Jessica Pearce about the launch market in the wake of the most recent failure.

Satellite News: What impact will the Proton failure have on the industry?

Peckham: It was very unfortunate for all of us. A failure is something none of us want to see. That said, it’s going to probably have a schedule delay or slip that’s going to put pressure on end users to figure out ways to bridge the gap between when they thought were going to launch and when they are actually going to.
    … It’s going to have an impact in terms of capacity. Again, much like the aftermath of any failure, there are going to be schedule delays that put pressure on the end user to figure out how to deal with delay or switch launch vehicles. I don’t think the impact will be catastrophic. This industry is resilient and will recover.

Satellite News: Do you think with access to space being at a premium, launch providers are moving too quickly to return to service?

Peckham: They may want to, but they’re professionals. They’re not going to come back to flight before they’re ready. Just like any professional in this industry, if you have a problem you run it to ground no matter what kind of pressure people are putting on you. The cost of not doing it right is incalculable. You have to do it right. ILS (International Launch Services) won’t come back until they’re ready.

Satellite News: In the wake of the failures since January 2007, Jean-Yves Le Gall has divided the launch industry into two parts — Arianespace and everyone else. Do you agree with that assessment?

Peckham: We all have different ways of communicating our message to the world. Who am I to question the manner in which a competitor will go out and attempt to differentiate themselves from their competition? It’s bold, but it is what it is.
    I think there’s only one launch industry. We’re a delivery service. We deliver satellites to orbit. The only difference I’m aware of is Sea Launch and ILS launch one at a time. Arianespace launches two. This isn’t just the launch industry. This is the commercial space industry. Without a launch leg of the stool there is no industry. Without a healthy satellite manufacturing leg of the stool, there is no industry. We’re all in this together, and that’s why it’s so important that we stay together as an industry and not bad-mouth each other. We all have to be in this together. Each company has its own personal style on how you present yourself to the world. In my opinion everyone in the industry — competitors, insurers — have to be a team. We’re all in this together. There’s plenty of capacity.
    It’s all a matter of economics and when you get into economics that brings another differentiation. Sea Launch is really the only purely commercial provider. Everyone else is subsidized. We’re not. So I guess for what that’s worth, that’s a differentiator. In the big picture we’re all the same. Some cost more and some launch in the ocean and some on land, but we’re all doing the same thing.

Satellite News: Do you think that customers will pay a premium to use Delta 4 for a commercial launch?

Peckham: I would characterize that customers will pay a premium to get on orbit. Some of the end users have a lot at stake. Their entire business rests on timely delivery of a satellite into orbit. So if someone’s got to pay a lot more money [they will]. They might pay tens of millions more to launch their satellite. In the short term that’s a huge hit, but if you look at it over the lifetime of the program, if it’s a big satellite, tens of millions of dollars are lost in rounding. It’s the expenditure up front that drives decisions.

Satellite News: What does that mean for launch providers like you and ILS?

Peckham: Prices would be pretty high. I’m a big believer in the free market. The market will dictate who survives and who doesn’t. If you have a significant oversupply on a gross level of launch opportunities to meet commercial and government mission requirements, the spectrum of price from a customer’s perspective is a steep line. What is it worth to a customer to pay to get on orbit, especially in a time when the lower end of the price spectrum is full and there is no opportunity?
    We have one or two opportunities to sell in 2009 and that just depends on how satellite delivery and customer requirements evolve. I don’t typically ask my customer or potential customer. ‘Who is my competition?’, because I’m more focused on trying to highlight the differentiator that Sea Launch provides and going in on my own merits and I don’t really care who’s competing. I have no problem losing a fair fight.

Satellite News: Is the launch industry a failure away from crisis?

Peckham: Absolutely not. There is, if you counted up all the potential launch opportunities from all the launchers, if you add up all those you’re going to still be at a number that’s probably 120 percent of all the government and commercial launches. You’re still going to have an oversupply. I don’t think the industry is one failure away from crisis, but it may be that the commercial launch industry is one failure away from one evolutionary step.
    The Challenger accident [in 1986] was a crisis to a point because of NASA’s monopoly on spaceflight. So that was a moment, another evolutionary step. Not enough launch capabilities spawned Sea Launch. That was an evolutionary event to get us where we are today.
    The next step would be space exploration, developing rockets with totally private money. SpaceX had two failures, but it’s the beginning of their system. I say more power to them as a pure capitalist. What you’re undertaking no one in the world has succeeded in doing. If my product is competitive and reliable, my product will sell. It pays to ensure health across the board and make sure you have right number of launch providers. You can’t bring it down to a low level in terms of numbers because that becomes unhealthy. It’s a risky business. It’s unforgiving but I love it.