[Satellite News 03-18-10] Launch service providers said there are plenty of launch services in the market, despite FSS operator concerns about the lack of competition in this arena expressed in the opening panel of SATELLITE 2010.
    In the panel, “The Launch Vehicle Manifesto — New Options for Evolving and Existing Requirements,” Jean-Yves Le Gall, CEO, Arianespace, said there actually is overcapacity in terms of launch services available. “What they (FSS operators) are really saying is they want to have more cheap launch services in the market. There are more than enough launch services to serve the market. I don’t see any operators on the verge of bankruptcy,” he said.

    Le Gall warned that the continual clarion call for new launch service providers could ultimately prove very damaging for operators. “If operators want to destabilize the market, it will ultimately be more damaging for them,” he said, adding that launch service providers such as Arianespace provided good value for money. “I would say that is not only about supply and demand, it is about supply, demand and quality that defines an industry. We only have first-class passengers,” he said.

    Frank McKenna, president of International Launch Services (ILS), supported Le Gall, adding that now was the not the time to see a plethora of new launch service providers. “I am not too excited by this (the calls for more competition). The markets will rationalize. You need to capture business on the up cycle. I think we are on a very rocky road if we increase the (launch services) capacity at this time,” he said.

    McKenna also said competition for contracts are still pretty fierce. “There are heated competitions for satellite launch services. There are ongoing competitions. ViaSat was a horrendous competition, for example,” he said.

    Kjell Karlsen, president and general manager of Sea Launch, a provider that could continue to provide competition to Arianespace and ILS, said his company was on track to exit Chapter 11 bankruptcy in the near future. “We are very close to filing our plan to exit Chapter 11. We fully expect to emerge from Chapter 11 in the second quarter.” Sea Launch is working with two strategic investors (one being Space Launch Services, the other unnamed) in order to emerge as a stronger company, Karlsen said.

   Sea Launch performed four launches in 2009, one after filing for bankruptcy, and expects to begin launches again in 2011, Karlsen said.

   Sea Launch has somesupport from other launch providers who “want to see a third supplier in the industry,” Karlsen said, but there was some conflict between McKenna and Karlsen.

   McKenna said Sea Launch is cleaning up a “train wreck over a 10-year period. Karlsen responded that, “Although, ILS have benefited from our problems, we have launched satellites for blue-chip customers such as Intelsat and DirecTV. While our exit may have been a train wreck, I think in terms of reliability, we can match ILS over the last 10 years. We think there is a need for us in the market. We believe we will give customers flexibility in terms of access to space.”

   In terms of how Sea Launch’s entrance into Chapter 11 has impacted prices and the pricing trends going forward, McKenna said, “We actually lowered prices when Sea Launch went into bankruptcy. Our prices have stabilized. Sea Launch was not a heavy competitor in 2008 and 2009 in the launches that we won. We are trying to maintain prices at 2008 levels in launches over the next two years.”

   Yin Liming, president, China Great Wall Industry Corp., said the obstacle keeping his company from becoming more of a force in the international market is export regulations imposed by the U.S. government. “We want to become an active player in the international launch market. We believe this will benefit customers. We believe the Long March vehicle provides a strong alternative. We are pleased to learn the U.S. export rules could change. We hope these outdated restrictions will be removed,” he said.