Author Topic: Sea Launch files for Chapter 11 protection  (Read 89386 times)

Offline Antares

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Re: Sea Launch files for Chapter 11 protection
« Reply #60 on: 06/26/2009 03:24 am »
the launch subsidies are about $200 million. Far less than Atlas or Delta.

Wait, what?  You're saying the price of an Ariane launch is $200M?  Or that Atlas or Delta get more than $200M per launch in government subsidies?  If the former, I wonder what it would be without the EU subsidies.
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Offline edkyle99

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Re: Sea Launch files for Chapter 11 protection
« Reply #61 on: 06/26/2009 03:50 am »

There the market leader by far and they're increasing production. Most of their orders come from outside France, and the launch subsidies are about $200 million. Far less than Atlas or Delta.

More like $269 million U.S dollars per year at current exchange rates.  The original European Guaranteed Access to Space (EGAS) program was funded at 960 million Euros spread over five years.  The EELVs are "subsidized" in the same way (infrastructure costs) at more than $1.2 billion per year.  Ariane and EELV aren't competing against one another, not really.  Ariane is becoming more and more a government launcher for Europe, just as EELV is for the U.S.  Proton is currently winning much of the world's commercial satellite launch business.

 - Ed Kyle 





« Last Edit: 06/26/2009 03:51 am by edkyle99 »

Offline JimmE

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Re: Sea Launch files for Chapter 11 protection
« Reply #62 on: 06/26/2009 04:00 am »
Seer - You must be joking. First, Atlas and Delta do not use their government subsidies to compete foir commercial launches at way below cost. Second, these subsidies per launch are massive. Ariane doesn't pay for ANY development costs (probably north of $15 Billion for Ariane 5 family so far) or for any CSG operating costs. I suppose one could say thank you, European (mainly French) taxpayer for lowering prices for Maerican consumers of satellite services. Since thed vast majority of the content on comsats is English language, we can also thank the French taxpayer for subsidizing the worldwide retreat of the French language.

Ed Kyle - No way is Ariane becoming "primarily a government launcher". They have about 25 commercial payloads on their manifest, about the same as proton.

JimmE

Offline mr.columbus

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Re: Sea Launch files for Chapter 11 protection
« Reply #63 on: 06/26/2009 08:59 am »
Seer - You must be joking. First, Atlas and Delta do not use their government subsidies to compete foir commercial launches at way below cost. Second, these subsidies per launch are massive. Ariane doesn't pay for ANY development costs (probably north of $15 Billion for Ariane 5 family so far) or for any CSG operating costs. I suppose one could say thank you, European (mainly French) taxpayer for lowering prices for Maerican consumers of satellite services. Since thed vast majority of the content on comsats is English language, we can also thank the French taxpayer for subsidizing the worldwide retreat of the French language.

Ed Kyle - No way is Ariane becoming "primarily a government launcher". They have about 25 commercial payloads on their manifest, about the same as proton.

JimmE

Ariane and Arianespace work differently. The big ESA memberstates, especially Europe, want a European launcher for orbiting military satellites and scientific spacecrafts. It's a political necessity.

What you could do is either just launch these few government paid for spacecraft on Ariane 5 OR you try to lower your costs per flight by also opening up the launcher for commercial launches. ESA with Arianespace opted for the second option. Arianespace is also a kind of large-scale subsidy for European aerospace companies (especially EADS) in that it is owned proportionally by the suppliers of Ariane 5 parts. While it doesn't really make any profits, the prices for the parts of Ariane 5 are that high that the shareholders (=suppliers) make quite some money by just continously manufacturing Ariane 5.

The US did something very similar with EELVs, however has opted for factoring commercial launch costs into commercial launch prices. As a consequence EELVs aren't competitive in the commercial launch market and nearly the total operating costs are born by the taxpayer through DoD and NASA launches only.

Online Herb Schaltegger

Re: Sea Launch files for Chapter 11 protection
« Reply #64 on: 06/26/2009 01:38 pm »
One other nugget to think about in terms of Sea-Launch and their desirability as a launch provider and their viability as a going concern:  despite a history of successful launches for Directv and the launch last year of Directv 11, the company chose not to exercise an option it holds for another launch for their Directv 12 vehicle.  Instead, Directv chose ILS and Proton again.  I'm sure there's a story there and I'd love to hear it, but I doubt anyone ever will.

As to Ariane V, I'm frankly surprised that their dual-payload mission profile and the inherent mission inflexibility hasn't hurt commercial launch services.  In other words, it would seem to me that trying to meet the expectations and desires of two separate customers for each launch campaign, and the scheduling issues involved in getting two payloads prepped, integrated and ready for launch simultaneously, would dissuade customers from signing on.  Obviously that hasn't happened, however.
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Offline mr.columbus

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Re: Sea Launch files for Chapter 11 protection
« Reply #65 on: 06/26/2009 01:44 pm »

As to Ariane V, I'm frankly surprised that their dual-payload mission profile and the inherent mission inflexibility hasn't hurt commercial launch services.  In other words, it would seem to me that trying to meet the expectations and desires of two separate customers for each launch campaign, and the scheduling issues involved in getting two payloads prepped, integrated and ready for launch simultaneously, would dissuade customers from signing on.  Obviously that hasn't happened, however.

Companies are treated a if they were doing single-launch missions. There is no technical penalty for the customer from doing a double-launch mission. In general, for customers what counts is launch on schedule, with a very high success possibility and moderate costs. Currently there is no other launch company in the world that provides the same mix as Arianespace does. Russia and China are lacking in quality of payload integration and partly in the success probability + there are issues with technology restrictions when it comes to those countries which can be more easily overcome by using Arianespace.

Offline edkyle99

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Re: Sea Launch files for Chapter 11 protection
« Reply #66 on: 06/26/2009 02:11 pm »
Ed Kyle - No way is Ariane becoming "primarily a government launcher". They have about 25 commercial payloads on their manifest, about the same as proton.

JimmE

"Becoming" is the word.  I'm talking about the trend.  Gunter's Space Page shows a hint of it.  http://www.skyrocket.de/space/
It lists 12 launches having either been performed this year, or planned to fly.  Seven of those 12 missions carry government payloads.

Keep in mind too that many of the satellites attributed to the Arianespace backlog are going to fly on Soyuz, not Ariane 5.

 - Ed Kyle
« Last Edit: 06/26/2009 02:19 pm by edkyle99 »

Offline McDew

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Re: Sea Launch files for Chapter 11 protection
« Reply #67 on: 06/26/2009 02:21 pm »
Getting back to the Sea Launch Chapter 11 filing.   One of the items they blame for not having a viable business and being able to compete commercially is "government-financed competition".  I think we can all agree that in the current launch vehicle industry you need to have the government as an anchor customer or provide subsidies to maintain a viable launch vehicle business.  Sea Launch does not, so I don't expect their business prospects to improve or for them to survive bankruptcy.

Offline nooneofconsequence

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Re: Sea Launch files for Chapter 11 protection
« Reply #68 on: 06/26/2009 05:06 pm »
This was why I mentioned "accommodation" - all governments do it.

The only way SeaLaunch continues is if the Ukrainian government cares for it to, or can it get by with LandLaunch alone?

N.B. the situation globally is shifting. Subsidies are used as instruments by governments to "keep alive" commercial activities that would otherwise be (temporarily or permanently) unprofitable businesses, because there is a reason for the country to maintain a presence. Witness the car industry with GM and Chrysler now - same deal, but lots more $$$'s.

Some "repricing" will happen with subsidies, as the amount in governments to source them has dropped, the number of competitors and price point is changing, and some governments may change their collective minds as to if certain industries are strategic needs to maintain. For example, does the Ukraine need a launcher industry to keep refining launchers to maintain an industrial base (and potential military capability, given its neighbors)?

Think about it.

add: You have to understand that the countries strategy for the subsidies matters here. For example, Airbus and Boeing are both subsidized to economically dominant the airliner business.

For another example, Ariane subsidies could *decrease* because they might not want too much production, because then it occupies too large a market share in a cyclical market that may have a downside trend, and they'd prefer to use the capital to participate in a different industry that has a large upside trend, so they can bring an economy back.
« Last Edit: 06/26/2009 05:41 pm by nooneofconsequence »
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Offline mr.columbus

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Re: Sea Launch files for Chapter 11 protection
« Reply #69 on: 06/26/2009 05:49 pm »
Getting back to the Sea Launch Chapter 11 filing.   One of the items they blame for not having a viable business and being able to compete commercially is "government-financed competition".  I think we can all agree that in the current launch vehicle industry you need to have the government as an anchor customer or provide subsidies to maintain a viable launch vehicle business.  Sea Launch does not, so I don't expect their business prospects to improve or for them to survive bankruptcy.

Government-financed competition won't go away. It's a global market, Arianespace, RSA, China and India will continue to provide launch services at a discount due to government financing. That's just how the launch comsat business works - it's a byproduct of national requirements of various countries to have their own launch capabilities. And it's not going to get any better in the future. More countries are developing rockets to launch their own payloads on and will try to get fixed costs spread over more launches by offering commercial services.

Offline marsavian

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Re: Sea Launch files for Chapter 11 protection
« Reply #70 on: 06/30/2009 08:51 pm »
http://www.space.com/news/090629-busmon-sealaunch-bankruptcy.html

Asked to comment specifically on the Sea Launch bankruptcy filing, satellite operators all said they assume Sea Launch will find a way to emerge from the process and continue operations.

“Having a robust pool of launch service providers is essential to the satellite industry,” Intelsat spokeswoman Dianne J. VanBeber said. “The launch sector should have broader participation — from the U.S., Japan and India to name a few. We have demonstrated our commitment to keeping the launch industry healthy, and to promoting a global pool of providers.”

Christopher McLaughlin, spokesman for London-based satellite operator Inmarsat, said the company relied on Sea Launch in late 2005 to launch the second Inmarsat 4 satellite after Inmarsat could not find suitable launch dates from ILS and Arianespace.

“We were very happy to have them there and available for us,” McLaughlin said.

Eutelsat spokeswoman Vanessa O’Connor said Eutelsat seeks to maintain the widest possible supplier base among launch service providers. “That has always been our policy,” she said.

SES spokesman Yves Feltes said SES has no Sea Launch missions on order but that “it is in our interest to have as many launch options available as possible. So the bankruptcy of Sea Launch is certainly not good news. At least the French now seem to be determined to keep Ariane 5 and 6 available for commercial launches.”


« Last Edit: 06/30/2009 09:11 pm by marsavian »

Offline McDew

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Re: Sea Launch files for Chapter 11 protection
« Reply #71 on: 07/07/2009 01:22 am »
Sea Launch filed a motion with the bankruptcy court last week to break their office lease and abandon their headquarters at One World Trade Center in Long Beach at the end of the month.

Offline RSC ENERGIA

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Re: Sea Launch files for Chapter 11 protection
« Reply #72 on: 07/09/2009 05:14 am »
Sea Launch prepares for massive firings of manpower and what Boeing calls reduction in force.  Severely More will come if no more 2009 launches and russia will regain ownership of profits its entitled to instead of subsidizing western launches.

Offline pippin

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Re: Sea Launch files for Chapter 11 protection
« Reply #73 on: 07/09/2009 10:52 am »
For another example, Ariane subsidies could *decrease* because they might not want too much production, because then it occupies too large a market share in a cyclical market that may have a downside trend, and they'd prefer to use the capital to participate in a different industry that has a large upside trend, so they can bring an economy back.
As much as this would make sense I just don't see it.
Most subsidies by far go into declining rather than growing businesses for the simple reason that
a) declining businesses typically decline from a higher level so have a lot of lobbying plus a large workforce to be laid off
b) Gov. typically is not very good at identifying new trends, the ones that really take off often don't need subsidies, new ones that do get subsidized often only live due to the subsidies (e.g. most "green" technologies).

Offline mr.columbus

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Re: Sea Launch files for Chapter 11 protection
« Reply #74 on: 07/09/2009 11:03 am »
For another example, Ariane subsidies could *decrease* because they might not want too much production, because then it occupies too large a market share in a cyclical market that may have a downside trend, and they'd prefer to use the capital to participate in a different industry that has a large upside trend, so they can bring an economy back.
As much as this would make sense I just don't see it.
Most subsidies by far go into declining rather than growing businesses for the simple reason that
a) declining businesses typically decline from a higher level so have a lot of lobbying plus a large workforce to be laid off
b) Gov. typically is not very good at identifying new trends, the ones that really take off often don't need subsidies, new ones that do get subsidized often only live due to the subsidies (e.g. most "green" technologies).

Also, Arianespace only receives its indirect subsidies through the money France and others pump into the launch complex in Kourou. Development costs for the current vehicle have been spent. Every launch from the commercial market spreads out fixed costs more for governmental launches. Plus, Ariane is a cash-cow for the consortium which builds it, every Ariane manufactured means profits for them and also means they can continue to employ people. Reducing the Ariane flight rate means those companies will have lower profits and may need to reduce their workforce, something which isn't desirable in Germany, France, Italy and Spain which are the main countries where Ariane parts are manufactured.

Offline mmeijeri

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Re: Sea Launch files for Chapter 11 protection
« Reply #75 on: 07/09/2009 12:08 pm »
I believe block-buys of Arianes by ESA also have the explicit, publicly announced goal of keeping Ariane competitive. This in effect is also a subsidy.
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Offline pippin

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Re: Sea Launch files for Chapter 11 protection
« Reply #76 on: 07/09/2009 01:04 pm »
I believe block-buys of Arianes by ESA also have the explicit, publicly announced goal of keeping Ariane competitive. This in effect is also a subsidy.
No, it is not. This is a purchasing policy. A lot of companies do that and they don't need govs for that.

Online kevin-rf

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Re: Sea Launch files for Chapter 11 protection
« Reply #77 on: 07/09/2009 01:22 pm »
I believe block-buys of Arianes by ESA also have the explicit, publicly announced goal of keeping Ariane competitive. This in effect is also a subsidy.
No, it is not. This is a purchasing policy. A lot of companies do that and they don't need govs for that.

There is a big difference between buying ten boxes of screws at $5 a box and Ariane buying 10 vehicles at X million euro a pop. The details are in the financing. If Ariane does not have to finance and service interest on the money being used for the buy, it is a subsidy.

(for those that are not in manufacturing, that is why "inventory" turns are so critical,  it is money you have tied up that you can not earn money with, and have to pay interest on if you borrowed the money to buy the inventory (another common practice) 12 is considered a good number, 26 or 52 (hard to do) is even better, though less than 1 turn a year is not uncommon for some companies) 
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Offline mmeijeri

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Re: Sea Launch files for Chapter 11 protection
« Reply #78 on: 07/09/2009 01:27 pm »
Block buys by themselves are not necessarily a subsidy, but ESA is using them with the explicit goal of providing continuity to EADS. That is what makes it a subsidy.
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Offline pippin

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Re: Sea Launch files for Chapter 11 protection
« Reply #79 on: 07/09/2009 02:05 pm »
OK, does this mean that ESA is guaranteeing the deal? THAT would be a subsidy, the block purchase itself would not.

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