New aspects of competition: Arianespace prospective

1. New aspects of competition: Arianespace prospective Michel Doubovick Vice President, Corporate & Governmental Affairs

2. Constant factors shaping launch services • Government concerns remain predominant worldwide • Strategic access to space • European specificity: low level of utilization • Stability of the launch service market structurally fragile • Commercial market: 20-25 spacecraft per year • Theoretical overcapacity conditioned by availability (Proton), sustainability (Sea Launch), costs (Delta IV, Atlas V), strategy (H-IIA), diplomacy (Long March), maturity (GSLV) • Arianespace performance: guaranteed access to space for Europe through commercial success • 248 satellites launched • Already 34 Ariane 5 launches performed (including 10 ECA) • European family of launchers to foster launch offer competitiveness (Ariane 5, Vega and Soyuz) • Most important order-book: roughly 40 satellites in backlog • Over 3 year ahead workload secured for the European industry (58 Ariane 5 currently in manufacturing)

3. Factors impacting European launch service prospective (1/2) • On the institutional side • Still lack of overall coherence (investment in launchers/utilization) • European preference for launching institutional missions • Optimizing institutional spacecraft compliancy with European launchers • Decision makers’ consciousness to strengthen regarding the European launch sector • For mid to long-term, Ariane 5 ECA, Soyuz and Vega will feet European needs • European launch sector sustained equally by commercial sales and public budgets

4. Factors impacting European launch service prospective (2/2) • On the market side • Market expectations are conservative • Reliability (technical stability), availability and service quality (schedule and visibility), dual procurement source • Current trends on the demand side • Boosting demand: in-orbit fleet replacement, HDTV, mobile connectivity (spacecraft growing in mass but compliant with current launch vehicle designs) • Difficulty to anticipate the long-term: remaining the reference standard is key • On the offer side • Market prices driven by the production costs of established competitors (Russian launchers) with a significant increase in $ during the last two years • €/$ exchange rate deteriorating European competitiveness • New era of trouble could arise from newcomers

5. Conclusion (1/2) • The European model performs well • Guaranteed access to space secured by commercial success and at market conditions • Commercial success in the long-run depending upon the ability to remain the reference • Current family of launchers able to satisfy requirements through robust production and exploitation conditions (reliability and flexibility) • Launcher sector related issues are growingly industrial ones • Launchers: operational instruments actually serving general policy objectives (information society purposes: science, defense and security, telecommunications,…) • European technical maturity broadly achieved • European launcher sector depending equally upon exploitation results (recurrent production) and budgetary funded activities (R&D)

6. Conclusion (2/2) • European decision makers must elaborate upon those factors regarding public involvement in launcher activities • Securing overall coherence of institutional decisions (using domestic launcher for their missions) • Whenever possible, preventing external factors (€/$ exchange rate, newcomers) from destabilizing the launch service market • Preparing decisions on future launcher activities and programs (ESA Ministerial Council in 2008) in accordance with exhaustive rationale (R&D/production and exploitation)