DISRUPTING LAUNCH SYSTEMS · 2017. 12. 22. · These exceptional individuals helped shaping the...

DISRUPTINGLAUNCHSYSTEMSTHERISEOFSPACEXANDEUROPEANACCESSTOSPACE

ThesissubmittedtotheInternationalSpaceUniversityinpartialfulfillmentoftherequirementsoftheM.Sc.DegreeinSpaceStudies

August2017

Thesisauthor:PaulWohrer

Thesissupervisor:Prof.Jean-JacquesFavier

InternationalSpaceUniversity

PaulWohrer ii MSS-YearBThesis2017

1 AbstractTheriseofSpaceXasamajorlaunchproviderhasbeenthemostsurprisingevolutionofthelaunchsectorduringthepastdecade.Itforcedincumbentindustrialactorstoadapttheirbusinessmodeltofacethisnewcompetitor.Europeanactorsareparticularlythreatenedtoday,sinceEuropeanAutonomousAccesstoSpacehighlydependsonthecompetitiveedgeoftheArianelauncherfamily.Thisstudyarguesthattheframeworkofanalysiswhichbestdescribestheeventsleadingtothecurrentsituationisthetheoryofdisruptiveinnovation.Thestudyusesthisframeworktoanalysethereusabilitytechnologypromotedbynewactorsofthelaunchindustry.Thestudyarguesthat,whileconcurringwithmostanalysisthatthepriceadvantageofreusedlaunchersremainsquestionable,themostimportantadvantageofthistechnologyistheconvenienceitcouldconfertolaunchsystemscustomers.ThestudyofferstworecommendationstoEuropeanactorswillingtomaintainEuropeanAutonomousAccesstoSpace.ThefirstoneaimsatallocatingresourcestowardacommercialexploitationoftheVegasmalllaunchsystem,todisruptthegrowingmarketofsmallsatellitesandstrengthentieswithItalianpartnersinthelauncherprogram.ThesecondaimsatincreasingtheperceptionofEuropeanlaunchersasstrategicassets,toavoidtheircommoditization.TherecommendationentailsdevelopinganautonomousEuropeancapacitytolaunchastronautsintospace,whichcouldstrengthenthetiesbetweenFranceandGermanyaswellasleadtoarationalizationofthegeo-returnprinciple.ThiscapabilitywoulduseArianelaunchersandprovideEuropeanactorswithapowerfuldiplomatictool.


PaulWohrer iii MSS-YearBThesis2017

2 AcknowledgementsThisworkwouldnothaveexistedwithouttheoutstandingsupportofmyprojectsupervisorJean-JacquesFavier.Ideeplythankhimforhispatience,dedicationandforgivingmetheopportunityofshapingmycuriosityintoastructuredproject.Furthermore,hebelievedinmycapacitytotacklethisexcitingtopicandprovidedthematerialconditionstoinitiateit.Iextendhimmydeepestgratitude.JohnLogsdon,professoremeritus,generouslywelcomedmeattheSpacePolicyInstituteduringmytriptotheUnitedStates,andopenedthedoorsofthemostinterestingspaceexecutivestome.HealsoallowedmetowitnessSpaceX’sCRS10launchfromCapeCanaveral,whichwasoneofthemostintenseandexcitingmomentsofmylife.Fortheopportunitiesheprovidedme,forhisinvaluableexperienceandwisdominallspace-relatedmatters,Iextendhimmydeepestandmostsinceregratitude.IwouldliketoexpressmysinceregratitudetoXavierPasco,directoroftheFoundationforStrategicResearch,whoofferedmetheopportunitytoachievemythesisinfantasticconditions,andallowedmetoexpandmyknowledgeandperceptionofspacechallenges.Manyofthechallengesfacedduringthewritingofthisworkareduetotheownlimitationsofitsauthor.Hisbiggestassetswerebyfarthebenevolenceandpatienceofhisinterlocutors,whoacceptedtobeinterviewedforthisthesis.Theseexceptionalindividualshelpedshapingthesomewhatnaïveandidealisticperceptionoftheissuesinspacelaunchintoamorepertinentunderstandingoftheactualforcesatplay.Ithereforewishtodeeplythankallofthem:

• DavidQuancard,ChiefOperatingOfficeratArianegroup• ChristopheBonnal,SeniorExpertatCNES• AlainDupas,Physicist• OlivierBecu,ProgramManageratESA• JohannDietrichWoerner,GeneralDirectorofESA• LouisLaurent,SeniorVicePresident-AdvisortotheCEOforStrategicAffairs,

Arianespace• JohnLogsdon,Founder,ProfessorEmeritusofPoliticalScienceandInternational

AffairsattheSpacePolicyInstitute• Jean-JacquesTortora,DirectoroftheEuropeanSpacePolicyInstitute• ClayMowry,VicePresident–Sales,MarketingandCustomerExperience,BlueOrigin• PhilMcAlister,SpecialAssistantforProgramAnalysisatNASA• LoriGarver,GeneralManageratAirLinePilotsAssociationandformerDeputy

AdministratorofNASA• MarcTimm,programexecutiveatNASA• ScottPace,DirectoroftheSpacePolicyInstituteandexecutivesecretaryofthe

NationalSpaceCouncil• WilliamR.Claybaugh,BusinessManagementConsultant• WienerKernisan,PresidentofArianespace,Inc.• KenLee,SeniorVicePresidentofSpaceSystemsatIntelsat


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• LéonardPineau,CostEstimationandProjectControlEngineeratCNES• JérômeVila,AssistantDirectorResearchandFuturePrograms,SpaceLaunchersat

CNES• VictorNikolaev,CEOofStarsem• PascaleEhrenfreund,ChairoftheDLRExecutiveBoardandResearchProfessoratthe

SpacePolicyInstitute• PascalBultel,ReusableLaunchersM.R.O,Arianegroup• ThiloKranz,ProgramExecutiveatESA• AnexecutivefromSpaceXwhorequestedanonymity• AnexecutivefromUnitedLaunchAlliancewhorequestedanonymity• AnexecutivefromESAwhorequestedanonymity

Iwishtofinallyextendmygratitudetothemembersofmyfamilywhoimmenselycontributedtotheachievementofthisthesis:DominiqueWohrerandJoséAlberro,whokindlyhousedmyduringmystayinWashingtonDC,andLaurentSamuelwhoinspiredmetoreadaboutdisruptiveinnovation.


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3 Tableofcontents

1 Abstract......................................................................................................................ii

2 Acknowledgements...................................................................................................iii

4 ListofAcronyms.......................................................................................................vii

5 Listoftables............................................................................................................viii

6 Introduction................................................................................................................1

7 Motivation..................................................................................................................2

8 Methodology..............................................................................................................28.1 InterviewsofSpaceExecutives........................................................................................28.2 Reviewofrelatedwork...................................................................................................38.3 Challenges......................................................................................................................3

9 Structureofthethesis................................................................................................4

10 Theemergenceofathreat......................................................................................410.1 The1980s,theriseofArianeandtheShuttle..................................................................410.2 The1990s,Ariane4,EELVandinternationaljointventures.............................................610.3 The2000s,Ariane5andAmericanstep-down.................................................................810.4 SpaceXandNewSpace.................................................................................................10

10.4.1 ElonMuskandSpaceX................................................................................................1010.4.2 SpaceX........................................................................................................................1010.4.3 Falcon1.......................................................................................................................1110.4.4 Falcon9.......................................................................................................................11

10.5 TheEuropeanreaction..................................................................................................12

11 Whatisalaunchsystem?......................................................................................1411.1 Nation-statesandsupranationalentities......................................................................14

11.1.1 UnitedStates...............................................................................................................1411.1.2 France..........................................................................................................................1511.1.3 Germany......................................................................................................................1511.1.4 Italy..............................................................................................................................1611.1.5 EuropeanUnion..........................................................................................................17

11.2 Spaceagencies..............................................................................................................1711.2.1 NASA............................................................................................................................1711.2.2 ESA...............................................................................................................................1811.2.3 CNES............................................................................................................................19

12 Launchsystemsmarkets.......................................................................................1912.1 Marketscriteria............................................................................................................2012.2 Marketsegments..........................................................................................................21

12.2.1 SmallsatsandCubesats...............................................................................................2112.2.2 Spacestationresupplymissions..................................................................................2112.2.3 Smallcommercialsatellites.........................................................................................2212.2.4 Europeaninstitutionalsatellites..................................................................................2212.2.5 SmallinstitutionalAmericanpayloads........................................................................2312.2.6 BigcommercialGEOmarket........................................................................................2312.2.7 BigAmericaninstitutionalsatellites............................................................................2412.2.8 ThespecificcaseofHumanSpaceflight......................................................................25

13 Disruptiveinnovationsinlaunchsystems..............................................................26


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13.1 Whydisruptiveinnovation?..........................................................................................2613.2 Sustaininginnovations..................................................................................................2713.3 SpaceX’sdisruption.......................................................................................................2813.4 Europe’sintelligencefailure..........................................................................................3013.5 TowardsaCommoditizationoflaunchsystems?...........................................................31

13.5.1 Function:performanceofthelaunchvehicle,fairingsize..........................................3213.5.2 Reliability.....................................................................................................................3313.5.3 Convenience:launchontimeandflexibility...............................................................3313.5.4 Price.............................................................................................................................3513.5.5 Ariane’svaluepropositionandthedangersofdual-launch........................................36

14 Reusability,adisruptiveinnovation?.....................................................................3814.1 Thelong-lastingdebateovereconomicimpact.............................................................3814.2 Anoperationalmanagementproblem..........................................................................41

14.2.1 Reusabilityhindersthefunctionandreliabilityofalaunchvehicle............................4114.2.2 Reusabilitymayimproveconvenience........................................................................4214.2.3 Theunresolvedquestionofcostandprice:isareusedrocketstagecheaper?..........43

14.3 Thecostsofrefurbishmentandreuse:avaluechainproblem.......................................4514.3.1 Researchanddevelopmentcosts................................................................................4514.3.2 Productioncosts..........................................................................................................4514.3.3 ImpactofreusabilitycostsontheproductionofAriane5..........................................4614.3.4 ImpactofreusabilitycostsintheproductionofFalcon9...........................................4814.3.5 Standardization...........................................................................................................4914.3.6 Recoveryoperationscost............................................................................................5014.3.7 Refurbishmentcost.....................................................................................................5114.3.8 Futuremarketstrategies.............................................................................................53

14.4 Reusabilityisadisruptiveinnovation............................................................................56

15 Thepathforward..................................................................................................5715.1 DisruptingthemarketofsmallsatelliteswithVega.......................................................5815.2 ThePathtoEuropeanPreference..................................................................................6015.3 HumanAccesstoSpace,anenablerofEuropeancooperation.......................................62

15.3.1 EuropeanHumanAccesstoSpaceasaninstrumentofintegrationanddiplomacy...65

16 Conclusion............................................................................................................68

17 References............................................................................................................70


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4 ListofAcronyms3i International,Interdisciplinary,Intercultural

Ariane5ECA Ariane5EvolutionCryogéniqueA

Ariane5ME Ariane5MidlifeEvolution

ATV AutomatedTransferVehicle

CAPEX CapitalExpenditure

CEO ChiefExecutiveOfficer

CNES Centrenationaldesétudesspatiales:Frenchspaceagency

COTS CommercialOrbitalTransportationServices

CRS CommercialResupplyServices

CST-100 CrewSpaceTransportation100

DC-X DeltaClipperX

DLR DeutschesZentrumfürLauftundRaumfahrt

DOD USDepartmentofDefense

DTH Direct-To-Home

EADS EuropeanAeronauticDefenceandSpacecompany

EELV EvolvedExpendableLaunchVehicles

EGAS EuropeanGuaranteedAccesstoSpace

ELDO EuropeanLauncherDevelopmentOrganization

ELV EuropeanLaunchVehicle

ESA EuropeanSpaceAgency

ESRO EuropeanSpaceResearchOrganisation

EU EuropeanUnion

EUMETSAT EuropeanOrganisationfortheExploitationofMeteorologicalSatellites

FAR FederalAcquisitionRegulation

GEO GeostationnaryOrbit

GPS GlobalPositioningSystem

GSLVMkIII GeosynchronousSatelliteLaunchVehicleMarkIII

GTO GeosynchronousTransferOrbit

HOTOL HorizontalTake-offandLandingHTS High-ThroughputSatellite

ICBM IntercontinentalBallisticMissile

ILS InternationalLaunchService

IoT InternetofThings

ISRO IndianSpaceResearchOrganisation

ISS InternationalSpaceStation

ITAR InternationalTrafficinArmsRegulations

IXV IntermediateExperimentalVehicle

JAXA JapanAerospaceExplorationAgency

JWST JamesWebbSpaceTelescope


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kN Kilonewton

LEO LowEarthOrbit

M2M MachinetoMachine

MEO MediumEarthOrbit

NASA NationalAeronauticsandSpaceAdministration

NRO NationalReconnaissanceOffice

PHH Powder-Hydrogen-HydrogenPPH Powder-Powder-Hydrogen

R&D ResearchandDevelopment

SABRE SynergeticAir-BreathingRocketEngine

SLS SpaceLaunchSystem

SpaceX SpaceExplorationTechnologiesCorporation

SSTO SingleStagetoOrbit

STS SpaceTransportationSystem

SYLDA SystèmedeLancementDoubleAriane

TPS ThermalProtectionSystem

TV Television

ULA UnitedLaunchAlliance

ULCATS UltraLowCostAccesstoSpace

US UnitedStates

USA UnitedStatesofAmerica

USSR UnionofSovietSocialistRepublics

VEGA VettoreEuropeodiGenerazioneAvanzata

VTVL VerticalTake-offandVerticalLanding

5 ListoftablesFigure1.Criteriaforlaunchcustomers(AlibertiandTugnoli,2016)....................................................................20Figure2.Marketcriteriaforlaunchsystemselection...........................................................................................26Figure3.SpaceX'supmarketmoveovertime,inspiredfromTheInnovator’sDilemma(Christensen,1997)......30Figure4.Criteriafulfillmentbycurrentlaunchsystems.......................................................................................36Figure5.Ariane6industrialorganisation,highlightingthespreadoffacilitiesaccrossEurope(ESA,2017)........48Figure6.SpaceX'sownexpectedrevenueprojections(WinklerandPasztor,2017)............................................55

6 IntroductionWhenitwasincorporatedin2002,fewanalystscouldhavepredictedtheimpactSpaceXwouldhaveonlaunchsystems.Fifteenyearslater,ElonMusk’scompanyhasbecomeoneofthemostprominentrocketcompaniesintheworld.Defyingtheodds,thiseconomicplayerhasdevelopedtechnologicalandmanagerialmethodsthathavegarneredmomentumamongthespacecommunity,afterraisingsuspicionandincredulityfromestablishedplayers.OneoftheseincumbentplayersistheEuropeanArianerocket.Thislauncheris,since1979,themainvehicleofEuropeanaccesstospace,andtheprimaryvehicleusedbycommercialoperatorstolaunchsatellites.ThissituationresultsfromadeliberatestrategybyEuropeandecisionmakerstosupportthecostsofAriane’soperationswiththerevenuegeneratedbyitscommercialactivity.Todaythecurrentversion,Ariane5,isthemostsuccessfulcommerciallaunchvehicleintheworld.However,theemergenceofSpaceXhasputthedominationofArianeintoquestion,byprogressivelytakingaportionofAriane’shistoricallyhighmarketshares.ThisprocessledtothecurrentsituationwhereAriane’sleadershippositioninthecommercialsatellitemarketischallenged,andEuropeanactorsareforcedtoreact.ThemainquestionaddressedinthisreportistheevaluationofthethreatthiscompetitionputsonAriane,andthereforeonEuropeanAutonomousAccesstoSpace.Indeed,sincetheinceptionoftheprograminthe1970s,thecurrentperiodisshapinguptobethemostchallenging:forthefirsttimeofitshistory,theleadershipofArianeonthesatellitecommercialmarketisnotassured.ThissituationhasraisedtensionsamongpartnerstotheArianeprogram,thatpreviouseconomicsuccesshadcontributedtodismiss,andalthoughanagreementhasbeenobtainedbetweenEuropeanactorsonthedevelopmentofAriane6,thedividebetweenvariousinterestshaswidenedoverthelastfewyears.Europeanlaunchersenteraneraofuncertaintywherethefundamentaldriversmustbere-examinedandtheprioritiesredefined.IsthepolicydecisionwhichprevailedattheinceptionoftheArianeprogramstillvalidtoday?Isaccesstospaceastrategicasset,orhasitbecomeacommodity?Whattechnologiesshouldbepursuedconsideringthechallengesahead?WhichnewpracticescaninspiretheEuropeanlaunchsector,andwhatcomparisonwithcompetitorscanbedrawn?Finally,whatdecisionscouldbemadetostrengthenthecommitmentofvariousactorstoEuropeanAccesstoSpace?Thesearethequestionthisreportofferstoexploreandtentativelyanswerto.Severallimitationsmustnonethelessbeemphasized.Thisreportdoesnotaimatprovidingtechnicalorengineeringsolutionstohelpsolvingthecompetitionproblem.Itaimsathighlightingthecurrenttrendsintechnologicaldevelopment,butalsoprovidinganeconomicandpoliticalanalysistodrawattentiontopotentialfuturestrategies.Italsoaimsatexploringtheforcespertainingtothelaunchsectorinaninternational,interdisciplinary


PaulWohrer 2 MSS-YearBThesis2017

andinterculturalway,toprovideagreaterunderstandingofthevariousinterestsandactors,andhowtheyrelateandinteractinthischangingenvironment.Thethesisprovidesfewnumbersandcalculations,ontheonehandbecauseoftheapproximationsinherenttothesensitiveandproprietarynatureofdata,suchasvehicleprice,hardwarecostoramountsofpublicsubsidies,andonthesecondhandtoemphasizethelogicoftheunderlyingforcesatworkinthesector.

7 MotivationThemotivationforthisworkstartedwiththefirstlandingofaFalcon9rocketstageinDecember2015.ThisimpressivefeatofengineeringingenuitywashailedbymostactorsofthespaceindustryintheUnitedStatesbutsomewhatdismissedbyEuropeanexecutives(Lamigeon,2015).Thedifferencebetweensuchattitudesledtoquestiontherationaleofsuchadiscrepancy,whichledtoquestioningtherationaleforautonomousaccesstospaceandwhetherthiscapabilitycouldbethreatenedbyemergingtrendsinthelaunchsector.Thisinterrogationappearedsharedbyseveralactorsofthespacesector,whichpromptedaproposalforthepresentthesis.ThechoiceoffocusingtheanalysisonthecompetitionbetweenEuropeandtheUnitedStatesstemsfromtheassumption,widelyrelayedbythemediaandspecializedpress,thatthecurrentdisruptioninthelaunchsectorismainlyfuelledbySpaceX.Whilethisassumptionisnecessarilybiasedandrefutable,itprovidesastableframeworkofanalysistointerpretthelatestdevelopmentsinthelaunchsector.ThisconsciouschoicedoesnotaimatconcealingthecurrentchangesoccurringinthelaunchsectorofRussia,China,India,Korea,BrazilorJapan,whichalsohaveaninfluenceonEuropeanlaunchpolicy.ItdoesnoteitherprecludethefactthatcurrentdevelopmentbyotherAmericanfirmssuchasBlueOriginandUnitedLaunchAlliancemaybeequallyormorethreateningtotheEuropeanleadershipthanSpaceXdisruptiveapproach.Thisfocusnonethelessappearspertinenttoassesstheforcesatplayinthelaunchsectortoday,intermsofpolitical,economicandtechnicaldevelopments.

8 Methodology8.1 InterviewsofSpaceExecutivesThisworkwasconductedoverthecourseofayearwiththehelpofmanyprofessionalsfromdifferentcountries.Thefirstmethodusedtoassesscurrenttrendsandexpectationswasasetofinterviewsconductedwithkeyactorsinthelaunchsector.Thesesemi-structuredinterviewsusedasetofquestionsaimedatgatheringopinionsandmotivationswithregardstolauncherdevelopment,exploitationanduse.Intervieweesincludedexecutivesfromspaceagencies,industryandlaunchsystemscustomers,aswellasacademicsandconsultantsfromEuropeandtheUnitedStates,toprovidethewidestrangepossibleofopinionsontheseissues.ThecompletelistofintervieweesisavailableintheAcknowledgementsectionofthepresentreport.



Toaccomplishthegoalofunderstandingnotonlythetheoreticalframeworkoflaunchsystemsdevelopmentbutalsothedeepculturalandstrategicbiasthatpertainthecurrentevolutionofthesector,ajourneytotheUnitedStateswasaccomplishedduringthreemonths.StartinginJanuary2017inWashingtonDC,thestaycoincidedwiththeinstalmentofDonaldTrumpaspresidentoftheUnitedStates,aneventwhichmarkedtheopeningofanewperiodofuncertaintyinspacepolicy.8.2 ReviewofrelatedworkThesecondmethodusedisareviewofacademicandoperationalworkperformedbothonthetopicsoflaunchsystemsdevelopmentandinnovationpolicy.Themostinfluentialworksusedinthisthesiswere:

• OnthehistoryofEuropeanlaunchers:Krige,J.,2014.Fiftyyearsofeuropeancooperationinspacebuildingonitspast,ESAshapesthefuture.

• OnthehistoryofSpaceX:Vance,A.,2015.ElonMusk:HowtheBillionaireCEOofSpaceXandTeslaisShapingourFuture.

• Ontheeconomyofspacelaunch:Hertzfeld,H.R.,Williamson,R.A.andPeter,N.,2005.Launchvehicles:Aneconomicperspective.SpacePolicyInstitute.

• Ondisruptiveinnovationtheoryandconsequence:Christensen,C.M.,1997.TheInnovator’sDilemma:WhenNewTechnologiesCauseGreatFirmstoFail.HarvardBusinessSchoolPress.

• OntherelationshipbetweenEuropeanpartnersandpotentialsolutions:Penent,G.,2014.L’Europespatiale:Ledéclinoulesursaut.Paris:ArgosEditions.

8.3 ChallengesTheInternationalSpaceUniversity’s3iphilosophyisperfectlysuitedtothenatureofthework,whicharticulatesengineeringchallengeswithpoliticalinterests,economicdriversandculturalissues.Themethodsusedareempiricalinnature,sincetheopinionsofpeoplearetheirownanddonotnecessarilyreflectreality.However,theopinionsofthoseintervieweesareheldinhighregardsinthespacecommunity.Theiropinionshouldtherefore,atleastinpart,reflectthecurrenttrendspertainingthesectorandprovidethebaselineforthefuturedecisionswhichwillcontributetochangeit.Theworkentailedseveralchallenges,themostimportantonebeingthehighlyspeculativenatureofsuchforecasts.Indeed,historycanprovideexplanationsontherationalebehindengineeringdevelopments,butisdevoidofclearindicationsregardingthewayeventswillunfold.Findingatheorythatappearstoapplytothesetofattributesofanindustrialsector,andbuildingaforecastuponthistheoryisaconsciousrisksincerealeventstendtocontradictthemostcarefulpredictions.Thisisespeciallytrueintheunforgivingsectorofrocketry.



9 StructureofthethesisThisworkstartswithahistoricaccountarticulatedaroundtheparalleldevelopmentofcommerciallaunchvehiclesinEuropeandtheUnitedStates.Thesecondpartisanassessmentofthevalueoflaunchsystemsaccordingtoinstitutionalactors.Thethirdpartisamarketstudyfocusedonthecriteriabywhichcustomersselectalauncher.Thefourthpartisananalysisoftheevolutionsofthelaunchsectoraccordingtothetheoryofdisruptiveinnovation.Thefifthpartisaprospectiveanalysisofthepotentialofreusabilitytobecomeadisruptiveinnovation.ThesixthpartofthisprojectoffersrecommendationstoEuropeanstakeholders.

10 Theemergenceofathreat10.1 The1980s,theriseofArianeandtheShuttleThe1980sbeganwiththefirstflightsoftwoinnovativelaunchsystemsfromAmericancoasts.Thefirstone,Ariane,flewsuccessfullyforthefirsttimein1979fromFrenchGuiana,inSouthAmerica.Thespaceshuttletookflightlessthantwoyearslater,in1981,fromCapeCanaveralinFlorida.Thegroundwaslaidforacompetitionbetweentwoverydifferentapproachesoflaunchsystems.Thespaceshuttlewasthoughtasthevehicleofthefuture.Human-rated,reusable,equippedwiththelatesttechnologies,onlyfiveorbiterswerebuilttoprovideaccesstospaceforanysatellitetheUSAneededtolaunch,andevenmore.TheSpaceShuttlewouldopenthegatesofspaceforavastarrayofapplications,fromlaunchingreconnaissancesatellitestocreatingnewmaterialsanddrugsinmicrogravity.Tosummarize,thespaceshuttlewouldmakeaccesstospacecheapandroutine.Arianewasalmosttheexactopposite.ItwasbuilttoguaranteeEuropeanautonomousaccesstospace.EuropeangovernmentsdecidedtoobtainthiscapabilityaftertheUnitedStateslaunchedtheSymphoniesatellite,undertheconditionthatitwouldnotbeusedforcommercialpurposes(CNES,2017b).AfterthefailureoftheEuropaprogram,duetopoorprojectmanagement,theArianeprogramemergedwithanimportantFrenchoversight.ThetechnologiesusedforArianeweremuchsimplerthantheirAmericancounterparts:thelauncherwasexpendable,usedhypergolicfuelanditsperformancewerenotexceptional.Itbecameacommercialsuccess.Intheory,nothingcouldhavepredictedthesuccessofAriane.ThislaunchsystemistheheiroffailureanddisappointmentinaEuropeanenterprise,wheretheSpaceShuttleisthesymboloftheUnitedStatesconqueringmind-set,builtfromtheheritageofApolloandthespiritofthespacerace.Yet,afterfiveyearsofcommercialoperations,theChallengeraccidentleftArianeasthesolesupplierofcommerciallaunchesinthewesternworld.AnalysingthisperiodasasuccessforArianeandfailurefortheSpaceShuttleoversimplifiestheissue,buttheseformativeyearsareofgreatimportancetounderstandthedivergingpathofAmericanandEuropeanlaunchsystems.



AfundamentaldriverforthecreationofaEuropeanlaunchcapabilityisautonomy.BeingabletolaunchsatellitesandoperatingfreefromrestrictionsimposedbyothercountrieswasattheheartofthewishforthedevelopmentofAriane.AsJohnLogsdonsays,“Spaceisessentialtothesecurity,tothewell-beingofthepopulation,inoneword,tothequalityofcivilization”(Logsdon,2017).TheSymphonieepisodemadesuchanimpressiononEuropeansthattheArianeprogramwentforward,aimingatconqueringtheverypromisingmarketofcommunicationsatellitesstillinitsinfancy.ThisfocusedstrategywastheheartofthelogicthatwouldexplainfurtherdevelopmentsofEuropeanlaunchsystems:Governments,throughspaceagencies,payedforthedevelopmentoflaunchsystems,whileoperationalcostswerecoveredwiththesaleofthosesystemsonthemarket.Thelaunchersthemselveswerenotsold:the“launchservice”was.Thisideaof“launchservices”wascreatedbythefirstlaunchservicecompany,Arianespace,incorporatedin1980,afewmonthsafterthefirstsuccessfulflightofAriane1.FullsubsidiaryofCNES,theFrenchspaceagency,thecompanywasthecommercialarmofEuropeforlaunchservices.ThefaceofunitybehindtherationaleofautonomyinspacehidamorediverseandcomplexpoliticalstruggleamongEuropeanpartners.Indeed,Francewasveryattachedtothenotionofindependentaccesstospace,butGermanywasnot.ThiswasclearlyvisibleduringthebreakdownofELDO,theEuropeanLauncherDevelopmentOrganization,whichfailedtodeveloptheEuropalaunchsystem.WhenFrancecamewithanewproposalforthelauncherthatwouldbecomeAriane,theGermanministerofresearchwasstoppedfromwithdrawingfromtheentirelauncherprogramonlybyavetoimposedbyhisforeignminister(Krige,2014).Thisdividebetweenpartnersinthelauncherprogramneverdiminished,andthemereexistenceofEuropeanlaunchers,asmuchofotherspaceprograms,wastheresultofpermanentdialog,negotiationsandcompromises,aswellastacitagreements.GermanynevergaveasmuchimportancetolaunchsystemsasFrance,insofarastheyconsiderthosevehiclesascommoditiesratherthaninstrumentsofsovereignty.Therefore,tosatisfyGermany,acooperationprograminhumanspaceflightwithNASAwasdecidedandSpacelabfundedbyESRO,theorganizationthatwouldlaterbecomeESA,theEuropeanSpaceAgency.ThiscooperativeprogrambetweenEuropeandtheUScouldbeconsideredasthecounterparttothecompetitiveArianeprogram(Penent,2014).JohnLogsdonsaystheUSreactiontotheArianeprogramwas“almostirrationallycompetitive”(Logsdon,2017).TheShuttleprogram,builtupontheideathatreusabilityandhighlaunchrateswouldmakeitthevehicleofchoiceformostsatellitesoperators,includedinitsbusinessplanthatmostcommercialsatelliteswoulduseittoreachorbit.From1982to1986,therewasafiercewarpricebetweenbothlaunchvehicles,astatedpolicygoaloftheShuttlebeingtoundercutAriane’sprices(ReedBusiness,1981).“Arianespacecouldofferverynicebusinessterms,andoffertoflytoKourouontheConcordetowitnessalaunch.So,in1982,moreorlessexplicitly,NASAofferedtoanybodywhoboughtaShuttlelaunchtoflysomebodyintospacewiththesatellite.Thatisprettygoodmarketingadvantage!”(Logsdon,2017).



ThiscompetitionbetweentheUSandEuropebeganintheearlydaysofAriane.Morethanaregularcommercialcompetition,launchersweresymbolsofnationalprideandchauvinismwasatstakeonbothsidesoftheAtlantic.USstakeholdersnotablyaccusedEuropeofsubsidizingheavilytheirlauncher,effectivelydumpingpricessonofaircompetitioncouldemergefromtheUnitedStates.Thisclaimwasdisprovedattheendofthe1980s,sinceEuropeansubsidieswerenolargerthanAmericanones.(Krige,2014).In1986,Challengerdisintegrated73secondsafterlaunch.Thiseventchangedthefaceoflaunchcompetition,withtheabruptwithdrawaloftheSpaceShuttlefromanycommerciallaunch.“NotonlywouldtheSpaceShuttlestopcompetingonlaunchcontracts,butitwasdecideditwouldnothonourthosethathadbeensignedpriortotheaccident”(Logsdon,2017).TheconsequencesoftheaccidentwerearenewedinterestfromUSfirmstomarketexpendablelaunchvehicle.RampingupAmericanproductionofexpendablevehiclestooktime,leavingArianespaceasthemaincommerciallaunchproviderinthewesternworld.Arianeevolvedthroughdifferentversions:Ariane1wasreplacedwithAriane3,thenAriane2andfinallyAriane4whichtookflightin1988.ThedesignofAriane4isthedirectheritageofpreviousversions.Attheendofthe1980s,theweightofcommercialsatellitesgrew,aswellasEuropeanspaceambitions.Anewprogramwasproposed,onethatwouldgiveEuropeautonomousaccesstospaceforunmannedplatformsaswellasastronauts:Ariane5andtheHermesspacecraftweredecidedin1988.Ariane5shouldusealargecryogenicengineunderdevelopmentatCNES,theVulcain,morepowerfulandenvironmentallyfriendlythantheheritageVikingthatusedtoxicfuelaspropellants.Thisfirstdecadeoflaunchcompetitionendedonaneventthatchangedthefaceoftheworld:onNovember9th,1989,theBerlinWallfell,promptingtheendoftheSovietUnionandtheColdWar.ThiseventopenedaneweraforspacelaunchasRussianrocketmanufacturersandICBMstockpilesbecameavailabletothewesternmarket.10.2 The1990s,Ariane4,EELVandinternationaljointventuresAtthebeginningofthe1990s,manyprogramsbarelyoperationalduringthe1980swereramping-up.NewlaunchvehicleswereoperatedintheUnitedStates,sincetheSpaceShuttlewasnowdedicatedtonon-commercialandnon-militarylaunches.TheAtlasII,thenIII,theheavy-liftTitanIVdevelopedbyLockheedMartin,andtheDeltaIIdevelopedbyBoeingallflewforthefirsttimeattheendofthe1980s.Ariane4becametheworkhorseofEuropeanlaunchcapabilityandacommercialsuccess,launchingmorethan60%ofthecommercialsatellitesavailableontheopenmarket.Thelauncherremainedoperationaluntil2003,evolvingwiththeneedsofthemarket.Itsmodulararchitectureallowedforanoptimizationoftheperformanceaccordingtotheclient’srequirements.Thelauncherwasmodularsoitcouldbefittedwithavarietyofstrap-onliquidandsolidboosters.The44LPversionofAriane4used8Vikingenginesinitsfirststage.Thelauncheralsousedadual-launchconfiguration,whichallowedcustomerstolaunchtwosatelliteswiththesamelauncher,reducingthecostofthelaunchservicethat



wassharedbetweenbothcustomers.Ariane4confirmeditsleadershipinthecommercialmarket,fromlaunching5timesin1990tolaunching11timesin1997.Intotal,116Ariane4havebeenlaunched,with113successesand3failures.Nonetheless,theweightofcommercialsatelliteskeptgrowing.Ariane5developmentcontinued,Ariane4beingthelaststepofanincrementallyevolvingconfigurationstartedwithAriane1.EngineersfromCNESforecastedincreasingsatellite’smassthatwouldnotallowAriane4toremaincompetitivepasttheendofcentury.ThefirstflightofAriane5tookplacein1996,butendedinfailure.EuropehadtorelyonAriane4until2003tomaintainitsindependentaccesstospaceanditsmarketdominance.AnotherblowtoEuropeanambitionswasthecancellationoftheHermesspaceplanein1992.FirstEuropeanattempttogainanautonomouscapabilityinhumanspaceflight,theprogramwascancelledaftercostsandweightconsiderationsputthefeasibilityofthespaceplaneintoquestion.AnotherreasonfortheendofHermeswasthedecisiontojointhebroadeffortfromtheUnitedStatesandRussiatobuildanInternationalSpaceStation.Bothpartnershavingaccesstothestationindependently,theEuropeancontributiontookasaferpathwiththeColumbusprogramandtheAutomatedTransferVehicle.ColumbuswasthesecondstepofthetacitagreementbetweenFranceandGermanywithregardstothedevelopmentoflaunchersandhumanspaceflightcapabilities.Ariane5wasaprogrammainlysupportedbyFrance,andColumbuswaspromotedbyGermany(Penent,2014).TheopeningoftheformerSovietUniontowesternlaunchprovidersofferedthepossibilitytobuildinternationaltradecooperation,whiletakingadvantageofthemanyresourcesandtalentspresentinformerUSSRcountries,especiallyRussiaandUkraine.Severalinternationaljoint-venturesemergedinthemiddleofthe1990s:

• InternationalLaunchServices(ILS),ajointventurebetweenLockheedMartin(USA),Khrunichev(Russia)andEnergia(Russia).Itisincorporatedin1995,itsheadquarterslocatedinArlington,Virginia,USAanditmarketedtheAmericanAtlasfamilyandRussianProtontocommercialoperators.

• SeaLaunchwasajointventurebetweenBoeing(US),KvaernerGroup(Norway),RSCEnergia(Russia)andSDOYuzhnoye/POYuzhmash(Ukraine).Incorporatedin1995inLongBeach,California,thislaunchcompanywasveryoriginalsinceitusedaplatformouttoseatolaunchfromalocationneartheequator.ThisprovideditscommercialpayloadswithanadditionalboostfromtheEarth’srotationwhenusingtheZenitlauncher.ItsgoalwastomarkettheAmericanDeltalauncherfamilyandtheUkrainianZenit3SL.

• StarsemisajointventurebetweenRoscosmos(Russia),TsSKB-ProgressSamaraSpaceCenter(Russia),EADS(Europe)andArianespace(Europe).Incorporatedin1996inEvry,France,thelaunchcompanyaimedatmarketingtheSoyuzlaunchsystemfromBaikonour,Kazakhstan,andKourou,FrenchGuiana.StarsemisasubsidiaryofArianespace.

Thosenewcompaniesandtheirlaunchvehiclesanticipatedabigsurgeinlaunchdemand.Lookingbackinthe1990s,companiessuchasIridium,OrbcommandGlobalstarwerethoughttohavethepotentialtotriggeraveryhighdemandinlaunchservices.Market



forecastspromisedthatsatelliteconstellationswouldgreatlypushthedemandforlaunchsystems.ThathopeledLockheedMartinandBoeing,whowerecompetingtowinanAirForcecontractcalledEvolvedExpendableLaunchVehicles(EELV),toconvincetheUSgovernmenttofundbothDeltaandAtlaslaunchsystems.Whenthetelecombubbleburstin1997,thedecisionwasmadetokeepbothsystemsforredundancypurposes.The1990sseeanincreaseincompetitionforlaunchvehicles,especiallyaftertheSovietUnioncollapsedandmostofitstechnologicalheritagebecameavailableonwesternmarkets.Russianengineswereknowntobesturdy,cheapandveryefficient,whichexplainswhytheLockheedMartinAtlasVdesignusesanRD-180enginebuiltinRussia.Attheendofthecentury,hopeswerehighforlaunchoperators:satelliteTVwasdevelopingrapidlyandthedemandforbandwidthwasgrowing.Arianespacewastheworld’snumberonecommerciallaunchoperator,withAriane4beatingreliabilityrecords.TheinitialfailureofAriane5wasnonethelessproblematicandthreatenedthepoliticallyfragileagreementsbetweenEuropeanstakeholders.10.3 The2000s,Ariane5andAmericanstep-downContrarytomostestimates,themarketforcommercialspacelaunchatthebeginningofthe21stcenturytookasharpturndown.Demandremainedlimitedfrom15to20satellitesperyear,ofwhichArianecouldhopetolaunch5or6.Themarketfacedanovercapacity,withthesupplyforlaunchservicesbecomingsuperiortothedemand,drivingpricesdownforthefirsttime(AlibertiandTugnoli,2016).IntheUSA,bothlaunchersdevelopeddomestically,theDeltaIVandAtlasV,sharedtheAmericaninstitutionalmarket.Indeed,thelawforcesUSgovernmentsatellitestobeorbitedbylaunchersatleast51%American(Lamigeon,2015).Americanfirmscouldnonethelesscompeteonthecommercialopenmarketthroughtheirrespectivesubsidiary,SeaLaunchandInternationalLaunchServices,whichmarketedRussianlaunchers.TheycouldundercutArianepricesby20-25%atthebeginningofthe21stcentury(Krige,2014).In2002,thefirstlaunchofthenewlydesignedAriane5ECAwasafailure.ThiscombinationoffactorsputAriane5inaprecarioussituation.In2003,ESA’sministerialmeetingagreedtofundAriane5return-to-flight,aswellastheESversion,abletocarrytheATVcargovehicle.Thetotalcostofthisoperationwasexpectedtobe€706million.Thisministerialmeetingalsomadethedecisiontofundanewprogramtocoverpartsofthefixedcostssufferedbyindustrialpartners.TheprogramiscalledEGAS,forEuropeanGuaranteedAccesstoSpace,and€960millionwereprovisionedforAriane5’snexttenyearsofoperation(Krige,2014).ToguaranteeEurope’scapabilitytolaunchinstitutionalsatellitesandsmallGTOpayloads,the2003ministerialmeetingalsodecidedthatSoyuzwouldbelaunchedfromtheGuianaSpaceCenter.Thefirstlaunchhappenedin2011.Indeed,apartfromtheAutomatedTransferVehicleandanoccasionalmilitarycommunicationsatellite,Ariane5hadbecomeapurelycommerciallauncher,theweightdifferencebetweeninstitutionalandcommercialsatelliteshavingincreasedovertime.



TheseimportantfinancialcommitmentsfromEuropeanpartnerscameataprice:theEuropeanlaunchsectorwasreorganizedaroundasingleprimecontractor,EADS.Arianespaceremainedthelaunchoperator,andwasthemaincommercialandmarketingaswellasaprocuremententityforEuropeanlaunchers.ESAbecamethemainauthorityindevelopmentanddesign.ThismeantthatESAprocureddevelopmentcontractstonationalspaceagencies,includingbutnotexclusivelytoCNES,theFrenchnationalspaceagencyhistoricallyresponsibleforlauncher-relateddevelopments.ThesituationimprovedforAriane5attheendofthedecade.Thelaunchvehicleisextremelyreliable,andabletolauncheventheheaviesttelecommunicationsatellites.Customerneedswerefulfilledwiththelaunchvehicle,butcouldalsorelyonotherlaunchprovidersifadedicatedridewasneededorArianeencounteredaproblem.EuropeanindustriesbuildingArianealsobenefitedfromthehigh-techimageofthelauncher,softpowerbecomingaspinoffofthesuccessfulspaceprogram(Krige,2014).In2006,USdomesticlaunchprovidersLockheedMartinandBoeingmergedinajoint-venturecalledUnitedLaunchAlliance(SpaceNews,2004).Thiscontroversialdecision,whicheliminatedanycompetitionfromtheUSinstitutionallaunchmarket,waslargelyduetothecollapseofthetelecommunicationmarketattheendofthe1990s.Indeed,bothcompaniesplannedtousetheirEELVtocompetewithincumbentcommerciallaunchcompanies,butthoseplansfalteredasdemanddropped.InsteadtheyconcludedwhatJohnLogsdoncallsa“sweetheartdeal”(Logsdon,2017)withtheAmericangovernmenttolaunchnationalsecuritysatellites.ThesecurityoftheUnitedStatesincreasinglyreliedonspaceassets,evenforconventionalwarfare,asshownbytheeventsoftheGulfWar.Theadventofthewaronterrorfollowingtheterroristattacksof9/11in2001meantthattheUSneededareliablelaunchservicefornationalsecuritysatellites(Large,2008).Theplannedjoint-ventureraisedsuspicionsofcreatingamonopolyleadingtoanunfairadvantageforitsparentcompanies,notablybecauseBoeingandLockheedalsobuiltsatellitesandcouldfavourtheirdesignoverthoseoftheircompetitors.NorthopGrummanwasverycautiousovertheagreement,raisingconcernsthatitcouldpotentiallyviolateantitrustlawsandcreateade-factoduopolyforgovernmentsatellitemanufacturing(SpaceNews,2004).TheotherissueisthattheUSinstitutionallaunchmarketrepresentsbillionsofdollarsincontracts,apotentialsourceofrevenueforcompaniesthatareauthorizedtobidonthesecontracts.However,thecontextatthetime,acknowledgedevenbystrongsupporterofcommercialcompetition,meanttherewaseffectivelynorealcompetitioninthemarket,sinceneitherLockheedMartin’snorBoeing’slauncherdivisionswouldbeallowedtogooutofbusinessbythegovernment.Thisexplainedtheequaldivideofnationalsecuritylaunchesbetweenbothcompetitors.Duetothestringentrequirementsofgovernmentlaunchesandthelackofathirdplayer,thesedivisionswerenotveryprofitableandcompetitionwasunsustainableinthelongterm.Asthebusinesscaseofbothvehiclewasunabletoclosegiventhecompetitiononthecommercialmarket,theassociation,sometimesqualifieda“shotgunwedding”(SpaceNewsEditor,2004),occurredasplannedandUSdomesticlauncherswithdrewfromthecommerciallaunchmarket.



In2006,theonlycompetingoperatorsonthecommerciallaunchmarketwereArianespace(Ariane5),InternationalLaunchServices(Proton)andSeaLaunch(Zenit).ThemostimportantdevelopmentsevokedbylaunchprovidersatthetimecamefromChina,stillbarredfromlaunchingwesternsatellitesbyITARregulationsdespiteagoodtrackrecordoftheLongMarch3blauncher,JapanwiththeongoingdevelopmentoftheH-IIBheavyliftvehicle,andIndiadevelopingtheGSLVMkIIIheavyliftvehicle,potentiallyabletocompetewiththethreeincumbentlaunchproviders.TheseconcernsweightedheavilyonthemindsoftheparticipantsoftheSatellite2006conference,whoweregladtorelaxandlaughastheylistenedtothespeechofayoungspaceenthusiast.Hehitsthestagestartingwith“Hieveryone,IamElonMusk.IamthefounderofSpaceX.Infiveyears,youarealldead.”(Lamigeon,2014)10.4 SpaceXandNewSpace10.4.1 ElonMuskandSpaceXBorninSouthAfrica,ElonMuskimmigratedintheUnitedStatesin1992.HedroppedoutofStanford,wherehewaspursuingaPhDinappliedphysics,tostartacompanynamedZip2,asoftwarecompany,withhisbrother.Compaqacquiredthecompanyin1999,makingElonMuskamillionaire.HequicklyreinvestedhisprofitintoanonlinebankcalledX.com,whichlatermergedwithacompanyfeaturingapaymentserviceknownasPaypal.Thecompanyfocusedonthisservice,andwassoldtoEbayin2002for$1,5billion,ofwhichMuskreceived$165million.Passionateabouthigh-technologyandsciencefictionasateenager,ElonMuskfounditeasytorenewwithhisinitialenthusiasmafterbecomingamillionaire.Oneofhisnotablemeetingsiswithaninfluentialfigureofspaceadvocacy,RobertZubrin,knownfor“ThecaseforMars”hewrotein1994,abookadvocatingforahumancolonizationoftheredplanet,aswellasaharshcriticismofNASA’splansandmanagement.RobertZubrinisthedirectorofoneofthemostimportantsocietiesofspaceenthusiasts,theMarsSociety.HetalkedElonMuskintofundingascienceexperimenttobesenttoMars,agreenplantgrowinginsideasphere,toreinvigoratepublicenthusiasmforspaceexplorationandpushingforanincreaseinNASA’sbudget.ElonMuskwasenthusiastic,thedesignandgoaloftheexperimentseemedsatisfactory.ThemissingpartwasalaunchvehicleabletoputthepayloadonaMarsinjectiontrajectory.Sincehewantedtofundtheexperiencewithhisowncapital,thebestrocketwouldbethecheapestavailable.TogetherwithMikeGriffin,anotherspaceenthusiastfromtheMarsSocietywhowouldlaterbecomeNASA’sadministrator,theyflewtoRussiatonegotiatealaunchoftheexperimenton-boardaDneprrocket.The$8millionpricewasjudgedtoohighbyElonMusk,whoendedthenegotiationsfrustrated.OntheplanebacktoAmerica,hecalculatedthatitwouldbecheapertoproducethelaunchershimself.HeincorporatedSpaceExplorationsTechnologiesin2002.10.4.2 SpaceX



ElonMuskinstalledhiscompanyinHawthorne,acityinLosAngelesCounty,California.Thestatedgoalofthecompanywastoreducethecostofaccesstospace.OneoftheoriginalitiesofSpaceXwasthatitdidnotpursuethedevelopmentofnewpropulsiontechnologies,atleastnotatthestartofthecompany.Indeed,contrarytomanystart-upsofthetimethatsharedtheambitionoflaunchingsatellitesorpeopleinspace,SpaceXreliedonheritagetechnologyforitsorbitalvehicle:theengineswereprobablyanevolutionoftheFastracandTR-106enginedesignsconceivedduringNASA’sSpaceLaunchInitiativeprogram,whosedesignborrowedtechnologiesfromtheLunarModuleoftheApolloProgram,includingapintleinjector(TRWNewsRelease,2000).Theproductionorganizationwasoriginalanduncommonintheaerospaceindustry.SpaceXdevelopedandmanufacturedmostcriticalcomponentsin-house,inaverticallyintegratedfashion.Lessexpensivehardwarewasboughtoff-the-shelffromcommerciallyavailableproduction.TomMueller,ChiefTechnicalOfficerandfoundingmemberofSpaceX,declaredthat“SpaceXavoidsspacevendorsliketheplague”(Mueller,2017).SpaceXstrategyinthoseearlydaysaimedatreducingthecostofaccesstospace,notbydevelopingbreakthroughtechnology,butthroughdrasticrationalizationofproductioncapabilities.Jean-YvesLeGall,presidentoftheFrenchspaceagency,wasimpressedafteravisittotheirHawthorneproductionfacility.“Steelsheetsgetin,rocketsgetout”(Delanglade,2015).10.4.3 Falcon1SpaceXfirstlaunchvehiclewasaimedatbeingthe“minimalusefulorbitallauncher”.Thistwo-stagesrocketcouldput420kgina185kmcircularlowearthorbit.Thestatedpriceforlaunchwas$7,9million(SpaceX,2007).ElonMusk,aswouldsoonbecomecustomary,targetedaveryambitiousfirstlaunchdateofonly15monthsafterthestartofthecompany.Thefirstattemptatlaunchingthisspacecraftdidnotoccuruntil2006.Afterthreefailures,Falcon1madeasuccessfullaunchin2008,andasecondonein2009.Thiswasonlythethirdtimeaprivatelydevelopedlaunchsystemhadsuccessfullylaunched,aftertheConestogaandthePegasusrocketsinthelate1980s.Theprogramwasthencancelledandtherocketneverflewagain.ThereasonswereexplainedbyGwynneShotwell,presidentandCOOofSpaceX,whosaid“Themarketwasjustnotthere,andwhenthetargetmarketcrashedin2010itreallymadethatvehiclealmostimpossibletokeepgoingandmakemoney”(Henry,2016).In2008,SpaceXaswellasElonMusk’sotherventure,Tesla,ranintofinancialtrouble.ElonMuskhimselfhadspenthisentirepersonalfortuneinbothcompanies,andwasindebt.SpaceXhadthenrenouncedtodeveloptheFalcon5,andfocusedinsteadontheFalcon9rocket,capableofputting10tonstoLowEarthOrbit.FollowingthecommercialfailureofFalcon1,resourceswerescarceand,evenwithasuccessfullaunch,SpaceX’sfinancialsituationwasbad.OnDecember23rd,2008,NASAgrantedSpaceXacontractfor$1,6billiondollarstodelivercargototheInternationalSpaceStation,whicheffectivelysavedthecompany(Vance,2015).10.4.4 Falcon9



Falcon9isthelaunchsystemthatcanchallengeAriane5todayintermsofcommercialvalue,butthiswasnotalwaysthecase.Thefirstversionsuccessfullyflewin2010,andthelaunchvehiclequicklyevolved.Falcon9v1.0flewfourtimesbeforebeingreplacedwithasecondversion.ThisvehiclewasnotaspowerfulasthecurrentversionofFalcon9,capabletoputlessthan5tonsinGTO(SpaceX,2012).AlltheflightscarriedatestorliveversionoftheDragoncapsule,intendedforcargodeliverytotheISS.Falcon9v1.1,asthesecondversionwascalled,wasveryclosetothecurrentfleetofvehicles.Itfeaturedastreamlinedfuselagewitharearrangementoftheengines,anengineredesignaswellasstretchedtankstoholdmorepropellant,increasingpayloadcapability.ItwasalsothefirstversionofFalcon9thatSpaceXtriedtorecover,afterthesuccessfultestsoftheirGrasshoppertestvehicle.SpaceXexperiencedtheirfirstlaunchfailurewithaFalcon9vehiclein2015,delayingthenextlaunchbysixmonths.Thereturn-to-flightmissioninDecember2015wasthefirstflightoftheFull-ThrustversionofFalcon9,andthefirstsuccessfulrecoveryofthefirststageofthelauncher.ThesecondrecoveryoccurredinApril2016onadroneshipatsea.InSeptember2016,SpaceXsufferedanexplosionontheLaunchpad,whichdestroyedFalcon9andtheAmos6satelliteonboard,postponingfurtherlaunches.InJanuary2017,Falcon9returnedtoflight,landingsuccessfullythefirststageonadroneship.Theprocedure,stillexperimentalin2016,hasbecomealmostroutinein2017.10.5 TheEuropeanreactionEuropeanactorsintheiracknowledgementoftheimpendingthreattoArianewentthroughseveralphases,fromunawarenesstoscepticism,fromdisparagementtoirritationandfromirritationtoconcern.SpaceXhasprovenarobustandcompetentcompetitorovertheyears,andsurprisedindustrialaswellasinstitutionalactorsinvolvedinAriane.TheunawarenessofthemereexistenceofSpaceXattheverybeginningcanbeexplainedbythesheernumberofrocketstart-upsemergingregularlyintheUnitedStates,onlytodisappearshortlyaftertheirbirth.NewSpacewasindeedmostofthetimethestoryofwishfulthinkingandgranddelusion.XCOR,t/space,Rocketplane,Kistler,AndrewsSpace,PanAero,RotaryRocketCompany,BealAerospacewereallnamesbuzzingintheearly21stcentury,buthavebeenallbutforgotten.Ofthattime,onlyafewcompaniesfundedbymillionairesandbillionairesremain,ofwhichSpaceX,BlueOriginandVirginGalacticareprimeexamples.AmongthemanytalentsexistingintheUnitedStatesintheearly2000’s,itwasthereforedifficulttoestimatewhichapproachtofavourregardinginnovativewaystoaddressaerospaceissues:thewayofactorsfromtheSiliconValley,asSpaceXandBlueOrigin,throughsimplifyingproductionandfavouringrobustdesigns,orthemoreiterativeapproachtoinnovationadoptedbyactorsintheMojaveDesertsuchasArmadilloAerospaceorMastenSpaceSystems.Thelatterderivedfromaerospaceenthusiastswhofavourtestswithrealhardware,pushingtheenvelopeoftheirdesignsandachievinggreatstrideswithlittlefunding.Thegoalof



reducingthecostofaccesstospace,fuelledwiththepromisesofthenewspacetourismmarket(Futron,2002),ledin2004tothetriumphanttwosuborbitalflightsofthefirstprivately-fundedspaceplane,SpaceshipOne.BurtRutan,itsdesigner,wonthe$10millionAnsariXPrize,andleadtoamediafrenzyover“NewSpace”,conceivedasaphrasetodescribeprivateventuresaimedatprofitingfromthenewspacetourismmarket.Comparatively,SiliconValleyactorsflewundermostradars,notablyinthecaseofBlueOrigin:thecompanyalwaysmaintainedrelativesecrecyoveritsactivities,eventothisday.AlainDupasisaFrenchengineerwhorecognizedearlyonthepotentialofElonMuskandhiscompany.“Iwasratherimpressedbyhischaracter,Iwasnotsurprisedtoseehimsucceed”(Dupas,2016).However,hewasanexceptioninFrance,wherescepticismovernewspaceventuresisthenorm.DuringtenyearsspentaspresidentofArianespace,Jean-YvesLeGallfrequentlydismissedSpaceX’scapabilitytogetasizablemarketshareofthesatellitemarket.In2011,hesaid:“Ibelievethatbeforethesenewsystemsbecomerealcompetitors,they’llneedtoshowtheycanlaunchreliablyandregularly,andatcompetitiveprices.ThisiswhatArianespacedoestoday,anditwilltakemanyyearsforourcompetitorstoreachthispoint.It’simportanttorecallthatAriane5performeditsmaidenflightin1996,andenteredoperationalservicein2005.Ittakestimetohaveaprovensystemsuchasours,whichmakesmebelievethatArianespacewillcontinuetoleadthepackinlaunchservices.”(Arianespace,2011).Atthetime,ArianespacedespitebeingthenumberonelaunchserviceproviderintheworldwasnotabletogenerateaprofitandconsumedpublicresourcesthroughEGASatarateof€200millionperyear,laterreducedtoabout€100millionayear(Selding,2010).In2012Jean-YvesLeGallduringaninterviewsentanothermessagetoSpaceX:“Ourjobistough,wedoitseriously,thereisnoplaceforglamor.Howtrustworthycanyoubeofacompetitorwhoannounces80000peoplein15yearsonMars?We’redreaminghere!”(Cabirol,2012)EuropeandismissalofSpaceXwanedin2013,asJean-YvesLeGallcongratulatedSpaceXforitssuccesses,statingthatElonMuskhadmade“agoodinvestment”inSpaceX(Selding,2013),andstartedpressingforanAriane5successor.In2014,asdirectorofCNES,heexpressedconcernforAriane,ashebelievedthereistoomuch“linoleum”onArianeproductionandintegrationsector(Selding,2014).ThelinoleumreferstoproductionandintegrationfacilitiesofAriane5,morethantwodozenofwhichexistthroughoutEurope.Jean-YvesLeGallbelievednomorethanthreearerequiredtoperformthenecessaryworkforEurope’snextlaunchsystem.AlthoughthedecisiontoputnineMerlinenginesonFalcon9raisedeyebrowswhenitwasfirstannounced,thesuccessofthissimpleapproachearnedSpaceXacongratulationfromtheirEuropeancompetitorAirbus(Selding,2014).The2014ministerialcouncilofESAdecidedtofundandstarttheAriane6program,preferringtoabandontheplannedAriane5MEtodedicatetheresourcesofESAtoa“cost-driven”solution.TheplannedversionfavouredbyCNES,calledPPHforPowder-Powder-Hydrogen,wasultimatelyrejectedinfavouroftheindustryproposalandunderthepressureoftheGermandelegation,whichpreferredaliquidcorestage.ThePHHversion,forPowder-Hydrogen-Hydrogen,finallyprevailedafterlongnegotiations(Selding,2014).Ariane6wasadoptedinDecember2014,itsdevelopmentfundedthroughanESAprogram.TheEuropeanlauncherindustrywasthenrestructuredarounditstwomainpartners,Airbus



DefenseandSpaceandSafran,whichcreatedajoint-venturecalledAirbusSafranLaunchers.ThecompanybecametheprimecontractorforthedevelopmentofAriane6,responsibleforthedesign,production,integrationandmarketingofthelaunchsystem,aswellasforlaunchoperations,exactlyastheirnowmaincompetitorSpaceX.ThecompanynotablyboughtthemajorityofthesharesofArianespace,thecommercialentitysellingEuropeanlaunchers.TherestructuringwascompletedonJuly1st,2017,whenAirbusSafranLaunchersofficiallychangeditsnameforArianegroup.PlannedevolutionsinEuropeincluderesearchanddevelopmentonanewengine,Prometheus,whichwillusemethaneasafuelandshouldbeproducedusingadditivemanufacturingtechniques,andwillbereusable.ThecurrentplanalsoincludesworkwithJapanandGermanyonatestvehiclecalledCallisto,theequivalentofSpaceX’sgrasshoppertotestthetechnicalconceptsofreusability(CNES,2017a).

11 Whatisalaunchsystem?ThechallengeimposedtoArianebythecurrentcompetitionisawake-upcalltoupdateEurope’sspacelaunchpolicies.ThereisnounifiedvisiononbothsidesoftheAtlanticofthevalueofalaunchsystem,variousactorshavingastakeintheissue.11.1 Nation-statesandsupranationalentities11.1.1 UnitedStatesTheUnitedStatesseelaunchsystemsasanintegralpartoftheirextensivespacepolicy.Thereisnodebateovertheneedtohaveanationalcapabilityofaccesstospace,theonlyquestionistowhichextentandwhoshouldbeincharge.ThespacebudgetoftheUnitedStatesdwarfsthatofallothernationsintheworldcombined:NASAisthebiggestcivilspaceagencyintheworldwithabudgetaround$19billiondollarsperyear,buttheDepartmentofDefenseisthemostimportantspaceagencyintheworldwithanestimatedspacebudgetof$30billion.TheUnitedStateswasthesecondnationintheworldtoorbitasatellitein1958,afterthelaunchofSputnikbytheUSSRonOctober4th,1957.TheperiodoftheColdWarsawthedevelopmentofmanyspacelaunchers,usedasvectorsofnationalsecurityassets,strategicdeterrenceandpowerprojection.Indeed,thedevelopmentoflaunchsystemscoincideswiththeadventofnucleardeterrenceandtheriseofICBMsonbothsidesoftheironcurtain.Rockettechnologythusbecameanecessaryfeatureofadvancedwarfare,andsoonofanideologicalwarcalledthespacerace.ThezenithofAmericanpowerdemonstration,andlaunchertechnologywasreachedwiththefirststepsofamanontheMoonafterridingontopofthegiantSaturnVrocketin1969.Thispeakofspacetechnologyisafeatofhumaningenuity,engineeringandleadershipneverrepeatedaftertheApolloprogram.IndependentaccesstospaceisthereforeaninherentpartoftheUnitedStatesspacepolicy,consideredastrategicassetaswellasajobsprovider.Theofficialpolicyconsistsinmaintainingalaunchcapabilityinallsituation,nationalsecuritybeingincreasinglyreliantonspaceassets.Whenpossible,launchprovidersarecompetingagainsteachother,toput



pressureonlaunchprices,theinstitutionalmarketoftheUnitedStatesbeinggenerallyimportantenoughtosustainatleasttwoifnotmorelaunchproviders.Whenthesituationcallsit,atemporarymonopolycanbecreated:thishappenedwhenLockheedMartinandBoeingmergedinUnitedLaunchAlliancein2006.Thepreferredmodeofoperations,nonetheless,remainsthatofasemi-competitivemarketonwhichthegovernmentcanchooseoneortheotherproviderbasedonitsownrequirements:itisnotforcedtoopeneverylaunchtocompetition(Swarts,2017).11.1.2 FranceFranceseesaccesstospaceasastrategicassetand,giventhesuccessofAriane,asasourceofprestigeandpride.ArianeisaheritageofaforeignpolicyofindependencefrombothAmericaandtheUSSR.BudgetaryreasonspushedfortheintegrationofthelauncherprogramintoaEuropeanframework:firstwithELDOandtheEuropaprogram,thenintoESAunderFrenchmanagement.TheinitialsuccessesofArianeasacommerciallaunchsystemhassprungupanentireindustryoflaunchvehiclemanufacturers,satellitemanufacturersandsatelliteoperators.TheentirevaluechainofspaceactivitiesispresentwithinFrance’sborders,amongwhichCNES,aspaceagencyresponsibleforresearchanddevelopment.Arianegroup,composedofAirbus,SafranandArianespace,isthefirstlaunchserviceoperatorintheworld.AirbusDefenceandSpaceandThalesAleniaSpacearebothsatellitemanufacturerswhichbothstartedinFranceandhavetheirmostimportantfacilitiesonFrenchterritory.EutelsatinParisisthethirdsatelliteoperatorintheworld.IndependentaccesstospaceisacomplicatednotioninEurope,especiallyin2017withtheadventofaggressiveforeigncompetition.Franceisattachedtoitsautonomousaccesstospace,butthisnotionwasregularlyputintoquestionatthestartoftheArianeprogram,andstillistoday.Forinstance,EuropeaninstitutionalsatellitesproducedinFranceandevensomeusedinthemilitarywerenotlaunchedonAriane,butpreferablyonSoyuz,producedinRussiabutmoreadaptedtopayloadrequirementsofinstitutionalsatellites(Amos,2011).ThesurprisingsuccessofArianeinthe1980sand1990sprovidedFrancewiththemostefficientcommerciallauncherintheworld,butthedominationofFranceoveralmosteveryaspectoftheArianeprogramcreatedtensionswithitsEuropeanpartners,especiallywithGermanyandItaly(Krige,2014).ItisimportanttonotethatArianeisverytiedtoFrenchprestigeandpride.Thisaspectoflaunchpolicyisimportanttoconsiderwhenstudyingtherationaleforalaunchprogram,consideringthethreatsitfacesandthesupportitmayreceive.AssummarizedbyJohnLogsdon:“Launchersaremorethaneconomics”(Logsdon,2017).ThecommercialdifficultiesofAriane5sinceitscreation,theEGASprogramandlong-standingcountry-widebudgetaryconstraintshaveneverthelessputFranceinadifficultpositionwithregardstoitsEuropeanpartners.11.1.3 Germany



Germany’spositionregardingEuropeanlaunchservicesisoneofthemostdifficulttoassess,particularlybecauseithasevolvedoverthelastfewyears.GermanyfromtheonsethasbeenapartnerinEuropeanspaceprogramswithELDOandESRO,andhasalwaysbeeninvolvedwiththeindustrialbaseofAriane,particularlywithitsLampoldhausenfacilityusedtotestliquid-propellantengines.Nevertheless,therationaleforautonomousaccesstospacehasneverhadasmuchtractioninGermanyasinFrance.Germanyhasalwaysbeenmoreinterestedinhumanspaceflightthaninlaunchautonomy,andtheparticipationofGermanytothebudgetofArianedevelopmentshavebeenstruckasatacitdealwithFrance:eachArianedevelopmenthasbeenlinkedtoahumanspaceflightdevelopmentwithinESA:Ariane1to4tiedtoSpacelab,Ariane5toColumbus(Penent,2014).SeveralperiodsoftensionhaveoccurredbetweenFranceandGermanyregardinglaunchsystems.GermandelegatesweresometimesputoffbyFrenchcleardominanceofthelaunchsector.Intermsofprogrammanagementresponsibilities,mostofArianedevelopmentanddesignsarebeingmanagedbyCNESwithatotaldelegationofresponsibilitiesfromESA.Thelackofoversightandcompetencesharinghascreatedtensionsinthepast.Theimbalanceinthenumberofjobsrelatedtolaunchservicesisalsoavisiblepointofcontention,especiallysincethecreationofEGASandincreaseinGermany’sshareofESA’sbudget(Krige,2014).Germanyseeslaunchsystemsasacommodity:theybuythoseperceivedashavingthebestvalueonthemarketwithoutconsiderationtotheirorigin.Thisalsomeanstheygenerallydonotperceivelaunchvehiclesasastrategicasset,asrevealedbytheirchoiceoflaunchsystemfortheirmilitarysatellites:theylaunchedtheircommunicationsystemusingAriane5,butlaunchedtheirradarsatellitesonaKosmos3MRussianlauncher,andthenext-generationwilllaunchonaSpaceXFalcon9.11.1.4 ItalyItalyfocusesonsmalllaunchsystems:theyfirstlaunchedAmericanScoutrocketsfromafloatingplatformoutofSanMarco(Maria,2003).TogetherwithFrance,ItalystarteddevelopingasmalllaunchsystemcalledVega(VettoreEuropeodiGenerazioneAvanzata).DevelopedwithAgenziaSpazialediItalia,theItalianspaceagency,incooperationwithCNES,itisnowanESAprogram.VegaismanufacturedbyELV,ajoint-venturebetweenAvioandtheItalianSpaceAgency,andoperatedbyArianegroupfromFrenchGuiana.ItisasourceofprestigeforItaly,butthebirthoftheprogramwascomplicatedasitraisedimmensetensionsamongESApartners.Indeed,ItalythreatenedtoquitESAifitdidnotprovidesupporttoVega(Krige,2014),therisingcostsoftheprogrammeaningthatItalydidnothavetheresourcestopursueitalone.TheprogramwasespeciallyshamedbyFrance,whosawitasafollyatatimewhenRussianlauncherswerebecomingavailableonthemarket(SpaceNews,2004a).AnexceptionalblowtotheprogramcamewhenFrancerefusedtotransferaflightmanagementsoftwaretoItaly,whichforcedItalytodeveloetheirown.Tothisdate,Vegahasa100%successtrackrecord,ararefeatintheunforgivingworldoflaunchsystems.



11.1.5 EuropeanUnionAccordingtoarticle189ofthe2007TreatyontheFunctioningoftheEuropeanUnion,theEuropeanUnionnowhastherighttodrawaunifiedspaceprogram,inrelationwiththeEuropeanSpaceAgency.Thepolicywasstatedin2007,referringtolaunchsystemsas“thevitalimportanceforEuropetomaintainanindependent,reliableandcosteffectiveaccesstospaceataffordableconditions”(IBP,2009).ThewordsoftheEuropeanUnionpositionshowtheambivalenceofitsposition:itshoulduseitsassets,butonlyiftheyarebetterthanthecompetition.TheEUalsoshowsitisawareoftheneedtolaunchalottolowercostsforagivenlaunchsystem,buttheimplementedpolicyisgenerallythatofopencompetitionandfreemarkets.TheEUhasnoofficialpolicyofEuropeanpreferenceforlaunch,butinfactmostsatellitesfrombothEUprograms,GalileoandCopernicus,havebeenlaunchedonEuropeanSoyuz,Ariane5,andVega.TheEUalsousedRockot,arepurposedsovietICBMlaunchedfromPlesetskbutoperatedbyEurockot,asubsidiaryofArianegroup.11.2 Spaceagencies11.2.1 NASANASAhasoperatedlaunchvehiclesinthepast,suchastheSaturnseriesthatledtothesuccessfulcompletionoftheApolloprogram,ortheSpaceShuttleuntil2011.NASAwilllikelyoperateonemore,theSpaceLaunchSystem,startingin2018.In2006,NASAcreatedtheCOTSprogramthatledtotheemergenceofSpaceXontheinternationallaunchmarket.SpaceX’sambitionsaswellasBlueOrigin’shaverisensince,andmediaaswellassomekeyactorsstarttofeelthepressureoftheentrepreneurialspiritthatinfluencesspacedevelopments.ElonMuskhimselfisadamantabouthowbigafanofNASAheis,andhowmuchNASAhashelpedhim.However,severalspaceadvocatespraisehisleadershipandthecapacityofprivateactorstoaccomplishgreatstridesinspace,inoppositiontotheperceivedinefficiencyofpublicagencies.Thisleadstotensionsandconfusionsregardingtheroleofaspaceagencyinoppositiontoacompany(Skran,2015).PrivateinitiativeinspacecomesfromthevisiontheUnitedStateshaveofthemselvesandtheirfuture.“ItispartofthisAmericantraditionofmanifestdestiny,ofpushingthefrontier.AlotofspaceenthusiastsweredisappointedaftertheendoftheApolloprogram,andbelievedNASAhadbetrayedthem.ButNASAwassimplyaccomplishingthegoalstatedbythegovernment,andwewenttotheMoontobeattheSovietUnion.”(Pace,2017)ThecurrentwaveofNewSpace(Spacefrontier,2017),anotionthatsuffersfromalackofaccuracy,couldthereforebeduetofourfactors.First,awaveofprivatefundingcomesfrombillionairesreadytoinvestinspaceactivitiesforvariousreasons,fromdevelopingnewmarkets(VirginGalacticwithspacetourism)toaimingatmakingapersonalimpactontheworldtoberememberedbyfuturegenerations(ElonMuskwithSpaceX).Second,theorganizationandgrowinginfluenceofspaceenthusiastsocieties,suchasthePlanetary



SocietyortheMarssocietyongovernmentinstitutions,hasbeenaninfluenceinfavourofthismovement.Thethirdfactorseemstobethelackofcleardirectiongiventothepost-spaceshuttleperiodatNASA,sincetheConstellationprogramdecidedbyGeorgesW.Bushwascancelledafterfiveyearsofdevelopment,andthatthenewexplorationprogram,theAsteroidRedirectMission,generatedverylittleenthusiasmatNASAandinCongress(Foust,2017c).TheSpaceLaunchSystem,arepurposedAresV,supposedtocarryoutthismissionwasregularlyportrayedas“therockettonowhere”(Wenz,2016)ortheSLSacronymrepurposedasthe“SenateLaunchSystem”(Tumlinson,2011).PoliticaldivergenceregardinghumanspaceexplorationgoalshaveledtheSpaceXapproachofexplorationandthecompany’sstatedgoal,amissiontoMarsandultimatelyitssettlement,appearparadoxicallyasaclearer,morecontinuousandstablegoalthanNASA’sobjectivesdefinedbypoliticalauthorities.ThefourthfactorismoreadministrativeandlinkedtothecurrentstateoftheFederalAcquisitionRegulationoftheUnitedStates,orFAR.Thisofficialprocurementmechanismforfederalagencies,amongwhichNASAandtheAirForce,hasbeencriticizedforyearsforitslackofefficiency,itsassociatedcostsandcomplexityresultinginthediscouragementofneweconomicplayerssuchasstart-upstocompeteforgovernmentcontracts(Davenport,2016).OnewayfoundbyNASAtoavoidthecomplexadministrativeenvironmentinwhichmostofitsprocurementevolves,wastodeveloptheCOTSprogramonthegroundsofanewtypeofcontract:FundedSpaceActAgreements,whichhadneverbeenfundedatahighlevel.TheprogramwasextremelysuccessfulincreatingacapabilityNASAneeded:cargodeliverytotheInternationalSpaceStation.Thecollateralandintendedeffectoftheprogramwastheavailabilityonthelaunchmarketoftwonewlaunchvehicles:Antares,developedbyOrbitalSciences,whichencounteredtechnicalproblemsandwasnevermarketedtocommercialcustomers,andFalcon9fromSpaceXwhichisAriane’smostchallengingcurrentcompetitor.NASAthereforeconsiderslaunchsystemsforemostasanecessarycapability.Usinglaunchsystemsthataremarketedtoothercustomersandwhosepriceisthereforereducedisgoodtohave,butitisnotastatedgoal.ThisisdifferentfromESA’sapproachtolaunchsystems:ESAthinksofitasacompetitivespaceprogram,tobecomparedtothecooperativescienceorhumanspaceflightprogramsitleadswithNASAandotherspaceagenciesaroundtheworld.ThereiscomparativelylittledoneincooperationwiththeUSAonlaunchsystems,whichisastatementoftheirhighstrategicvalue.11.2.2 ESAThefirstprincipleofESAiscalledGeo-return:“OneofthemainorientationsgoverningtheESAindustrialpolicyisthegeo-returnprinciplewhichenablestheExecutivetoconductandimplementaneffectiveEuropeanSpaceprogramme.ThispolicyisbasedonallESAMemberStatesparticipating–havingdueregardtotheirfinancialcontribution-inanequitablemannertothesuccessfulcreationofastrongandcompetitiveEuropeanindustrialbaseforspaceactivities”(ESA,2016).SinceESAisaninter-governmentalinstitution,allcontributingstateshavetoagreetosharetheworkdoneonprogramstheychoosetofund.Launchsystemsisnoexception,sincemanyEuropeancountriescontributedtotheprogram:France,GermanyandItalyarethebiggestcontributortolaunchdevelopmentandproduction.Other



countriesarealsoparticipatingatlowerbudgetarylevels,suchasSwitzerland,Spain,Norway,AustriaandtheNetherlands.Launchsystemsrepresent18,9%ofESA’sbudget.ThepolicyofGeo-returnhasbeenidentified,dependingonitsmanagement,asoneofEurope’sstrengthsorweaknessesintermsofindustrialorganization,butisalsopartofESA’sofficialobjectivestatedinarticleVIIparagraphoftheoriginalcharter:to“ensurethatallMemberStatesparticipateinanequitablemanner,havingregardtotheirfinancialcontribution,inimplementingtheEuropeanspaceprogrammeandintheassociateddevelopmentofspacetechnology;inparticulartheAgencyshall,fortheexecutionofitsprogrammes,grantpreferencetothefullestextentpossibletoindustryinallMemberStates,whichshallbegiventhemaximumopportunitytoparticipateintheworkoftechnologicalinterestundertakenfortheAgency”(ESA,1975).Astrongindustrialbaseisinplacenow,anditispossiblesomesegmentsofthisindustrywouldremaincompetitivewithoutAriane.11.2.3 CNESTheFrenchspaceagencyisthehistoricprogrammanagerforAriane.EngineersemployedatCNESarethedesignersofallArianelauncherssinceitsfirstversion,andarestillveryinfluentialasadesignauthoritytoday.Arianespacewasaspin-offofCNES,whichretainedownershipofthecompanyuntil2015,aftertheDecember2014ministerialmeetingofESAdecidedtofundthenewAriane6program.In2014,theindustrialorganizationofthesectorchanged,industrybecomingthedesignanddevelopmentauthorityoverCNES.EngineersatCNESstillretainmostofEurope’sknowledgeonthetechnologicalknow-howandtheyhavefrequentcontactswithArianegroup.CNEShasextensivetechnologicaltieswithanotherpublicaerospacedevelopmentprogram:thePrometheusengineitoriginallydevelopedin-house,andisnowanESAprogram.ForCNES,launchsystemsarethecoreoftheircompetency.TheyarethesourceofmostdevelopmentinlaunchsystemsinEurope,withthenotableandcontroversialexceptionofVega.CNESisveryinfluentialinshapingtheEuropeanpolicyrelatedtolaunchers.Therefore,theirstrategyprovidesaninsightonthereasonswhyEuropeanlaunchersdevelopedthewaytheydid.TheprimarystrategyofCNESistocreateanefficientcommercialcapabilityinlaunchsystems,withtheaimofenablingasuccessfulandself-sufficientlauncherindustryinEurope.ThesaleofCNESsharesofArianespace,despitebeingaconsequenceofthepressureputonArianebySpaceX,wasatransactionplannedforalongtime.ItcorrespondedtoCNES’sobjectiveofprogressivelyprovidingEuropeanlauncherwithcommercialautonomy,includingforinvestmentinnewtechnologythatwouldguaranteetheircontinuedsuccess.

12 Launchsystemsmarkets



12.1 MarketscriteriaMarketsegmentsforlaunchvehiclescanbedefinedaccordingtocriteriawhichareknownandimposeacertainsetofrequirementspriortoagreeingtolaunch.Thosecriteriavarywitheachmarketsegment,butaredefinedbytheneedsoftheclient.Toassessthevalueofthosecriteria,wecanlookattheprioritiessetbythecommercialcustomerEutelsat.Askedtoassessthecriteriaandprioritiesforthechoiceofalaunchsystem,thesearethegradesgiventosixofthemostcommonservicesofferedbyalaunchserviceprovider(AlibertiandTugnoli,2016):-TechnicalServices(compatibilitywithspacecraft,fairing,volume,shock,etc.):3-Launchontime:3-Reliability:3-Valueformoney:3Othercriteriainclude:-Operationalsimplicity(durationofmissionintegrationandlaunchcampaign):2,5-Environmentalfootprint:2-Flexibility(capacityfororbit-raisingstrategiesminimizingduration):2

Figure1.Criteriaforlaunchcustomers(AlibertiandTugnoli,2016)



Whatthechartmeansisthatvalueformoney,reliability,launchontimeandtechnicalservicesareratedwiththesamegradebysatelliteoperators.Nevertheless,historytellsusthatsatelliteoperatorscanchoosetoswitchprovidertolaunchontimeevenwhenthismeanspayingapremium(Young,2016).Somedidalsochoosenottolaunchonaproviderthathasabadtrackrecord,evenifitmeanslaunchinglater.Anothercriteriontoaddtothelist,asshownabove,isthecountryofproductionofthelaunchsystemandthelaunchingstate,sincemostcountriesconsiderlaunchsystemstobeastrategiccapabilityandapplyastrictruleofnationalpreferencewhenchoosingalauncher.Approachingtheissuebysegmentingthedemandintomarketsgrosslyoversimplifiestheissue,sincecriteriatoselectalaunchoperatordifferfrompayloadtopayload.Academicworkpreviouslydoneontheeconomicperspectiveoflaunchvehiclesassertsthisadamantly(Hertzfeld,WilliamsonandPeter,2005).However,articulatingtheanalysisfromthedemandrequirementsallowsforabroadcharacterisationofthecriteriachosenbycustomerstoselectalaunchvehicle,andlaunchvehicleoperatorstomaketechnicaltrade-offsduringdevelopment.12.2 Marketsegments12.2.1 SmallsatsandCubesatsAtthebottomofthemarket,theleastprofitableandleastdemandingfromatechnicalpointofviewistheverysmallsatellitemarketsegment.OneofthemainfeaturesofthismarketisagrowingCubesatsegment.Usuallybuiltinseriesorcheaplycomparedtoinstitutionalorbigcommercialsatellites,theyofferlimitedcapacitybutanincomparablepriceadvantage.Thesesatelliteoperatorsgenerallyseekthemostaffordablelaunchoption,althoughitdoesnotnecessarilycomplywiththeirrequirementsintermsoforbitinsertion,launchdateorlauncherreliability.Theirlowweightmeansthatperformanceisnotakeyissue.Thenationalityofthelauncherisnotahindranceeither.12.2.2 SpacestationresupplymissionsUpmarketistheverynewcommercialresupplymarketoftheInternationalSpaceStation.ThismarketiswhereSpaceXthrivedsinceitsfirstlaunchofaFalcon9rocketin2010.Itisamarketcreatedex-nihilobyNASA,whichwasnotalwaysopentocompetition:priorto2011,theSpaceShuttlewasresponsibleformostoftheISSresupplymissions,incooperationwithRussia,EuropeandJapan.Therequirementsofthismarketarestringentfromatechnicalpointofview,sincecompaniesofferingtocompetemusthavealauncheravailableanddevelopacargospacecraft,withthehelpofNASA.Themainrequirements,though,areavailabilityandcost:launchvehiclesmustbeavailabletoregularlylaunchsuppliestotheISS,andmustberelativelyinexpensivetooperate.TheCOTSprogramwhichgavebirthtothiscapabilityhasbeenregularlyhailedasanefficientuseofpublicfunds.Reliabilityandperformancearenotkeydriversforthismarket,sincepayloadsweightlessthan10tonstolow-earthorbit,aperformancewhichputsthelaunchvehicleinthecategoryofmediumlaunchvehicles.Additionally,theresourcescarriedcanbeexpensiveinthecaseofexperimentsorspacesuits,butthisisincomparablewiththecostofheavysatellites.Furthermore,themostimportantpayloadisfoodandotherinexpensiveitems:mostofthe



costcomesfromthecargospacecraftitself.Reliabilityisthereforeimportant,asanyrocketlaunch,butnotasprimordialasahigher-endsatellite.Thenationalityofthelauncherisanimportantdriver,launchersmustbeatleast51%builtintheUSA.ItappearsEuropesubmittedanentrytotheCOTScompetition,forwhichthealreadydevelopedATVvehiclewouldlaunchonaULADeltaIV,butwasnotselectedforundisclosedreasons(FlightGlobal,2005).Cost,availabilityandthenationalityofthevehicleappearaslikelyrequirementsnotachievedbyEuropeanproposal,sincetheATVincombinationwithanyULArocketcouldachievegreatperformancewithbetter-than-averagereliability.12.2.3 SmallcommercialsatellitesUpmarketarecommercialsatelliteswhicharesmallerthantheirheavycounterparts,costlesstomanufactureandarelesspowerful.Theyareoftenbuiltandoperatedbythesamecompanies,buteitherarelesscrucialtothesurvivalofthecompaniesoperatingthem,orbelongtocompanieswillingtotakesomeriskstoflytheirsatellitesontimeandatareasonablecost.Forinstance,SES-8wasasatellitedesignedtosupporttheoperationsofanalreadyexistingsatellite,andwaslaunchedonthefirstcommercialversionofFalcon9.ThefollowingpayloadlaunchedbySpaceXwastheThaicom6satellite.Thecombinedpriceofthesatelliteandthelaunchwasvaluedat$160million,whichisarelativelylowfigureforasatelliteoperator,incitingsomerisk-taking.However,thesesatellitesaresensitivetoschedule,especiallywhenoperatedbysmallsatellitecompanieswhosebusinessplanisimpactedbydelays.Thesesatellitesfitinthelower-positionofatypicalAriane5launch.12.2.4 EuropeaninstitutionalsatellitesUpmarketareEurope’sinstitutionalsatellites.Thismarketsegmentisveryvariabledependingontheclient:ESAdoesnotfunctionthesamewayastheEuropeanUnion,whoseprocurementrulesinreturndonotapplytoFrench,British,GermanorItaliandefencedepartments.OnethingtheyhaveincommonisthattheyrefusetopayapremiumtoArianespaceonthesolebasisthatitisaEuropeanprovider,whenmostothernationsdonothesitatetofavourtheirnationalindustrybypayingahigherpriceforadomesticlauncher.Thenationalityofthelauncherisadefiningcriterion,butalsoamovingnotionasshownbySoyuzinFrenchGuiana.SoyuzisindeedbuiltinRussiaandoperatedbyArianespacefromKourou,andofficiallytreatedasaEuropeanlauncher.Thenationalitycriterionisthereforedifficulttoassess,apredictablesituationinanenvironmentwheretheinterestsofmanyactorsareatstake,andsometimesconflicting.ThehistoryofEuropeanlaunchershasbeenmarkedwiththe“Bad-Godesbergagreement”,arulestatingthatMemberstatesandESAshouldselectArianefortheirlaunchesattheconditionthatit“doesnotpresentanunreasonabledisadvantage,inrespectofcost,reliabilityandmissionsuitability”(Suzuki,2017).Thesameprincipleappliestodaybutislimitedinscopeandapplication.SelectingEuropeanlaunchersforinstitutionallaunchesislargelyduetothebenevolenceofthecustomerandtheperformanceofArianecomparedtothecompetition.Theperformanceofthelauncherisgenerallynotasimportantforinstitutionalsatellitesasforcommercialsatellites.Indeed,mostmissionsarelaunchedtolowerorbits,orthesatellitesthemselvesweightlessthanheavycommunicationsatellites.Forinstance,theEU



SentinelseriesorGalileoseriesarerespectivelyLEOandMEOsatellites,andhavebeenlaunchedonVega,RockotandEuropeanSoyuz.Frenchmilitarycommunicationsatellitesusuallyoccupythelower-slotofanArianerocket,beinglighterthancurrentcommercialsatellites.FewinstitutionalpayloadsrequiretheperformanceofanentireAriane5rocket:notableexampleswerethefiveATVresupplymissionstotheInternationalSpaceStationandlargescientificprobessuchasXMMNewton,RosettaortheplannedJamesWebbSpaceTelescopeincooperationwithNASA.Thereliabilitycriteriondependsontheimportanceofthepayload:somepayloadsaccepthigherrisksthanothers,suchastheSentinelsatelliteslaunchedonvehicleswithasmalltrackrecord,Vega,orwithmediocretrackrecord,Rockot.Ontheotherhand,reliabilityiscrucialtolaunchverycostlyscientificpayloadssuchastheJamesWebbSpaceTelescope.Institutionalpayloadsnonethelessrequireavailabilityfromthelauncher:somescientificpayloadshaveverynarrowlaunchwindows,especiallyforinterplanetarymissions.Thecostconstraintisalsorelativelyimportantforsmallinstitutionalpayloads.12.2.5 SmallinstitutionalAmericanpayloadsUpmarketisthesegmentofsmallNASA,DODandNROpayloads.ThismarketsegmenthasalotincommonwiththeEuropeaninstitutionalmarket,butremainsoutsideofAriane’sreachsinceArianeisnotanAmericanlauncher.TheUSAapplyastrictruleofnationalpreferencefortheirinstitutionallaunches,andlaunchersmustbeatleast51%builtintheUnitedStatestohaveachancetocompeteforinstitutionallaunches.Apartfromthisrequirement,whicheffectivelypreventsArianetocompete,technicalrequirementsarerelativelylowandthismarketsegmentisslowlyevolvingtowardsacost-drivenapproach.SpaceXisalreadypresentinthismarket,whichwaspreviouslysharedbetweenOrbitalATKforsmallandverysmalllaunchersandUnitedLaunchAllianceforEELV-classlaunchers.12.2.6 BigcommercialGEOmarketThebigGEOcommercialmarkethasgatheredalotofattentionwiththearrivalofSpaceX.ThismarketiswheretheArianefamilyestablisheditsleadership,nowthreatenedbythisnewcompetition.TherationaleforbuildingArianewasEuropeanautonomy,butthesurprisingcommercialsuccessledArianespaceandCNEStofocustheirdevelopmentsonprovidingtheirmaincustomerswithperformanceandreliability.Bigcommercialsatellitesgenerallyrepresentthebasisofasatelliteoperator’srevenue,andafailurewouldresultinimportantfinanciallosses.Thus,availabilityandcostusedtobesecond-tiercriteriawhenassessingthesuitabilityofalaunchprovider,andcustomerswerereadytopayapremiumforthereliabilityofthevehicle.Aspreviouslyestablished,thecommercialmarketistheonlysegmentopentocompetition,launchprovidersfromtheUnitedStates,Russia,Europe,IndiaorJapanbeingallowedtofreelycompetetowinlaunchcontracts.Therefore,thenationalityofalaunchproviderisonlyamarginalcriterionwhenselectingalaunchprovider.However,thisconsiderationisnotabsolute,sinceexportcontrolshaveaninfluenceovernationsallowedtocompete:



ChinacannotlaunchwesternsatellitesduetoITARrestrictions,andRussiacouldfacethesamesituationifinternationaltensionswiththeUnitedStatesincreasepassedacertainthreshold(Pace,2015).Severalevolutionsarenonethelessoccurringtoday,andcontributetore-shapetheprioritiesofcommercialoperators.Thefirstoneismodifiedperceptionofrisk,whichisadirectconsequenceofthereliabilityofAriane5.Launchinsuranceratesarecurrentlylowsincethemarkethasalargeamountofcapitalavailable,becauseofthereliabilityoflaunchsystems.Alaunchfailurewouldlikelychangethisbalance,buttoday’slaunchsystemsreliabilityallowssatelliteoperatorstotakemorerisks,sinceinsurancepremiumsdonotconstituteasubstantialpercentageofthelaunchcost.Asaresult,theytendtofavourcheaperlaunchproviderssuchasSpaceX.ThesecondevolutionisthatIncumbentoperators,suchasSES,Eutelsat,Intelsat,seektoreducetheircapitalexpenditure(CAPEX)becauseofachangeintheirbusinessmodel.Indeed,thetelecommunicationmarketisevolvingtowardsalowerratioofdollargeneratedbybitofdataprovided,andthecurrentDirect-To-Home(DTH)modeloftelevisionbroadcast,althoughstillverysuccessfulandgeneratingalotofrevenue,isstartingtobecomedatedandcouldbechallengedinthenextfewdecadesbyemergingmarketssuchasmobileconnectivity,InternetofThings(IoT)orMachinetoMachine(M2M).Theactualsizeofthesemarketsremainstobedetermined,andalthoughtheyprovidehighgrowthratestoday,theirfutureevolutionisunknown.Thesatelliteindustryingeneralcouldneedanimportantgrowthleverageinthefuture,whichexplainsinitiativesbytheUSAandLuxembourgtopromotesatelliteservicingprojects(NASA,2017b)orevenmoreexoticactivitiessuchasspacemining(Foust,2017b).ThefirstgenerationofHighThroughputSatellites(HTS)hasbeenlaunched,andsatelliteoperatorsseemtohaveadoptedawait-and-seepolicywhilereducingthebudgetoftheirmostimportantexpenditures:thesatellitesthemselvesandtheirlaunchvehicles.Regardingsatellites,aninnovationisstartingtotransformthemarket:electricpropulsionisbecomingubiquitous.Thisreducestheweightofthesatellite,aswellasmakingthemmoreprofitableorlesscostlydependingontheusemadeofthereducedweight.Performanceisthereforelessofanissuetoday,albeitAriane5remainsonetheonlycommerciallauncherscapableoflaunchingtheheaviestsatellites.SpaceXisnonethelessplanningtostartoperatingamorepowerfulrocket,FalconHeavy,inNovember.Availabilityandflexibility,ontheotherhand,isbecomingacrucialcriterion,sinceelectricsatellitestakelongertoreachtheirintendedorbitalslot,electricpropulsionbeingefficientbutincapableofhighthrust.12.2.7 BigAmericaninstitutionalsatellitesThelast,mostprofitableandmostdemandingmarketsegmentisthemarketforbigAmericaninstitutionalmissions,whichcompriseNASA’sscientificmissionsandthemilitarysatellitesoftheDepartmentofDefense,especiallythosefromtheNationalReconnaissanceOffice.Somehowincludedinthismarketsegmentisalsotheveryspecificcategoryofhumanspaceflight.



Forthismarketsegment,performanceisimportant,sometimesveryimportantsinceonlybigNASAmissionsandNROmissionsrequirethemostpowerfulrocketintheworld,theDeltaIVheavy.However,thekeymetricforthesemissionsisreliability.Indeed,thesatellitescarriedinorbitcostalotmorethanothermissions.ThisisthecaseforclassANASApayloadsforinstance(NASA,2004).TheHubbleSpaceTelescopeortheJamesWebbSpaceTelescopearetypicalexamplesofsuchpayloadswhichrequireyearstodevelopandareextremelyexpensive.ThesameappliestotheDepartmentofDefenceandtheNationalReconnaissanceOffice,sometimeswithahigheremphasisonreliabilitysincesomepayloadsarecriticaltothenationalsecurityoftheUnitedStates.Indeed,theUnitedStatesisthecountrymostreliantonspaceassetsforitsmilitarycapability.Launchingsuchassetscomeswithenormousoversight,whichisverycostly.Launchcompaniesmustdemonstrateextremerigortothegovernmentbeforebeingallowedtolaunchthesepayloads,whichcomeswithheavyinternalaccountingmeasuresandqualityassurance,andextensiveexternalauditing:TheAerospaceCorporation,forinstance,specializesinengineeringoversighttoguaranteethequalityoflaunchsystemsandmissionsafetytoavoidfailures.Sincereliabilityissuchanimportantmetric,launchcostsaremoreimportant.Availabilityisalsoanimportantfactorinthechoiceoflaunchsystemsforsuchpayloads.Thesoleproviderofthistypeofcontracts,UnitedLaunchAlliance,receives$800millionayearfromtheUnitedStatesgovernmenttomaintainthecapabilitytolaunchonshortnotice(Gruss,2016b).Forsuchcontracts,priceistheleastimportantselectioncriterion,andallofthemhavebeenconductedbyUnitedLaunchAlliancesince2006.OneimportantexceptionistheJamesWebbSpaceTelescope,whoselaunchonanAriane5rocketin2018representsESA‘scontributiononthisprogram.ThismarketsegmentiscurrentlynotavailableforSpaceX,althoughthetrendtopushcostsdowncouldinthefuturecouldopenthissegmenttocompetition.12.2.8 ThespecificcaseofHumanSpaceflightThelastsegmentishumanspaceflight,whichbearsalotofcommonalitieswiththepreviousone,butalsofeaturespeculiaritiesthatmakeitunique.First,theperformanceandreliabilityofthelaunchsystemmustbeperfectlysuitedforsuchanactivity.Theyarenottheonlydriverssincetheentiresystem,includingthecapsuleorspaceplaneinwhichastronautsareenclosed,representpotentialpointsoffailure.Theperceptionofriskhighlydependsontheagencyresponsibleforthedevelopmentofsuchacapability:forinstance,NASAwasextremelycautiousduringthedevelopmentoftheApolloprogram,butgavereassuringriskfiguresatthebeginningoftheSpaceShuttleprogram(Flatow,2011).TheychangedthisassessmentaftertheChallengeraccident,buttheColumbiaaccidentrevealednewtroublingindicatorsofarenewedappetiteforriskatNASA.TheseirregularitiesintheriskmanagementprocesswerefamouslytheorizedbyDianeVaughanasa“NormalizationofDeviance”(Wilcutt,2014).Similarly,theSovietUnionhadagreatappetiteforriskduringthespacerace,asYuriGagarinlaunchedatopavehiclethatperformednominallyonly70%of



thetime,andthefirstSoyuzflightsendedwiththedeathofVladimirKomarov,afterastringoftechnicalfailures.Today,SpaceXchampionsthevisionofspaceflightasariskyhumanendeavour.ElonMuskoftenassertedMartiancolonistsshouldbe“preparedtodie”(Wall,2016).HealsodeclaredhewouldliketodieonMarshimself,althoughspecifying“notonimpact”(Terdiman,2013).ThecurrentNASAriskassessmentfortheCommercialCrewProgramratestheprobabilityforLossofCrewat1in270flights,afigurewhosesignificancewasdismissedbyprogrammanagerBillGerstenmeier(Foust,2017).Forthelaunchofastronauts,thepriceofthelaunchvehiclegenerallyplaysaminorroleintheselection,themainobjectivebeingthesafetyoftheastronautson-boardtheirvehicles.Thetablebelowsummarizestherequirementsofvariouspayloadcategories.

Cost

Availability (Launch on time, orbit raising)

Reliability (launch rate, accounting measurement)

Function (Payload mass/ Fairing size) Nationality Addressed by:

Big NASA/DOD - Human Spaceflight Minimal Heavy Crucial Crucial Crucial

United Launch Alliance, Roskosmos for human spaceflight

Big commercial GEO Heavy Medium Heavy Heavy Minimal

Arianegroup, SpaceX, Roskosmos

Small NASA/DOD Medium Heavy Heavy Medium Crucial

SpaceX, Orbital ATK

Institutional EU Medium Heavy Medium Medium Medium

Arianespace, Roskosmos, SpaceX

Small commercial GEO Heavy Heavy Medium Medium Minimal

SpaceX, Arianespace, Roskosmos

ISS resupply Heavy Heavy Minimal Medium Heavy

SpaceX, Orbital ATK, Mitsubishi Heavy Industries, Roskosmos

Cubesat Crucial Minimal Minimal Minimal Minimal Piggyback rides Figure2.Marketcriteriaforlaunchsystemselection

13 Disruptiveinnovationsinlaunchsystems13.1 Whydisruptiveinnovation?Thereasonsforchoosingtoanalysetherecentevolutionsinthelaunchsectorwithintheframeworkofdisruptiveinnovationaremany.Thisframeworkofanalysishelpsexplaining



mostifnotalltheeventsofthepastfewyears,includingtheprogressesofSpaceXasacommerciallaunchprovider,theirneglectofFalcon1afterthedevelopmentofFalcon9andtheirpursuitofreusability.Italsoexplainsthe“intelligencefailure”thatledEuropeanactorstoreacttoSpaceXwithadelay,andforcedthemtohastilydevelopAriane6.ThisframeworkwasalsochosenbecauseNASAusedthetheoryofdisruptiveinnovationtodesigntheCOTSprogramwhichservedasaspringboardforSpaceXtoconquermoredemandingmarkets.In1997,ClayChristensenpublishedTheInnovator’sDilemma,withthesubtitle“WhenNewTechnologiesCauseGreatFirmstoFail”(Christensen,1997).ThisprofessoratHarvardBusinessSchoolexplainsinthebooktheprocessthroughwhichtheemergenceofnewcompaniescansupplantestablishedcompanies,eventhoseconsideredextremelysolidbyfinancialanalysists.“I’vereadthebook,itisanawesomephilosophyandweworkedthatway.(…)WehiredaventurecapitalistfromCalifornia,andhisjobwastocheckifthecompanies(competingintheCOTSprogram)werefinanceable.HecamethefirstdaywithaboxofTheInnovator’sDilemma.Hesaid:“Readthisbook.Itisabibleforinvestment,becauseitwilltellyouhowventurecapitalistsfindcompaniesthatworkasdisruptiveinnovators.Second,itwillshowyouhowtosetupyourprogramsoyousucceed”.So,wemanagedtocreateaculturethatallowedtenNASAemployeestoworkwithindustrypartnersandbringtwonewlaunchvehicles(Falcon9andAntares)andtwonewspacecraft(DragonandCygnus)totheUnitedStates.ConsideringtheInnovator’sDilemma,wewerereallyseparatedfromNASA’shumanspaceflightculturefromthestart.ThemajorityofNASAleftusalone,sincewewerecrazypeopledoingcrazythingsthatwouldultimatelybeunsuccessful.Duetothisseparation,wewereabletobuildourowncultureasweneededit.Wetookthebooktoheart.Mike(Griffin)reallysetusuptobecomethatsuccessfulspin-offculture.”(Timm,2017)Ifthisframeworkofanalysisprovespertinent,italsohastheadvantageofprovidingatooltoforecastthelikelyevolutionsintheshortandmediumterm,anticipatingfuturethreatsandprotectingfromthem.13.2 SustaininginnovationsTheprocessofdisruptiveinnovationgenerallygoesagainsttheinstinctivewaytothinkaboutinnovationprocesses.Whatisgenerallyadmitted,notablyinhigh-technologysectorssuchasaerospace,isthatonethatstopsinnovatingisquicklyovertakenbycompetitors.Indeed,whenairportswanttoreducenoiselevelstopopulations,anairplanemanufacturerthatfailstodeveloptheadequatenoise-cancellingtechnologyseesitssalesplummet,effectivelyprohibitingthefirmtodevelopthenextnecessarytechnologyduetolackoffundstoinvest,slowlyshrinkingitsmarketshareandrenderingitsknow-howobsolete,eventuallydrivingthecompanyoutofbusiness.Thisisthedominantmindsetamongaerospacecompaniestoday,andinnovationisbelievedtobetheonlywayforthesecompaniestosurvivewhenfacingcompetition:makingbetterproductssothatcustomerswanttobuythemratherthanwhatthecompetitionisselling.Thiscanbeanefficientwaytoanalyseinnovationpolicy,especiallywhendrivenbypublicfundingsuchasmilitarybudgets.Systeminnovationispartofacommonstrategyofdefencespending,called“Offsetstrategy”(Gros,2016)thataimsatdevelopingthetechnologies



capableofprevailingbeforeanenemydoesso.Thisstrategyislesscostlythanmatchinganopponent’scapabilitysoldierforsoldierortankfortank,butratheraimsatdevelopingtechnologieswhichcanoffsettheopponent’snumericaladvantagewithmoreadvancedsystems.Theseadvancedtechnologies,nonetheless,areextremelyexpensive.Thisisunderstandable:whenthearmyisdefeated,itdoesnotmatterwhattheexpenseswere,asawarcannotbehalf-wonorhalf-lostandisawinner-takes-allsituation.Therefore,thebestinnovationgenerallywinsmilitarycontractsandfirmsunabletokeepuplosecontractsanddisappear.Thisiscalledthemudslidetheory,sincefallingbehindwithtechnologyadvancesoftenmeansbankruptcyforhigh-technologycompanies.Thisisessentiallythewayrocketmanufacturershavethoughtaboutinnovationonlaunchvehiclesoverthelastfortyyears.TheSpaceShuttleisespeciallyimpressiveasatechnologicalachievement:thewordsSpaceShuttleareverymisleadingwithrespecttothecomplexityofthismachine,neverseenbeforeandunmatchedsince.Thegoalofthespaceshuttlewastoreducethecostofaccesstospacebydevelopingthemosttechnologicallyadvancedspacecraftintheworld.Agreatamountofdevelopmenteffortwentintotheengines,generallythemostcomplicatedpieceofequipmentofalaunchvehicle.TheRS-25,alsocalledSpaceShuttleMainEnginesaremarvelsoftechnology:reusableHydrogen-Oxygenstagedcombustionengines,capableofachieving1860kNofthrustfor366secondsofspecificimpulseatsea-level.ComparedwiththefeebleperformancesofVikingengineswhichequippedtheAriane1,2,3and4rockets,werenotrecoverable,onlyachieved693kNofthrustfor248secondsofspecificimpulseandconsumedtoxicfuel,thetechnologicaldividewaswide.However,increasingtheperformanceandreliabilityiswhatChristensencallsa“sustaining”innovationsincethisseekstoincreasewhatisperceivedasvaluableforthecustomer.Thereisapointintimewhentheproductperformancestartsbecomingsatisfactoryformostcustomers,whichisgenerallywhena“disruptive”innovationcangainafootholdinthemarket.TheSpaceShuttlewasaveryperformantlauncher,butformostcustomer’sneeds,Arianewassatisfactory,despiteitslowerperformance.Arianecanthusbeconsideredasthefirstdisruptiveinnovationinthelaunchsector.Asshownbyhistory,technologicaladvanceisnottheonlycriteriontoconsiderwhendealingwithmarketleadership.ThefailureoftheSpaceShuttletomeetitsoperationalgoalswascausedbymuchmorethantechnologicalhurdles,butalsoits“jackofalltrade”configuration:atthesametimeaspacelauncher,ahuman-ratedspacecraft,areusablespacestation.However,whatiseasytounderstandinhindsightwasnotobviousatthetime.Disruptiveinnovationsareextremelydifficulttopredictandshieldfrom.13.3 SpaceX’sdisruptionDisruptivetechnologyisaninterestingframeworktostudywhathappenedinthelaunchsectoroverthelastfifteenyears.Indeed,whatSpaceXmanagedtoaccomplishinthefieldofspacelaunchersisclosetoatextbooklow-enddisruption.



Thedisruptiontheoryisoftenpicturedinawrongwayinthemedia,asbeinganinnovationsoadvanceditwilldriveestablishedfirmstofailurebydoingthesamethingtheydo,justbetter.Thisisnotthewaydisruptiveinnovationworks:quitethecontrary,sinceestablishedfirmsusuallyhavenoproblemcatchingupwithnewtechnologiesthathelpthemimprovetheirproducts,andsincedevelopingnewtechnologiesiswhattheydoforaliving.Thosearecalledsustaininginnovation,sincetheyimprovethevaluesthattoday’scustomersalreadyvalue.Whatisdisruptiveisgenerallynotthetechnologyitself,itishowtechnologyisharnessedandused.Itisachangeofcultureandbusinessmodelratherthanachangeintechnology.“Disruptiveinnovations,incontrast,don’tattempttobringbetterproductstoestablishedcustomersinexistingmarkets.Rather,theydisruptandredefinethattrajectorybyintroducingproductsandservicesthatarenotasgoodascurrentlyavailableproducts.Butdisruptivetechnologiesofferotherbenefits–typically,theyaresimpler,moreconvenient,andlessexpensiveproductsthatappealtoneworlessdemandingcustomers.Oncethedisruptiveproductgainsafootholdinneworlow-endmarkets,theimprovementcyclebegins.Andbecausethepaceoftechnologicalprogressoutstripscustomer’sabilitiestouseit,thepreviouslynot-good-enoughtechnologyeventuallyimprovesenoughtointersectwiththeneedsofmoredemandingcustomers.Whenthathappens,thedisruptorsareonapaththatwillultimatelycrushtheincumbents.”(Christensen,1997)Technologyusedindisruptiveinitiativesisnotbetterthanwhatisreadilyavailableonthemarket;infact,itisusuallycheaper,lessreliableandconvenientthanestablishedtechnology,andnotwhatanestablishedplayerwouldwanttopursue.Thisistrueinaerospace,sincemostoftheculturedealswithimprovingperformanceratherthanmakingitsimpler.Arocketengineforinstanceisdefinedbytheamountofthrustandthespecificimpulseitcanprovide.Specificimpulseisgenerallysoughtafter,sinceitisthemetricwhich,ifincreased,allowsforreducedstructuralcoefficientandincreasedpayloadratio,theultimatemeasureofusefulnessoftherocket.Thosemetricsseektoincreasetheperformanceofthelaunchvehicle,whichmeanstheamountofpayloaditcandelivertoorbitwithitson-boardreserveoffuel.SpaceX’sstrategyonthecontraryaimedatbuildingthe“minimalusefulorbitallauncher”,theFalcon1.Thegoalwastogainafootholdinthesmallsatellitemarketindevelopment.In2008,SpaceXwonacontracttoresupplytheInternationalSpaceStation,anewmarketwhichallowedthemtoimprovetheirtechnologyanddevelopFalcon9,amediumlauncher.Still,incumbentssawnothreatintheprocess,deliveringcargototheInternationalSpaceStationnotbeingaveryprofitablemarket.Thisstrategywasnonethelessdiscussed.TheperceptionofthethreatonlycamewhenSpaceXstartedlaunchingsmallcommercialsatellites,butagainArianespacedidnotfeelparticularlythreatened,sincemostoftherevenuecomesfromlaunchingheavycommercialsatellites.TodaySpaceXlaunchesheavycommercialsatellitesandnowthreatensthemostdemandingsegmentofthemarket,DODandNROlaunchesperformedbyULAandOrbitalATK,andshouldstartlaunchinghumansnextyearortheyearafter.Asseenbelow,theseaccomplishmentsfollowtheincrementalimprovementcurveexpectedfromadisruptiveinnovation.



Figure3.SpaceX'supmarketmoveovertime,inspiredfromTheInnovator’sDilemma(Christensen,1997)

13.4 Europe’sintelligencefailureAsexplainedinsection10.5ofthepresentreport,theEuropeanreactionwaslatetodetectthepotentialthreatposedbySpaceX.Thiscouldbeexplainedatfirstbythenumberofrocketstart-upsintheUSAatthebeginningofthecentury,butasSpaceX’stechnologyprogressedandimprovedovertime,thisreasonalonebecameinsufficient.The“Growthimperative”inthetheoryofdisruptiveinnovationmayholdpartoftheanswer.Thisconceptexplainsthatmostfirmshaveanalmostirresistibleurgetoimprovetheirtechnologytoconquermoredemandingmarketsegments,butareunwillingtoallocateresourcestopursuelower-tiermarketsegmentsthatpromiselowermarginsthanwhatthecompanyisaccustomedto.Forinstance,whenNASAcreatedthemarketforISSresupplymissions,ArianespacesubmittedaproposaltoselltheATVonaDeltaIVbooster(FlightGlobal,2005).Accordingtoseveralindustryexecutives,thisproposalwasnotsubmittedwithmuchenthusiasmfrominstitutionalpartners,andwasinanycasenotatoppriorityforEurope.Onthecontrary,beingawardedthiscontractsavedSpaceXfrombankruptcy(Vance,2015).“First,disruptiveproductsaresimplerandcheaper;theygenerallypromiselowermargins,notgreaterprofits.Second,disruptivetechnologiestypicallyarefirstcommercializedinemergingorinsignificantmarkets.Andthird,leadingfirms'mostprofitablecustomersgenerallydon'twant,andindeedinitiallycan'tuse,productsbasedondisruptivetechnologies.Byandlarge,adisruptivetechnologyisinitiallyembracedbytheleastprofitablecustomersinamarket.Hence,mostcompanieswithapracticeddisciplineoflisteningtotheirbestcustomersandidentifyingnewproductsthatpromisegreater



profitabilityandgrowtharerarelyabletobuildacaseforinvestingindisruptivetechnologiesuntilitistoolate.”(Christensen,1997)SpaceX’stechnologywassimplerandcheaperthanwhatArianeorUnitedLaunchAlliancecouldoffer,sincemostofArianeandULA’scustomersfavouredreliabilityandhighpayloadcapacityasthedefiningcriteriatoselectalaunchsystem.TheemergingmarketsegmentofISSresupplymissiondidnotfavourthesamevaluesasmoredemandingGEOmissionsandUSinstitutionalsatellitesmarketsegments.Similarly,traditionalcustomerswereunabletouseSpaceX’sproductsattheonset,sincetheyneededmorepayloadcapacityandreliabilitytoconsiderusingtheselaunchers.Itisanaturalinclinationofestablishedfirmstopursuethemostprofitablemarketsegmentsitcanattain.However,itisalsothroughthisdismissaloflower-tiermarketsegmentsbyincumbentproviderthatadisruptorcangainafootholdinamarketsegment,andprogressivelyworkitswayupmarket.Thisallowsadisruptornotonlytoearnprofitmarginsitiscomfortablewith,butmoreimportantlydoingsoundetectedbyincumbentfirms.Thesecompaniesperceivethethreatonlywhenthedisruptorstartsgainingmarketsharesintheircoremarket.Reorganisingacompanytoeffectivelycompeteagainstadisruptoratthispointisextremelydifficult.Itisworthmentioningthattheseforcesarealwaysatwork:SpaceXnowaimsatgainingafootholdinthemostdemandingandprofitablesegmentsofthelaunchmarket,biginstitutionalUSsatellitesandhumanspaceflight,whileabandoningthelowest-tierofthemarketwiththecancellationoftheFalcon1program(Henry,2016).Thisgrowingmarketsegment,whereprofitmarginsareextremelylow,nonethelessseestheemergenceofafiercecompetition(PriceWaterCooperhouse,2017).13.5 TowardsaCommoditizationoflaunchsystems?Itisnecessarytodistinguishthevariousmarketdemandsandunderstandwhydifferentactorscandisruptestablishedplayers.Theprocessthroughwhichatechnologicalproductbecomeseasilyreplaceablebyanequivalentproductiscalledcommoditization.Agoodexampleofacommoditytodayisacomputer.Theyarepowerful,reasonablysturdy,easytouseandcheapcomparedtowhattheyusedtobe.Buteconomicactorsbuildingandsellingcomputerstodayarenotthesamewhichbuiltthefirstcomputers.IBMusedtobuildmainframecomputersbutmissedthemarketofminicomputers,ormoreaccurately,theydidnotbothertoenterthemarketatallsinceminicomputerswerenotverypowerful,theydidnothavethetoolstoproducethem,andtheirclientstoldthemtheyabsolutelypreferredtobuymainframesratherthanminicomputers.Therefore,DataGeneral,Prime,Wang,HewlettPackardandNixdorftookadvantageofamarketleftbythebiggestplayer.Theygrewbigthemselves,droveIBMoutofthemarketandwhenthenewwaveofpersonalcomputerarrived,theywerenotverypowerful,theydidnothavethetoolstoproducethemandtheirclientssaidtheypreferredminicomputers.“ItwaslefttoAppleComputer,togetherwithCommodore,Tandy,andIBM'sstand-alonePCdivision,tocreatethepersonal-computingmarket.”Todaycomputersarebuiltbymanycompaniesandarecheapandeasytobuyorreplacewithanequivalentproduct.Thisisnotthecaseforspacelaunchers,which



areveryspecializedandexpensivemachines,targetanarrowmarketandhavefewalternatives.Thecommoditizationprocessdefinesthevariousstepstechnologytakesbeforebecomingavailablewithoutconstraintstomanysegmentsofthemarket.Whenaskedtoordertheprioritiesfortheselectionofalaunchsystem,KenLeefromIntelsatranksthemassuch:First,performance,becausethereisnousetobuyalaunchserviceiftherocketcannotcarrythesatellite.Second,reliabilitybecauseasatelliteistooprecioustolose.Third,launchontimesincedelaysmeanmillionsofdollarsinlostprofitforthecompany.Fourth,thepriceofthelaunchsystem(Lee,2017).Thisrankingcloselyresemblesthestepswhichdefinecommoditizationinthedisruptionframework:firstthefunctionmustbefulfilled(functionality),thentheproductmustbereliable,thentheproductmustbeconvenient(launchontime,flexibility),thenprice(valueformoney).“Thisevolvingpatterninthebasisofcompetition—fromfunctionality,toreliabilityandconvenience,andfinallytoprice—hasbeenseeninmanyofthemarketssofardiscussed.”(Christensen,1997)Whencomparingthesecriteriatolaunchsystemscompetingforthesamemarkettoday,Ariane5andFalcon9,wecanseecleardifferencesinthewaytheyfulfilthosecriteria.13.5.1 Function:performanceofthelaunchvehicle,fairingsize.Ariane5fulfilsthefunctioncriteriaperfectly:itisaverypowerfullaunchvehicle,capableofcarryingthemostdemandingpayloads,withanimportantvolumeunderitsfairing.Ariane6shouldbeassatisfyingforcustomersonthisend.Falcon9,forthetimebeing,isjustpowerfulenoughtolaunchthemostdemandingpayloads,itsmaximumcapacityinexpendablemodebeinglimitedto6,7tonstoGTO.Somesatellitestodayweightnextto7tons,whichistooheavyforFalcon9.ThevolumeunderthefairingisnonethelesssatisfactoryandFalconHeavyshouldbeabletoaccommodateallpayloads.Followingthestepsdescribedbytheframeworkofdisruptiveinnovation,wecanclearlyseetheevolutionofFalcon9throughouthistory.ThefirstversionofFalcon9couldhavecarried4,64tofpayloadtoGTO(ataskitneverperformed),Falcon9v1.1couldcarry4,850ttoGTOwhenitbeganitsoperationallife.Falcon9FT,thecurrentversion,isnowabletocarry6,7ttoGTOinexpendablemodeand5,5tinreusableconfiguration,therebymeetingmostoftheperformancerequirementsofheavycommercialsatellites.TheFalconfamilythusevolvesthroughaniterativeprocesswhichdoesnotexistwithotherlaunchproviders.Thiscontinuingimprovementisacharacteristicofdisruptiveinnovations,whichtargetmoredemandingmarketsovertime.Thiscontinuousimprovementofthevehicle’sperformancemustbecomparedwiththefewenhancementsprovidedtoAriane5overitsoperationallifetime:thetransitionfrom6tonstoGTOin1996to10tonstoGTOin2002wasmadeatonce,withoutreplacementincaseoffailure.The2002flightwasunsuccessful,promptingtheneedforanemergencysubstitute



whichwascostliertooperatethantheplannedAriane5ECA:Ariane5G(generic),G+andGS,useduntilthemorestableAriane5ECAandESconfigurationsenteredinoperation.Concurrently,theplannedAriane5ME(MidlifeEvolution)abletoput12tonstoGTOwasultimatelycancelledinfavourofAriane6,itsdevelopmenttakingtoolongtobepertinentafterFalcon9enteredthemarket.13.5.2 ReliabilityAriane5isarecord-breakerintermsofreliability,withmorethan80consecutivesuccessivelaunches.Ariane6targetstobeasreliable,ArianegrouphavinglearnedfromthefirstfailureofAriane5in1996andthesecondonein2002,andplanningatransitionperiodaccordinglytoguaranteesuccess.Falcon9haswithstoodtwolaunchfailures,inApril2014andSeptember2016.OneofthemrevealedthatSpaceXwasperformingstaticfiretestingwiththesatelliteonthelauncher,whichwasauniquefeatureintheindustryandhassincebeenstopped.ThiseventleadsometowonderifSpaceXwas“cuttingcorners”tokeepupwithitsschedule,whilepushingitsagendaforMars-relateddevelopments.SpaceXissubjecttolessoversightthanUnitedLaunchAllianceorArianespace.Vehiclecertification,HRandaccountingprocesseswhichareextremelystringentandexpensiveforothercompaniesarenotappliedtoSpaceX.Falcon9’sreliabilityisnotconsideredasgoodasAriane5’s.However,itisworthnotingthatSpaceXissupposedtolaunch26timesin2017,ofwhich9flightshavealreadybeenaccomplished.Ifeachlaunchremainsonscheduleandnofailureoccurs,Falcon9wouldcatch-upwithAriane5’strack-recordinapproximatelyfouryears.Ariane5’sdifficultiestoevolvearelinkedtoitsconfiguration,whichallowsforlittlechange,butalsoitsstatedreliabilitywhichhinderstheabilityofmanufacturerstoinnovatesinceitisperceivedanadded-valueofthevehicle.Thereisacertainconservatismamonglaunchvehiclemanufacturers,astheybegrudgetochangesomethingwhichiscurrentlyworking.Thismindsetallowsforimportantsafetyandreliability,butalsoprecludesrisk-takingmeasuresattherootoftechnologicalprogress.Therefore,acompanywhichmarketsmostlyitsproductsreliabilityisatriskofbeingdisrupted,whenabsolutereliabilityceasestobetheonlycriteriaitsclientsarelookingfor:thisisanevolutioncurrentlyongoingwithsatelliteoperators,especiallyestablishedoneswhichseektoreducetheirCapexbyputtingpressureonsatellitemanufacturersandlaunchserviceproviders.13.5.3 Convenience:launchontimeandflexibilityAriane5isnotaveryconvenientlauncherforoperators.Sinceitusesadual-launchconfigurationforGTOsatellites,itsscheduleisdependentonwhenitcanpairtwosatellitesthatfitinsidethefairingandtheSYLDAadapter.Lately,theevolutionofthemarketandthesizeofsatellitemeansArianecannotaccommodatetwobigsatellites,butmustselectabigandasmallsatellite.Feweropportunitiesforthistypeofpairingcanputstrainonsatelliteoperator’sschedules.TwoAriane5hadtolaunchwithasinglesatelliteonboardin2016,whichmeantlostrevenueforArianespaceandahigherfeeforthecustomer(Selding,2016).



Ariane6shouldbemoreflexible,becauseitwillbeabletoreducethenumberofboostersusedtolaunchinadualorsingleconfiguration,anditwillbeequippedwithare-ignitableupperstageengine,Vinci.Thepairingwillalsobeeasier,asincreasedcapabilitymeanstwobigsatellitescouldfitunderitsfairing.Thisshouldallowabetterflexibilityfororbitalinsertionmanoeuvres,butthelaunch-on-timecriterioncouldremainaproblem.Confrontedtotheriseofcompetitorsinthelaunchmarket,Ariane6’slackofconveniencecouldbeamajorhindranceforitsabilitytoconquernewmarkets.Falcon9shouldtheoreticallybemoreavailableandflexiblethanAriane6,butSpaceXisstrugglingtomeetitscurrentschedule.OneclienthasalreadyswitchedtoArianespacebecauseofdelays(Young,2016).InJune2017,SpaceXconductedtwolaunchesinlessthanfiftyhours,confirmingtheirefforttomeettheirdeadlineandcatching-upontheirmanifest.Falcon9andlaterheavycouldbecomemoreavailablethanAriane6ifSpaceXmeetsitsgoals.Oneofthekeycomponentstothisabilitytolaunchontimecouldbereusability,whichisaddressedbelow.Accordingtothetheoryofdisruptiveinnovationandtheprioritiesofsatelliteoperators,convenienceisincertaincasesmoreimportantthanprice.Thispointwasextremelyclearinthecaseofinsulinmakers.Insulinisadrugusedtoregulatediabetes.Diabeticpatientsareforcedtotakeittokeepthedangeroussymptomsoftheirdiseaseundercontrol.Thedemandforinsulinisextremelyinelastic,meaningthatitisnotsensitivetopricevariations:whateverthecostofthedrug,patientswillbeforcedtobuyanduseit.Onekeyparametertoestablishthevalueofinsulinisitspurity,sinceitisextractedfromthepancreasesofcowsandpigs,andsomepatienttendtodevelopanimmuneresponsetotheseproducts.Patientsbuyingpiginsulintalkedaboutthisissuetotheleadingfirminthebusiness,whichinvested$1billiondollarstocreatearevolutionarynewtypeofinsulin,chemicallysynthetized,thatwouldnotcauseanyimmuneresponse.Theproductwasmarketedatapremiumof$25cents.Thesaleswereextremelydisappointingandthehigherpricewasdifficulttosustainforthecompany.MeanwhileanotherfirmcalledNovowasdevelopingalineofinsulinpen.Thisprocesswasmucheasierthanthegenerallycumbersomeoperationofputtingasyringeinavialofinsulin,injectingtheproduct,theninjectingasecondproductafterthefirstone.Thisoperationtookonetotwominuteseachdayandpatientswereforcedtocarryallthematerialwiththemtoaccomplishit.Thepenremovedtheneedforsuchextensivemedicalgear,thepatientonlyselectingtheneededdose,injectingit,andthrowingawaytheexpandedsyringe.Thepremiumaskedoninsulinpenwas30%anditbecameamarketsuccess,Novoquicklyincreasingitsmarketshareattheexpenseofestablishedplayers.Theparadoxinthissituationisthattheinsulinsoldinpenwasofalesserqualitythanwhatwasavailablewithestablishedplayers,andinjectionpenwerenotanewtechnologyeither.However,insulinpurityhadstoppedbeingagoodmeasurementformarketvalue,sincethemarketwashappywithregularporkinsulin,exceptforfewpatientswhoencounteredproblemswithit.Therefore,thenextthingtoimproveaboutthetechnologywastheconvenienceofitsuse.



13.5.4 PriceThepriceoflaunchvehiclesisneverdisclosed,andconsideredproprietaryinformationbybothlaunchserviceprovidersandcustomers.Nevertheless,informationisavailablefromseveralsources,andeventhoughexactamountsremainsecret,pricerangescanbededuced.Ariane5issupposedtocostintherangeof€150-200millionperlaunch(Mennessier,2013).ThismeansthatthepriceissharedbetweentwooperatorslaunchingonAriane.Thereislittleinformationonhowthiscostisdividedbetweenoperators.Followingasimpleshareoftheperformanceofthelauncher,whichcanputupto10,8tonstoGTO,itispossibletoestimatethatlaunchinga6,5tonssatelliteonAriane5costsintherangeof€100-120millionanda3,5taround€50-75million.Ariane62,thesingle-launchconfigurationofAriane6usingtwoexternalboosters,issupposedtobepricedat€70million(Mennessier,2013).Thedual-launchAriane64withfourexternalboostersshouldbepriced€90milliontobesharedbetweenbothsatelliteoperators.Althoughthesepricesaremuchlowerthancurrentones,aheavysatellitelaunchshouldcostaround€60milliononAriane64,whichisoftenequaltoorhigherthanthe$62millionofficialpriceforaSpaceXlaunch,dependingontheforeignexchangeratebetweentheeuroandthedollar.TheplannedsinglepayloadversionAriane62wouldbemoreexpensivethanSpaceX’scurrentofficialprices.Falcon9ispriceddifferentlywhetheritaddressesacommercialorinstitutionalcustomer.Onthecommercialmarket,theofficialpricetagis$62millionfor5.5ttoGTO(SpaceX,2012).Theactualpriceseemstovarygreatlyformonecustomertotheother,andSpaceXchargesmoreforanycustomerdemandbeyondthestandardlaunchservice.InstitutionalcustomersseeanincreaseinthepriceofaFalcon9:aGPSIIIlaunchhasbeenreportedtocost$82,7million(Gruss,2016a).SpaceXDragonresupplymissionstotheInternationalspacestationappeartocostbetween$130and$150millionpermissiondependingonthesource.Accordingtoeveryreportthough,Falcon9islessexpensivethanAriane5.ThispricedifferenceiscurrentlylinkedtothewaySpaceXconductsitsoperations,thetimeengineersdedicatetotheirwork,andtheirmanufacturingtechniques.Anelementoftenquotedtofurtherreducethepriceoflaunchersisreusability,butlaunchoperationsofrefurbishedcoreshavejuststartedandfewdetailsareavailableonthepriceofsuchlaunchesandthecostofrefurbishmentoperations.ThecurrentfulfilmentofthesecriteriabyAriane5andFalcon9aresummarizedbelow.Criteria Falcon9(SpaceX) Ariane5(Arianespace)

Function(performance/Fairing) Good VeryGoodReliability(launchrate,certificationmeasures) Good VeryGood



Availability Medium Medium

Cost Good MediumFigure4.Criteriafulfillmentbycurrentlaunchsystems

13.5.5 Ariane’svaluepropositionandthedangersofdual-launchTheselaunchvehiclesarenotonthesamepathtocommoditization.Indeed,theperformanceofFalcon9isalmostsufficienttoaccommodateallbuttheheaviestsatellites,suchasaheavyNASAprobeornationalsecuritypayloadsfromtheAirForceorNRO.Ariane5canliftmorepayload,butthiscapabilityisrarelynecessaryforasinglepayload.ExceptionsaretheEuropeanATV,whichlastflewin2014,andtheJamesWebbSpaceTelescopestatedtoflyin2018incooperationwithNASA.Ariane5ECA,themostcommonlyusedversionofAriane,isonlyusedtolaunchdualpayloads.Initiallycreatedtoreducethepricepaidbyoperators,thissettingcouldbecomeaprobleminafewyears.Aswehaveseen,thevaluepropositionofArianespaceisthehighcapacityofthelaunchercoupledwithitsgreatreliability.Thosecriteriafitthetwomostimportantvaluesforasatelliteoperator.WhatitalsomeansisthatanysatellitelauncherthatcanachievethesamedegreeofreliabilityasArianecouldattractcommercialclientsonthesamegrounds.Suchacompetitordoesnotexisttodaybutmayinafewyears.Incasesuchacompetitoremerges,whetherSpaceXoranotherprovider,thecommercialcustomerwouldthenchooseitslaunchproviderbasedonthenextmostimportantcriteriaonitslist,whichareconvenienceandprice.Forasatelliteoperator,timeismoneysinceeverydayasatelliteisnotonorbit,theoperatorlosesrevenue.Whenlaunchdelaysbecometooimportant,theycanputoperatorsinadifficultposition,forcingthemtopressurelaunchproviderstoacceleratethelaunchprocess.Inthiscase,adual-launchconfigurationcancomplicatelaunchschedulestothepointthatsatelliteoperatorswouldratherpayapremiumandseetheirsatellitelaunchontime.SuchasituationoccurredinJanuary2016whenIntelsatdecidedtopayfortheentireAriane5capacityratherthanwaitforasecondcustomerforthelaunch(Spaceflight101,2016).Itseemsthatsatelliteoperatorsfindvalueinalauncher’savailabilityandflexibility.Availabilityisdefinedasthecapacityofthelaunchertolaunchontime,andflexibilityasthecapacitytohavedifferentstrategiesfororbitraising,whichisessentiallyamarginofperformanceabletoprovideasatellitemoredelta-vforfasterorbitalinsertion.Usingtheframeworkofcommoditizationprovidedbythetheoryofdisruptiveinnovation,aswellastheanswersfromsatelliteoperators,wecanassumethattheavailabilityandflexibilityofalauncherdefineitsconvenienceforsatelliteoperators.InsistingonconvenienceappearsastherationalebehindthefewAtlasVcommerciallaunchesperformedbyULA.Thecompanywebsitevaluesconveniencecriteriasuchasschedulecertaintyandorbitraisingcapacityat$57million.Comparatively,thereliabilitycriterionisonlyvalued$12million(ULA,2016).Selectingadual-launchconfigurationforAriane64thereforeappearsasariskydecision,sinceithinderslaunchserviceconvenience.Themarketforlaunchservicesshouldevolvein



thenextfewyears,sinceseveralsystemsabletocompetewithAriane6arestatedtobecomeavailablearound2020:NewGlennbyBlueOrigin,VulcanbyUnitedLaunchAlliance,H-IIIbyMitsubishiHeavyIndustries,GSLVMk-IIIbyISROandFalconHeavybySpaceX.RussiahasalsocomebackonthecommerciallaunchmarketwithProtonandAngara-5couldbecomeacompetitorinthefuture.China,stillbarredfromcommerciallaunches,operatesLongMarch3b,areliablelauncherwhichmayoffertolaunchcommunicationsatellitesbuiltinChinaasapackagedeal.Thecurrentlaunchmarketiswhateconomistscallaseller’smarket:therearefewlaunchoperators,pricesarehighandsatelliteoperatorsusuallyagreetolaunchprovider’sconditions.Thesituationwilllikelyreverseinafewyears,consideringthatthesupplyoflauncheswillgreatlyincrease,whilethedemandforlaunchesshouldremainstable,accordingtomarketforecasts.Evenifeverysatelliteconstellationprojectbecomessuccessful,thesegenerallychoosesmallerlauncherssuchasSoyuz-classvehicles,whichareusedtolaunchOneWebfirstinstalment,orevensmaller.Thesituationshouldthereforebecomeabuyer’smarket,comparabletothesituationexperiencedintheearly2000’safterthecrashofthetelecommunicationmarket.Atthetime,AmericanandEuropeanlaunchprovidersfounditextremelydifficulttogenerateaprofitoncommerciallaunchesonly,andfromthisperioddatesthecreationofULAandtheEGASprograminsupportforArianeoperations.Commercialsatelliteoperatorsshouldthereforehavemorepowerandpressurethepricingoflaunchvehicles.Itisgenerallyadmittedthatcommercialoperatorsfeeltheneedtohaveatleastthreedifferentlaunchersavailable,forredundancypurposes.Thereshouldbefromthreetoeightcommerciallylaunchersavailablein2020.ThiswillputpressureonAriane6’soperations,bothintermsofpricingandconvenienceforoperators.Thelackofconvenienceofthedual-launchsystem,alreadyperceptibletoday,couldbecomeunacceptabletooperatorswhenmoresingle-payloadlaunchersbecomeavailable.WhatprotectsAriane’smarketsharestodayisthelackofalternativelauncher,SpaceX’simportantdelays,andagreatreliabilitycomparedtobothProtonandFalcon9.WhatthisalsomeansiswhentheperceivedreliabilityofotherlaunchprovidersmatchesthatofAriane,dual-launchwillimpedefurthergrowthbecauseofitslackofconvenience.ThecurrentAriane6businessmodelcallsforthelaunchofseventeensatellitesperyear,fiveinstitutionalsatellitesonAriane62andtwelveonsixdual-launchesAriane64(Selding,2017b).Ariane6’smodularconfigurationwouldbeanassetinsuchamarket,allowingArianegrouptoofferanAriane62single-launchinsteadofanAriane64dual-launchtocustomers.However,itisunlikelythatthebusinessplanwasconceivedthisway,andsinceindustrialproductioncapabilitieshavebeensizedfortwelveVulcain2enginesperyear,Arianegroupwillnotbeabletoprovideeachcustomeradedicatedride.Beforeaddressingtheproblemofcostandpriceofthenewlaunchvehicle,itisthereforeimportanttoaddresstheconveniencetheservicemaybeabletoprovidecustomers.Ariane6seemstobetheanswertotheproblemofprice,althoughitaddressestoday’schallengeswithoutknowingwhattomorrowwillbring.However,theevolutionofconvenienceis



predictablesincetheneedsandhurdlesofsatelliteoperatorsarewellknown.Providingmoreconveniencetotheuseoflaunchsystemsappearstobeasimportant,ifnotmore,thanreducingthepriceoflaunchsystems.Thiscouldbeagoodreason,ifnotthemainone,forthedevelopmentofreusablelaunchvehicles.

14 Reusability,adisruptiveinnovation?14.1 Thelong-lastingdebateovereconomicimpactThereusabilityofrocketstageshasbeenstudiedsincethefirstspacelauncherdesigns.WernhervonBraunthoughtofwingedrocketsabletogetbacktotheirlaunchpadafterstaging(Portree,2017).TheAirForceX-15,andtheplannedX-20Dynasoarspaceplanewereearlyattemptstocreateaspacecraftcapableofreachingspaceandbereused.AftertheApolloprogramended,ateamledbyMaxFagetatNASAcreatedthefirstreusableorbitalspacecraftinhistory,calledSTSforSpaceTransportationSystem,colloquiallyknownastheSpaceShuttle.TheSpaceShuttlewassupposedtoreducethecostofaccesstospacebytenorevenahundredfold.Itwouldallowforroutineaccesstospace,launchingasmuchas50timesperyearandguaranteeasafeandaffordablevoyagetoorbitforastronauts,bothfromtheUSAandothercountriesintheworld(ColumbiaAccidentInvestigationBoardPublicHearing,2003).Reusabilitywasanearlyrequirement,atthecoreofthelogicoftheSpaceShuttle.Theorbiter,whichhousesthecockpit,thepayloadbay,thewings,thefuselage,theorbitalmanoeuvringsystemandthethree-largeliquidrocketenginesarealwaysrecoveredandrefurbished.Bothsolid-rocketboostersarealsorecovered,andoftenrefurbished.Onlytheexternaltankissystematicallydiscarded.Thevehicleprovedtobeextremelydifficultandexpensivetorefurbishandfly,didnotachieveanyofitsstatedoperationalgoalsandwasalsodangeroussincetwocrewsperishedduringflight.ThecaseoftheSpaceShuttleisinterestingbecauseitrevealshowmuchwishfulthinkingandwhatfirstappearsascommonsensedoesnotholdinthefaceofoperationalconstraintsandrigorouseconomicanalysis.Indeed,althoughtheSpaceShuttleachievedmanyofitsoriginalgoalsofrestoringAmericanpride,challengingtheSovietUnionwaningeconomicpower,providingelectoraldistrictswithjobsandguaranteeinghumanaccesstospaceforAmerica,thefailureoftheSpaceShuttleprogramfromaneconomicandoperationalpointofviewistelling.EuropeanactorschosetofocusonexpendablelaunchvehicleseversinceAriane,choosingnottobelievetheroutineaccesstospacepromisedbytheSpaceShuttle.Atthattime,optingforalaunchvehicleoperatedfreelybyEuropeanactorswasachoiceofindependenceandsovereigntymorethanmotivatedbyaneconomicrationale.Indeed,theimportantaspectoflaunchsystemsistheapplicationstheyenable:thecheapestlaunchsystemisuselessifthereisnocontroloverthepayload’suse.ThecaseoftheSymphoniesatellitewasawake-upcalltoEuropeanactors(ProcacciaandSido,2012).EventhoughArianemaybemuchmoreexpensivethantheShuttle,itwouldatleastprovidethecapabilityneededforindependentaccesstospace,whichcouldthenbeusedtobargain.



UnfortunatelyfortheUS,andfortunatelyforAriane,thereusabilityoftheshuttleprovedtobeimmenselywasteful.Therootofallproblemshasbeentracedtotheheatshield,orThermalProtectionSystem(TPS)madeofseveralthousandsmallthermaltiles.Theirmaintenancewasextremelylongandcostly.Therefurbishmentofexternalboosterswasalsoverycomplicated,sincetheyspenttimeinsaltywater,requiredseveralteamstorecoverandmonthsofoverhauling.ThereusabilityofelementsoftheSpaceShuttlebecame,veryearlyintheprogram,partofthecultureoftheprogramandtherationalebehindmanyrequirements.LaunchvehiclereusabilityisdeeplyrootedinAmericanculture,especiallyamongNASAandspaceadvocates.ManyworksmentionthepossibilitiesopenedbyUltraLowCostAccessToSpace,orULCATS(Harrison,2017),whetherforcommercialinitiativesormilitaryusesofouterspace.Duringthe1990s,NASAandDODcreatedseveralexperimentalprogramsdesignedtoimprovethetechnologiesusedinreusablelaunchers.OneofthemostsuccessfulconceptswastheDC-X.TheMacDouglasDeltaClipperwasanexperimentalvehiclewhichfirstflewin1993underthesupervisionoftheStrategicDefenceInitiativeOrganisation,thenunderNASA’sdirection.Itaccomplishedseveralflightsandpoweredlandingsbeforeitsdestructionafteranaccident.TheDeltaClipperconceptcalledforasingle-stage-to-orbitlaunchvehiclewhichwouldalsobereusable.ThevehiclewouldbeVTVL,whichmeansVerticalTake-offandVerticalLanding.ItsconceptofoperationprovedvaluabletocreateSpaceXGrasshoppertestvehicleandBlueOrigin’sNewShepardsuborbitalvehicle.AlthoughtheDeltaClipperneverbecameoperational,itwasconceivedandoperatedonatightbudgetcomparedtousualNASAcontracts.Intotaltheprojectcostaround$100million,andachievedeightpoweredflights(Astronautix,2017).NASA’smainprogramduringthe1990swasmoreambitious.AftertheSpaceShuttle,NASA’snexthuman-ratedvehiclewassupposedtobealargeSingle-Stage-To-Orbit(SSTO)reusablespaceplanecalledVentureStar.ThisnewvehiclewassupposedtoreducethecostofaccesstospacecomparedtotheSpaceShuttle.ItwouldlaunchverticallyandlandliketheSpaceShuttle,butwouldnotneedexternalboostersnorafueltanksinceitcarriedeverythingwithinitsfuselage.ThefuelwouldhavebeenHydrogenandLiquidOxygen,andtheengineanextremelyefficientlinearaerospike.TheVentureStarprojectwascancelledin2001aftermajorfailuresofhydrogentanksoftheX-33testvehicledoomedtheproject.Intotal,itcostmorethan$1billionbeforeitscancellation(NASA,2017a).ReusablespaceplanesarealsoinvestigatedinEurope,oneofthemainprojectsbeingSkylon,formerlyknownasHOTOL.ThisHorizontalTake-OffandLandingspaceplaneissupposedtobeabletoreachorbitandbereused,thereforegreatlyreducingthecostofaccesstospace.Oneofthekeytechnologiesdevelopedforthisprogramisanair-breathingrocketenginecalledSABRE,capableofoperatingasaregularaircraftengineintheatmosphere,turningintoarocket-propelledcraftoncetheairthinsout(Amos,2014).Mostofthoseconceptsarebasedonthesimpleideathatareusablesystemisnecessarilylesscostlythananexpendableone,andthatsingle-stage-to-orbitisnecessarilybetterthanmulti-stagerockets.Theseassumptionshavefewbasisotherthananideology,whichtooka



politicaltoneassoonasthecompetitionbetweentheSpaceShuttleandArianeemerged.ThereusabilityparadigmhasalwaysbeenfavouredintheUSA,buildingupontheexperienceoftheShuttleprogramandtheexperimentsconductedsince.Manyeconomicanalysishavesinceindicatedthedeceivingeffectofreusabilityonlaunchsystems,notablythatexpectedbenefits,ifanyexistatall,arenecessarilymorelimitedthananticipated(Parkinson,2016).Thedangerwhenanalysinglaunchsystemsreusabilityisthattheentireeconomicequationoflaunchsystemsiscounter-intuitive.Throwingawaysuchexpensivehardwareisunderstandablyboundtomakeanyonewonderattheopportunityofusingitagain.However,thepriceperflightofaSpaceShuttleservesasareminderthatreusingisnotnecessarilyapanacea,asitincreasedthecostofaccesstospacefortheUSA.Doesitmeanthatreusablelaunchsystemsdonotmakesenseatall?ItiswhatmostactorsinEuropetendtoanswer.Europehasalwaysbeeninterestedinlaunchsystemreusability.ChristopheBonnalstudiedtheuseofreusableboostersforAriane5.In2014,hestated“Thesereusablestagesatthestartofourstudieswerejustcylinderswithenginesandlittlewings.Threeyearslater,theyhadbecomecompleteAirbusesintermsofsize,withfourenginesoneachofthem.Ourmainproblemwastheimpactreusabilityhasonthedesignofthelauncher.Safetyfactorshavetobehigher,andyouneedaround30percentmorepropellantinthefirststagetoflythestagebacktothelaunchsite.”(Svitak,2014)Europeanactorsareextremelyscepticalwithreusablelaunchers.Indeed,whenaskedaboutSpaceXoperationsandreusabilityattempts,Arianespace’sanswerisgenerally“theeconomicequationhastobeproven”(Cabirol,2016).Manyspecialistsestimatethatreusabilityisthewrongsolutiontoanswertheproblemofaccesstospace.Theiropinionhasbeenshapedbyeconomicanalysisofthelaunchsector,thecurrentcostofaccesstospaceandacomparisonbetweensimilarvehiclesinexpendableandreusableconfiguration.Thispositionhasbeenextremelystrong,butreliedonalmostaslittledataasreusablelaunchvehicleadvocates,simplybecausenotenoughexamplesexistoutsidetheSpaceShuttle.SeveralelementscanexplainthisEuropeanposition,andwhyEuropeneverdevelopedanytechnologyrelatedtoreusablelaunchsystems.First,thefailureoftheSpaceShuttletomeetitseconomicgoalsandtheriseofArianeremindedEuropeanstobecautiouswiththeirtechnologicaldevelopmentchoices,andthatagreattechnologicalaccomplishmentdoesnotnecessarilylevereconomicefficiency:theConcordeisagoodexample.Thefailureofsubsequentprogramstoproduceanyoperationalvehicle,fromtheX-33programtotheNationalOrbitalSpacePlane,incitedEuropetocaution.Secondly,thecancellationoftheHermesspaceplanemayhaveactedasareminderthatsuchadvancedcapabilitywasnotnecessary,andthatreusabilityleadstooverengineeringinseveralcases.Third,itisverylikelythatAriane’scustomersneverrequestedreusablelaunchers,thereforethemotivationtodevelopthiscapabilitydidnotexist.OpinionschangedwiththesuccessfulsuborbitalflightofBlueOrigin’sNewShepard,andthefirstlandingofSpaceXin2015.Theofficialwordisthatthebenefitisstillnotproven,andindeeditisnot,buttheconsiderationgiventoreusablelaunchvehicleshaschanged.In2015,AirbuspresentedtheAdelineconcept,consistinginflyingtheenginebacktothelaunchbase.In2016,CNESunveiledtheProméthéeconceptofa3Dprinted,methane-



fuelledreusableengine.InFebruary2017,thenewly-christenedPrometheusbecameanESAproject,atechnologydemonstratorcomparabletoSpaceXGrasshoppervehiclebeingplannedincooperationwithDLR,theGermanSpaceAgency,andJAXA,theJapanesespaceagency.14.2 AnoperationalmanagementproblemFromthepointofviewofthecustomer,reusabilityaddsnothingtothevaluepropositionofthelaunchoperator.Satelliteoperatorsandothercustomersoflaunchsystemshavevariousrequirementsaspresentedabove:Firstthefunction,thenthereliability,thentheconvenience,thentheprice.Whetherthelaunchvehicleisfreshoutofthefactoryorlaunchingforthetenthtimedoesnotmatterforthecustomerifthosefourrequirementsarefulfilled.Reusablevehiclesarethereforeanissueforlaunchvehiclemanufacturersandlaunchserviceoperatorsonly:ifreusabilityincreasesthevaluepropositionoftheirservice,itmakessensetopursuethedevelopmentofthistechnology.Ifitreducesthevalueproposition,itdoesnotmakesense.Belowisastudyofthelikelyimpactofreusabilityonlaunchservicevalueproposition.14.2.1 ReusabilityhindersthefunctionandreliabilityofalaunchvehicleFunction,definedastheamountofusefulpayloaddeliveredinorbit,andreliabilityarebothimpactednegativelybyreusability.Theperformanceofalaunchsystemistheamountofaccelerationitcantransmittoacertainmassfollowingtherocketequation.Acknowledgingthisfactorasameasureofperformanceofthelaunchsystemmeansreusabilitynecessarilyimpactsnegativelytheperformanceofthelauncher,asacertainpercentageofmassmustbecarriedon-boardtoperformnecessaryrecoverymanoeuvres.ForthemanoeuvreperformedbytheSpaceShuttle,whichglidesbacktoarunway,performancepenaltyistheweightoftheThermalProtectionSystemandthewings.ConsideringtheSpaceShuttleasaregularlauncherismeaninglessthough,sinceitwashumanratedandoccupiedbyhumansduringeachflight.Theside-boostershadtocarryalittlemoremass,sincetheywerefittedwithparachutes,allowingtheirrecoveryfromseawater.SpaceXpubliclydisclosedthepercentageoflossofperformanceontheFalcon9tobearound30%ofthefuelofthefirststage.Itmeansthatinordertobeabletorecoverthefirststage,SpaceXmustabandoncloseto30%ofpayloadcapacity.ThisisunacceptableforAriane5sincetheperformanceofthelauncherisessentially“sold”tothecustomer.Therefore,anyunusedperformancewouldstillhavetobebilledtothecustomer,makingthepriceofaccesstospacehigherforalowerperformance(Selding,2016).ThislogicisthecurrentdominantspeechofEuropeanactors.Thereliabilityofalaunchvehiclemaybeimpactedbyitsreusabilityaswell.Thereiscurrentlynopublicdataavailabletoassertit,butmechanicalforcessufferedbyalaunchvehicleonanorbitalorsuborbitaltrajectoryareveryimportant.Heatingisalsoaproblem,resolvedeitherbytheadjunctionofaheatshieldasontheSpaceShuttle,orbyperformingare-entryburnasSpaceX.



Thefatigueenduredbythelaunchvehiclebecauseofitsownfunctioningisalsoveryimportant:theSpaceShuttleMainEnginesweresupposedtoreceiveonlyminimummaintenance:“Duringtheroutinemaintenanceperiod,anautomaticcheckoutand100%externalvisualinspectionareconducted”(Wheelock,1973).Inpractice,SSMEshadtoberemovedfromtheorbitereachtimeandextensivelyoverhauled.TheoperationalmaintenanceofSSMEsconstitutedoneofthemostexpensivefeaturesoftheSpaceShuttle.Currently,SpaceX’sMerlin1Denginesaresufferingfromcracksinthebladesoftheirturbopumps(Boyle,2017).AlthoughSpaceXguaranteestheenginedesigntobefoolproofedagainstthosecracks,itislikelytheymayposeathreatafterseveralfirings.EventhoughSpaceXtalksabout“flightproven”cores,thereliabilityofreflownboosters,orevenprocessestoassessthisreliabilityareunclear.Thetwomaincustomerrequirementsforlaunchservicesarethereforehinderedbyreusability:theperformanceislower,reliabilityuncertain.14.2.2 ReusabilitymayimproveconvenienceConveniencehasbeendefinedastheavailabilityandtheflexibilityofalaunchsystem.Reusingrocketcorescouldhaveanimpactontheavailabilityoflaunchvehicles,sincetheyarelesssubjecttoarigidproductionandtestingschedulesthannewvehicles.Indeed,launchvehiclemanufacturingfacilitiesaregenerallyoptimizedforacertainrateofproduction.SpaceX’sHawthornefacilityisdimensionedtoproducefortyFalcon9coresperyear,arateofproductionthefactoryisnotyetcapableofachieving.ArianegroupcanproducesixAriane5peryear,uptosevenperyearifnecessityrequiresit.Ariane6facilitiesshouldproduceuptotwelveAriane6peryear.Rocketproductionthereforefollowsaninherentlyrigidschedule,thatcannoteasilyadapttothedemand:mostproductioncostsarefixedcoststhatdonotvarydependingonthequantityofgoodsproduced.ItmeansthatwhetherArianegroupproducessixoronlytwoAriane5peryear,mostofthecostsremainthesameandarespreadoverareducednumberoflaunches.Thisalsomeansthatlaunchscheduleistiedtothecapacitytoproducelaunchvehicles,andconverselythatsatelliteoperatorsdiscusswithlaunchserviceoperatorstoamendtheirownscheduleandmakesurethatsatellitesandlaunchvehiclesbecomeavailableatthesametime.Reusabilitycouldplayaroleinaddressingtheneedofcustomerstolaunchatthetimeoftheirconvenience.Indeed,reusingandrefurbishingarocketstagecouldbeawaytoaddadditionalcapacitytoaregularlaunchschedule.Benefitingfromadditionalcapacityreadytoflyassoonasrefurbishedmaythereforebeagreatassettoalaunchprovider,sincedelayingalaunchcostsalot:Arianespace’sStephaneIsraelindicatedArianespacewaspaying€500000perdayduringtheblockadeofGuianaSpaceCenterin2017.ThismeansArianespacelost€15millionpermonthofdelay:thispenaltyimposedonthelaunchproviderrepresentsalossofearningsforthesatelliteoperator,andcouldbereducedbyatimelylaunch.



Reducingdelaysalsobenefitsthesatelliteoperator,whichcanusetheflexibilityprovidedbya“launchondemand”capability.Adaptingsatellitemanufacturingschedulestolaunchschedulesiscomplicatedsincebothdeliveriescanbesubjecttodelays.Infact,theUSAirForcehasprovidedULAwithacontractworth$860millionperyeartohaveanassuredcapabilitytolaunchwhenevernecessary(AirForce,2017).TheadditionalfundingallowstheAirForcetoputtheriskonULAandnotseeanincreaseinlaunchpricesbecauseofdelaysonasatelliteprogramforinstance.EssentiallythismeansthattheAirForceconsiderslaunchavailabilitytohaveavalue,andthatvaluetobeworth$860millionperyear(Gruss,2016b).Choosingbetweenreusingornot,asFalcon9isabletodo,canprovideaddedflexibilitytothelaunchprovider:iflaunchislateforinstance,theaddedfuelnormallyusedtorecoverthefirststagecanbeusedtoprovidemorekineticenergytothepayload,thereforenullifyingthedelayatthecostofafirststage.ThishasalreadybeenputintopracticebySpaceXatleastonce.Theadditionalperformancecouldalsobeusedtoprovideasatellitemoredelta-vtoreachitsgeostationaryslotmorequickly,acapabilitythatcouldbecomeimportantasall-electricsatellitebecomeubiquitous.Thevalueforscheduleandperformanceconvenienceislikelytogrowasthecommercialmarketbecomesmorecompetitiveandtendtowardsabuyer’smarketaround2020.Ifreusabilityallowsforamoreflexibleschedule,itispossiblesatelliteoperatorswouldbewillingtopayapremiumforthisservice.Asshownabove,convenienceisgenerallyconsideredmoreimportantthanpricewhenaproductisonthepathtocommoditization.Effortstodevelopreusabilitycouldthereforefocusontheconvenienceprovidedtothecustomerratherthanonapricewar.Thinkingintermsofconveniencealsocallsintoquestionwhatlaunchprovidersarereallyselling.Iftheyaresellingarocket,itwouldbenaturaltheclientcomplaintswhenthefirststagehasalreadybeenusedbyanothercustomer,ifthepriceremainsthesame.However,iftheprovenreliabilityofarefurbishedstageisthesameasanewstage,thereisnoreasonforthecustomertocomplainsincetheyarenotbuyingarocketperse,butalaunchservice.Focusingonthequalityofwhatlaunchoperatorssell,thelaunchservice,ratherthanontheperformanceofthelauncher,avoidsthemisconceptionthatthecustomerisbuyingthelauncheranditsrelatedperformance.Furthermore,improvingtheconvenienceoftheserviceexplainswhy,ifthereliabilityofarefurbishedlauncherisguaranteed,asatelliteoperatormaybereadytopaymoreforareusedlauncherthanforanewone.Reusabilitycouldthereforeincreasethepriceofalaunchratherthanreducingit,atthebenefitofthelaunchprovider.14.2.3 Theunresolvedquestionofcostandprice:isareusedrocketstagecheaper?Moststudiesconductedonreusablelaunchsystemsfocusedonanengineeringanalysistodeterminewhetherreusingmostorpartsofrocketstagescouldreducethecostofaccesstospace.Mostanalysisconcludedthatunderacertainnumberofflightsperyear,thepricewouldnotdecreasesignificantly.Typically,50flightsperyeararequoted,estimatesranginguptomorethan100flightsperyearbeforereusablevehiclestarttogetanedgeoverexpendablevehicles(Parkinson,2016).Giventhataddressablemarketsarelimitedfora



singlelaunchprovider,andthatmostmarketsaregenerallycompeted,launchratesperformedbyasinglelaunchprovideraresignificantlyunderthisthreshold.Therefore,mostanalystsconcludethatreusablelaunchersdonotmakesensefromaneconomicperspective.ThiswastruefortheSpaceShuttle.Asmallnumberoforbitershavebeenbuilt:fiveintotal,forafleetoffouroperationalShuttles,asEndeavourwasbuiltaftertheaccidentofChallengerasareplacement.Thedevelopmentwasveryexpensive,andtherequiredperformanceandsafetymeasuresofhumanspaceflightcapabilityreducedtheoperationalcapacity.Forinstance,theShuttleswereintendedtolaunchmilitarysatellitesfromVandenbergAirForcebaseintopolarorbits,butneverachievedtherequiredperformance.DevelopingapartiallyreusablevehiclefromtraditionallaunchertechnologyisthewaySpaceXandBlueOriginchose.Thisapproachhasseveraladvantages:first,itallowslaunchoperationstoproceedbeforeperfectingreusability.SpaceXhadtogothroughseveraliterationsanddesignchangesbeforeperfectingthetechnologythatwouldallowthemtorecoverthefirststage.Theprimarymission,though,wasaccomplishedregardlessofsuccessfulrecovery.ThiswasnotthecasefortheSpaceShuttle,sincereusabilityoratleastrecoverabilityneededtobeperfectedbeforethefirstflight,tomakesureastronautscouldsafelycomebackfromorbit.Thesecondadvantagewiththenewapproachisthatthedesigncanevolvethroughthelifetimeofthevehicle.SpaceXismaintainingitsproductionlinesopen,whichallowsthemtoimprovetheirdesignincrementally:fromthefirstflightofFalcon9v1.0tothelastflightofFalcon9FT,payloadcapacitynearlydoubled,provingthatincrementalchangescanbeveryeffective,ifintroducingariskfactorhigherthanaerospaceindustrystandardsusuallyallow.TheSpaceShuttledesignbarelyevolvedthroughitsoperationallifetime:Endeavour,thelastorbiter,firstflewmorethantenyearsafterColumbia,andalthoughmoremodernbarelyincreasedpayloadcapacity.Shuttleproductionlineswereshutdownalmostimmediatelyaftertheyenteredoperations,andtheywerenevermeanttobe“cheap”vehicles.Quitetheopposite,therationalebehindtheSpaceShuttlewastobuildanexpensivepieceofequipmentonce,andamortizetheinitialcostovertheoperationallifetime.Thisistheprevailinglogicinairplaneindustry,butfailedtoconcretizeinthelaunchindustry.Thethirdadvantagewiththisapproachisthattheadditionalweightnecessarytorecovertherocketstageismainlycomposedoffuel,whichisinexpensive.TheSpaceShuttlehadasimilarifnothigherpayloadpenaltybecauseithadtolaunchanorbiterfittedwithwings,thermalprotectionsystemandlifesupportsystems.Itwasanextremelyversatilespacecraftbutaveryinefficientlauncher:Shuttle-C,astudiedexpendablecargoversionoftheShuttle,wouldhavebeenabletolaunchapproximately80tonstoLEO(GlobalSecurity,2017).TheSpaceShuttlecouldonlylaunchapayloadweightinglessthan25tons(CNN,1999).Thefourthadvantageisthatrocket-poweredretro-propulsivelandingschosenbySpaceXandBlueOriginarenotlimitedtoEarth’satmosphericlandings:indeed,rocketpowerworksunderanycondition,especiallyinspace.Thismeansthattheinvestmentmadeinpropulsivelandingsputsthosecompaniesattheforefrontforahypotheticalplannedlandingonanothercelestialbody:indeed,whenNASAchoosesthecontractorsforaprogram,itgenerallyfavoursthosewithexperienceintherequiredtechnology.Whetherforabigplanetaryprobe,amannedspacecraftorevenfortheirowncolonizationprojects,rocket-



poweredlandingsarenecessarytolandontheMoonoranycelestialbodywhoseatmosphereistoothinorinexistent,suchasMars.TheSpaceShuttlelandingcapabilitywaslimitedtoEarthwhereatmosphereandlandingrunwaysareavailable.Theoretically,rocket-poweredlanderscouldlandanywhereintheSolarSystem.14.3 Thecostsofrefurbishmentandreuse:avaluechainproblem14.3.1 ResearchanddevelopmentcostsThequestionofthevalueofarefurbishedfirststageiscomplex.Thevalueofarocketisdefinedbyseveralfactors,andismoreaccuratelydefinedasavaluechain.Inthischainarenumerousexpenseswhichreactdifferentlytoreusabilityattempts.Asanyindustrialgoods,thelifetimeofalauncherhasmanyphaseswithdifferentexpenses.Thefirstoneistheresearchanddevelopmentphase:thebasictechnologiesaredevelopedandthearchitectureofthelauncherisdefined,aswellastheproductionfacilitiesandoperationsmodalities.ThisisthephaseAriane6isin.Thisfirstphasehasafewdistinctiveelements:thelauncherisessentiallyonthedrawingboard,fewifnoelementsarebeingproducedandthecostoftheseprototypesisprohibitive.Mostofthetime,theprovidersformostofthefundingarenation-stateswithmilitaryorresearchbudgets,generallythroughaspaceagency.ThiswasthecasefortheSpaceShuttleortheArianerocket,spaceagenciescoveringthecostincurredbythedevelopment.Mostofthetime,theseexpensesareconsidered“sunkcosts”,meaningthattheywillnotbeamortizedbyoperationalactivities:nation-statesdonotrecovertheirinitialinvestment.InthecaseofSpaceXforinstance,mostoftheresearchatthebasisoftheFalconrocketwasconductedunderaNASAprogramcalledtheSpaceLaunchInitiative.Thisprogramwasintendedtodevelopseveralnewtechnologiesforaccesstospace,includingalow-costrocketenginecalledFastrac,whichbecamethebasisoftheMerlinengineusedonFalcon1and9.TheoriginalityoftheFastracenginewasitspintlefuelinjector,similartothoseusedonwaterhoses,andpreviouslyflownonthedescentstageoftheLunarModuleduringtheApolloprogram.Therefore,mostoftheresearchanddevelopmenthadbeenaccomplishedbyNASAwhenElonMuskadded$100millionsofhisownprivatecapitaltodeveloptheFalcon1rocket,buildinguponlegacytechnologies.ForAriane6,thewholecostiscoveredbyESA,whichconsidersthisinvestmentassunkcostsanddoesnotexpecttobereimbursed.14.3.2 ProductioncostsThethirdphaseistheproductionphase.Productionmeansmakingthelauncherbybuildingitsvariouscomponents,assemblingthemandintegratingthem.Thisprocesscanbeverydifferentdependingontheorganisationsresponsibleforit:usuallyindustrialpartnersmanufacturethelauncheraccordingtothespaceagency’srequirements.Thosespecificationscanbeextremelystringent,rigidandcomplex,leavingthecompanywithverylittlefreedom.Theamountofforcesenduredbylaunchers,theneedfornear-perfectreliabilityofeverycomponentandthethreatofcatastrophicfailureincurredbyanymismatchbetweentheplansandrealityjustifythisoversight.Spaceagenciesusedtobesterninquisitorwiththeirsuppliers.NASAduringtheSpaceShuttleandCNESforArianearegoodexamples.“Weusedtocross-checkeverything.Welookedatwhathappenedwithprimecontractors,butalsowithsub-contractors.Itworked



greatsonobodycontestedthisrole”(Bonnal,2016).Agencieswouldcontroleverycontractor’ssubcontractor,andsometimessub-subcontractortomakesureeachpieceofequipmentwasbuiltperfectlyaccordingtorequirements.Incertaincases,thismindsetischanging.Falcon9andAriane6aretwoprogramswhichfeatureamuchgreaterautonomyofindustrialactors.Usuallytheexpensesofindustryarecoveredbyspaceagencies,plusafixed-feetoallowforprofit.Nowadays,thetendencyistoissuefixedcostscontracts,toguaranteethatspaceagenciesbudgetsdonotincreaseoveracertainthreshold.Inreturn,spaceagenciestendtohavelesscontrolovertheproductionoflaunchers.Productionfacilitiesaredimensionedtoproduceasetnumberoflaunchers.Thismeansthatfactories,asinmanyindustries,cannotproduceoveracertainnumberoflaunchers,butalsolosemoneyiftheydonotproduceenough.Thereisacertainoptimumofproductionwhichisgenerallydecidedaftermarketanalysishasshownhowmanylaunchersperyearcanreasonablybeexpectedtobesold.Overthisthreshold,forinstanceifthedemandisfortenlaunchesandthefactorycanproducesevenperyear,theremainingthreecustomersmustchooseotherlaunchprovidersorwaituntilaslotbecomesavailable.Underthisthreshold,ifthedemandisforsixlaunchersandthefactorycanproduceseven,eitherproductioncapabilitiesstopbeingusedwhichincurscosts,orthepriceoflaunchisdrivendowntoattractnewcustomers,oftenboth.Inthecaseoflaunchsystems,thisfixedproductionrateisespeciallyrigid.Indeed,thesmallnumberofunitsproducedperyear,becauseofthelowdemand,allowsforverylittleflexibility.Inmostindustrieswheregoodsproducedarenumberedinhundredsorthousands,suchascars,thesamefactorycanbeusedtoproducealittlemoreincaseofasurgeindemand:increasingtheproductionby5or10%duringoneyear,atthecostofaddedhoursandmarginalcosts,ispossible.InthecaseofAriane5,evena10%increaseinproductionratedoesnotaddasinglelaunchertothemarket,becausetheproductionofAriane5hasbeenfixedtosixperyear.Therefore,whenArianegroupproducesonemoreAriane5peryear,theproductionratesgrowby15%,abigeffortwhichincursmanycosts.Thelowflexibilityofproductionfacilitiesisthemostimportantpointwhenconsideringreusability.Indeed,reusabilityisinterestingfromaproductionstandpointonlyifthecurrentproductionrateoflaunchersdoesnotsufficetosatisfythedemand,iftheproductionofnon-reusableelementsisflexibleandlow-cost,andifthereusabilityandrefurbishmentoperationscostsarelowerthanthemarginalcostofproducinganentirenewlauncher.Themostexpensivepartstoproduceareliquidrocketengines.Therestofthelauncherisalsoexpensive,butliquidrocketenginestypicallyrepresentmorethanhalfofproductioncosts.Rocketenginesarethereforethefocalpointduringthedefinitionofthelauncher’sarchitecture.Theirsize,number,performanceandchoiceoffuelallhaveanimportantimpactonalauncher’spayloadcapacity,costofproductionandcostofoperations.14.3.3 ImpactofreusabilitycostsontheproductionofAriane5Ariane5usestwoliquidrocketengines.TheVulcain2isahydrogen-oxygenfedenginewhichusesagasgeneratorcycle.Itpowersthecentralcoreofthelauncher.Thisunique



engineisveryefficientbecauseofthefuelchosen,hydrogen,whichcanprovidethehighestspecificimpulseamongthefuelsusedinrocketry.Theupperstageengine,theHM7B,usesthesametechnologiesbutitsproductionrequiresdifferenttoolsthantheVulcain2,becauseofsizeandweightdifferences.Ariane5alsolifts-offwiththehelpoftwobigsolid-fuelledboosters,whicharecheapertoproduce.Theseenginesaremuchbigger,moreperformantandmorecomplextoproducecomparedtotheVikingengineswhichpoweredAriane4.Thedevelopmentofabigcryogenicrocketengineisacomplicatedenterprisewhoserisksarenowunderstood:in2002,thesecondfailureofAriane5wasduetothebreakdownoftheVulcainengine.Thechoicetodevelopabigcryogenicenginewasmotivatedbyseveralfactors,mostlytechnicalsinceperformanceandefficiencywerekeydriversinthedefinitionofthenewAriane5.ThesimplicityofoperationswasalsoimportantsinceAriane5wouldhavebecomehuman-ratedtocarrytheHermesspaceplane.Notasmuchconsiderationhasbeengiventooptimizingproductionfacilities.Thenaturaltendencyoftechnicalorganisationstodevelopbetterandmorecomplextechnologyalsoseemstohaveplayedarole,sinceabigcryogenicengineismorecomplicatedtodevelopthanasimplerandsmallerhypergolicengine.Fromaproductionstandpointontheotherhand,abigcryogenicengineinducesimportantadditionalcostsandgreatlyreducestheflexibilityoftheproductionfacilities.Indeed,asmallnumberofthemisproducedeachyear,andeachonerequiresdedicatedtooling,intensivetestingandcarefulqualification.AsAriane5flieswithtwosatelliteson-boardandhousestwoverydifferentliquidengines,foreachsatellitelaunchedArianegroupmustproduceoneengine.Sinceproductionfacilitiesaredimensionedtoproduceasetnumberofengines,andthatthecostofbuilding6Vulcainenginesperyearisfixed,decreasingthenumberofenginesproducedincreasesthecostsofeachindividualengine:if6enginescost€60milliontoproduce,producing5engineswillnotcost€50millionbutcloseto€60million.Thismeansthecostofproducingasingleengineis€10milliononlyif6peryearareproduced:ifonly5enginesareproduced,theirindividualcostincreasesto€12million.ThisputsthelogicofreusabilityintoquestionforAriane5:indeed,thecurrentproposalbyAirbuscalledAdelinewouldnotmakesenseinaconstantdemandenvironment.InthecaseofAdeline,theideaistoreuseonlytheVulcainengine(oranyfirststageliquidengine).Insteadofbuilding6Vulcainengines,reusingonemeansthattheproductioncostoftheremainingengineswillincreaseasdemonstratedabove.Whatthisleadstoisaparadoxicalsituationwherethereusedenginebecomesmoreexpensivethanabrand-newengine,theoppositeoftheintendedgoal.Iflaunchdemandincreases,theneedtoproduceonemoreAriane5mayarise.ThisisonemoreArianethanproductionlineshavebeendimensionedfor.SincetheVulcainengineisthemostexpensiveparttoproduce,itmaybeinterestingtorecoveronefromapreviousflightusinganAdelineconfigurationforinstance.Inthissituation,anadditionalVulcainengineisavailableforanewflightandtheoptimalproductionrateof6peryearremains.Theproblemisnowtobuildanewlauncheraroundtherecoveredengine:forAriane5itmeanstwonewsolidrocketboosters,anewHM7Bsecondstageliquidengine,anew



secondstage,newpayloadfairings,newavionicssystemsandthethousandelementswhichconstitutethelauncher.Thepotentialproblemisthat,asfortheVulcainengine,theproductionlinesscatteredaroundEuropehavebeendimensionedtoproduceacertainnumberoftheelementsthatconstitutethelauncher.Therefore,ifforsomefacilitiesproducing15%moreelementsperyearposesnoproblem(valves,electronicsandothercommodities),otherpartsbecomemoredifficultandcostliertoproduceiftheproductionrateincreases:theHM7Bsecondstageengine,forinstance,isachallengingpieceofequipment.Thesecostsonlyincreaseasdemandincreases:building8Arianeperyearmeanstheproductionrateofallproductionlinesmustincreaseby25%.Thissituationisunsustainableforasupplychainthatwasnotdesignedtoaccomplishtheseobjectives.Confrontedtosuchasituationachoicemustbemade:eitherinvestinginnewproductionfacilities,whichisanextremelylongandcostlyprocess,ornotbuildingmorelauncherspassedacertaincostthreshold.Reusingrocketenginescouldthereforeservetoincreasethethreshold,butonlyuptoacertainpoint.ItisthereforetruethattheinterestofreusabilityinthecaseofAriane5or6seemslimitedfromaneconomicpointofview.Thearchitectureofthelauncherandthestructureofthesupplychaindoesnotfitamodelinwhichreusabilitywouldbeagainfortheproductioncompany,butaloss.

Figure5.Ariane6industrialorganisation,highlightingthespreadoffacilitiesaccrossEurope(ESA,2017)

14.3.4 ImpactofreusabilitycostsintheproductionofFalcon9AsforArianeandotherrockets,mostofthecostsofFalcon9residesintheproductionofliquidengines.Falcon9usesMerlinengines,kerosene-oxygenfedengineswhichuseagasgeneratorcycle.TheproductionofthisengineissimplerthantheVulcainengine,although



rocketenginesarealwaysexpensivepiecesofequipment.Theinterestingfeatureofthisengine,whenitcomestoreusability,stemsfromitsnecessaryhighrateofproduction.Indeed,Falcon9isfittedwith9enginesinthefirststageand1inthesecondstage.Itdoesnotuseside-boosters,andisnotcapableofdual-launchforheavycommunicationsatellites.ThismeanswhereArianegroupmustproduce1liquidenginepersatellite,SpaceXmustproduce10.Therefore,acrucialfeatureofSpaceXproductionlinesisthecapacityforthecompanytoproducerocketenginesataveryhighrate.Theproductionfacilitiesaredesignedtoproducefourhundredenginesperyear,accordingtomostspecialists.Asoftoday,itdoesnotappearthatSpaceXhasmanagedtoachievesuchaproductionrate.SincetheconstructionofthefacilityinHawthorne,LosAngeles,theproductioncapacitieshavebeenramping-up.Thecurrentproductionrateofenginesappearstobeinsufficient,whichcreatesasituationofundercapacity.TechnicaldifficultieshavealsoplaguedSpaceXschedules,andthecompanyisverylateinprovidinglaunchesatasufficientrateforitsclients.Thecurrentbacklogholdsmorethan70launches,andInmarsatselectedaslotonArianespacetolaunchoneofitssatellitesbecauseoflaunchdelays(Young,2016).Intheseconditions,reusabilitycouldhavearoletoplay.Indeed,productionratesarehighbutnotoptimalyet,demandforlaunchesishighandSpaceXfacesaproductionbottleneck.Reusingsomecorestagescouldfreeresources,focuseffortsonotherpartsoftheproductionlineandprovideagreaternumberoflauncheswhennecessary.Tothisend,theindustrialorganisationofthecompanyaswellasthearchitectureofthelaunchermattergreatly.SpaceXmanufacturingishousedinHawthorne,California,inasinglefactory.MostoftheactualmanufacturingofFalconlaunchersiscarriedoutonasinglefloor,aboveisthedesignbureauandabovearesalesandmarketing(Selding,2014b).Thistypeoforganisationiscalledverticalintegration,becausealltheworktodevelop,produceandsellthelaunchersisdoneatthesameplace.ThisorganisationstandsinsharpcontrastwiththeEuropeanorganisation,wheredozensoffactoriesscatteredacrossEuropemustworktogethertobuildanAriane5.14.3.5 StandardizationThisveryfocusedorganisationalsoallowsSpaceXtomoveemployeesbetweenproductionlinestoworkononetaskortheother.Engineerscannotworkonanythinganytime:thereisacertainamountoftrainingandexperiencewhichcomeswithlearninganewjob.ThisiswherethestandardisationofFalcon9playsarole:thesecondstageoftheFalcon9isaversionofthefirststagewhichusesthesametechnologies,toolingandengine.TherearedifferencesbetweenafirststageMerlin1DengineandasecondstageMerlinVacDengine,butbothenginesusethesamefuel,sametechnologiesandsameproductiontools.Thisisalsothecaseforfueltanks:indeed,productiontoolsusedtobuildfirststagefueltankscanbeusedtobuildsecondstagefueltanksastheyhavethesamediameter:inrocketry,thisisthemainparameterforusingthesameweldingtools.Combinedwiththefactthatemployeescanindifferentlybuildfirststagesorsecondstages,givesSpaceXflexibilityinitsproductioncapability.Thismeansthatreusability,inthisspecificcase,canbeusedtocompensateundercapacity.



ThisreasoninghighlightswhySpaceXlauncherarchitectureismoreadaptedtoreusability:itisadaptabletoproductionrequirementsandshiftsindemand.SuchshiftscouldnotbemetwiththeproductionorganisationofArianeorProtonforexample,sincetheelementsthatconstitutetheselaunchersareproducedonlineswhicharedimensionedforacertainrateofproduction:non-reusableelementsproductionratesarethereforeasfixedasreusableones.Falcon9elementsontheotherhandaremuchlessspecialized,andaproductionlinewhichbuildsfirststageenginesshouldbeabletobuildsecondstageengineswithoutchangingthetooling.Theonlywayreusabilitymakessensefromaproductionstandpointisthereforeifproductioncapabilitiesarebelowmarketdemandmostyears.Thisway,alaunchoperatorislessimpactedbypotentialshiftsindemandandcanprovideclientswithabetterservice,launchersbecomingmoreavailable.Therefore,havingflexibleproductioncapabilities,althoughpotentiallycostlyandsub-optimalfromalauncherarchitecturepointofview,allowsforanoptimalproductionrate,eveninafixed-demandenvironment.Alauncherarchitectureemployingmultiple-firststageenginesseemsparticularlyadaptedbecauseitprovideseconomiesofscaleinproductionofthemostvaluableelementoftherocket,eventhoughfewlaunchersareeventuallyproducedperyear.ThereflexionforArianeNextaswellasBlueOrigin’sNewGlennfollowthislogic:theselaunchersarebuiltaroundoptimalproductioncostsratherthanoptimalperformance.Theyfeaturemultipleenginesontheirfirststage,thesameuniqueengineonthesecondstageandthesamediameterforbothstages.14.3.6 RecoveryoperationscostTheimpactofreusabilityonlaunchoperationcostsdependsonthechosenconfigurationforreusability:ifthelauncherisentirelyexpendable,thosecostsfalltozero.ThisisthecaseforAriane5andotherexpendablelaunchers.ForSpaceXandBlueOriginmodels,twotypesofrecoverycanbeattemptedwhichincreasecostsbyacertainfactor.EitherthelauncherisbroughtbacktothegroundonalandingpadclosetotheLaunchpad.Inthiscase,costscomprisetheadditionalpropellantneededtoperformthemanoeuver,andtherentofthelandingpad.Thisisthemodelusedforsomelow-energyflightsofFalcon9andNewShepardoperations.Thefirststagecanalsolandonafloatingplatformouttosea.Inthiscase,costscompriseadditionalpropellantneededforthemanoeuver,whichisfewerthanthepreviouscase,andtherentoftheplatformanchorage,operationsandmaintenance.Recoverycostscanmostlybeconsideredfixed-costsandpartofthenormaloperationprocess.Fuelusedforrecoveryisonlyamarginalincreaseinfuelcosts,whicharealreadyverylow.AccordingtoTomMueller,ChiefOperatingOfficeratSpaceX,propellantcostsonlyrepresent0.5%ofthetotalcostofthelauncher,althoughitrepresents95%oftheweight(Mueller,2017).Thiswouldbeevenlesswithmethane,whichischeaperthantheRP-1usedintheFalcon9.Ariane5useshydrogen,whichismoreexpensivethankeroseneandmethane.Stillthecostofliquidpropellantisextremelylowcomparedtotheglobalpriceof



operations.Therentandmaintenanceoflandingpadsandlandingplatformsarealsoanaddedfixedcostcomparedtoregularoperations.Recoveryoperationscanbeexpensive,aswasthecasefortheSpaceShuttlesolid-boosterrecoverywhichrequiredtwoboatsanddivingteamsaswellasthedevelopmentofspecialequipment.ThelandingoftheShuttleorbiterwasalsoperformedonlongerlandingstripsthanusuallyavailableforcommercialairplanes,raisingconstructionandmaintenancecosts.Overall,evenwithaplannedraiseinfeesduetoconcernsbyauthoritiesatPortCanaveral(Gough,2016),thecostofrecoveryforfirststageslandingverticallyremainsverylowcomparedtootheraspectsoflauncherproductionandlaunchoperations.Similarly,potentialfuturelandingsofArianeNextwouldoccuronanareaoftheGuianaSpaceCenteralreadyownedandtendedforbyESA,previouslyusedtolaunchsoundingrockets.14.3.7 RefurbishmentcostRefurbishmentisthemainengineeringchallengewhenconsideringlauncherreusability.Thisoperationconsistsinmakingapreviouslyflownboosterflight-worthyagain.Itiscomparabletowhatairplanesoperatorscalloperationalmaintenance.Thecostofthisoperationalmaintenanceisunknown,althoughofficialannouncementsareregularlymadebythecompaniesperformingthoseoperations.Theonlyknownfactisthattomakeanyeconomicsense,recoveryandrefurbishmentoperationsmustcostlesstogetherthanthemarginalcostofproducinganadditionallauncher.Asdemonstrated,thereexistsanoptimallevelofproductionwhichdependsonthedimensionofthefacilities.Anyproductionaboveorunderthisthresholdisboundtocostmoretotheproductionfacility,tothepointofinvestinginnewproductioncapabilitiesifthedemandismuchoverthethreshold.Forinstance,ifdemandexistsfor10Ariane5flightsperyear,thecurrentproductionmodelisnotabletosupplyenoughlaunchers.Therefore,customerscouldchoosetowaituntilaslotinthemanifestisfree.Theycouldalsobuyaservicefromanotherlaunchprovider.Arianegroupcouldalsobuildanewfactory,hopingthedemandstillexistsonceitbecomesoperational.Similarly,refurbishmentoperationsbecomemoreexpensiveasthehardwareflies.OneofthebestexamplesistheSpaceShuttle,whose30yearsofoperationshaveseenrefurbishmentcostsriseasthehardwaregotolder.SincetheproductionoforbiterswasstoppedafterEndeavour,newhardwarenevercameonline,andoperationalmaintenancewastheonlyremainingcost.Nomajorimprovementonthebasicdesignwaspossible,andincrementalevolutionwaslimited.Anoperationalproblemspecifictospacelaunchhinderthecapacityforrapidandcheaprefurbishment:theamountofperformancerequiredfromarocketenginetoputpayloadinorbit.Rocketenginesareverypowerfulmachineswhichoperateatthelimitsoftheirdesignrequirement.Itistheonlywaytoachievethenecessaryperformancetoreachorbit.Theproblemisthatsuchoperationalconditionsquicklydegradetheengine,especiallywhentheyrunatveryhightemperatures.



Oneofthecriteriatobuildanenginewhichcanbereusedmultipletimesisthechoiceoffuel:indeed,asTomMullerputitinarecentinterview,“Weactuallypickedthewrongpropellant”(Mueller,2017).SpaceXusesRP-1,ahighly-refinedtypeofkerosenewhichburnsveryhotinarocketengine.Thisdegradestheenginequickly,especiallythefragileturbopumpswhichdevelopcracksintheirblades.Moreover,kerosenetendstocokewhichaddscoststorefurbishmentoperations.Sootisarealproblemindeedsinceittendstochoketheplumbingasitcoolsdown.Othertypesofpropellantincludinghydrogenareidealforreusablelaunchvehicles.Hydrogenwaslongconsideredthesoleplausiblecandidatetodevelopareusablevehicle:NASA’sX33projectwouldhaveusedhydrogen,theDC-XusedseveralRL-10enginespoweredwithhydrogenandcouldflyseveraltimeswithoutextensiverefurbishment.Morerecently,NewShepardisanexampleofalaunchvehiclecapableofreachingspaceonasuborbitaltrajectoryandflyseveraltimes.AccordingtoJeffBezos,thecostofrefurbishmentbetweenflightswasontheorderof$10000(Bezos,2017).Evenanorderofmagnitudehigher,thisnumberwouldstillbeverylowcomparedtothecostofproducinganadditionallauncher.Thisisduetothecryogenicnatureofhydrogen,whichimposeslessstressontheengine,especiallyontheturbinesoftheturbopumps.Forinstance,theRS-25ontheSpaceShuttleorbiterranonhydrogen.Itwasaveryhighperformanceengineusingastaged-combustioncycle,whichdoesnotdegradetheengine,thusmakingitreusable.Incomparison,theRD-180whichpowerstheAtlas5isalsoaveryhigh-performancestaged-combustionengine,butitrunsonkerosene.ThetemperaturesinthepreburneraresohightheywerethoughalmostimpossibletoachievebyAmericanengineers,andwereonlymadepossiblethroughacomplicatedoxygen-richpreburner.Thenewdirectiontakenbypromotersofreusablelaunchersistoturntomethaneastheprimaryfuel.Methanehasafewpropertiesthatmakeitparticularlysuitabletorunareusableengine:itiscryogenicanddoesnotcoke,removingthesootproblem.Itischeap,sinceitissimplyliquidnaturalgasforwhichanindustrialsupplychainalreadyexists.ItismoreefficientthanRP-1althoughnotaseasytostore,anditisdenserthanhydrogen,allowingforsmallerandsturdiertanks,whichalsoplayaroleinreusability.SpaceXiscurrentlydevelopingamethane-oxygenfull-flowstagedcombustionengine:TheRaptor.42ofthemaresupposedtoequipafutureaheavylaunchvehiclecurrentlyknownastheInterplanetaryTransportSystem,andpotentiallyafutureversionofaFalconlauncher(AirForce,2016).ThereasonsforSpaceXtoturntomethaneasthefuelfortheirnewlauncherarethesamementionedabove,butmethanecanalsobeeasilymanufacturedonMars,SpaceX’sultimatedestination.ThiswouldmeanbeingabletorefuelanInterplanetaryTransportSystemonMarstobringpeoplefromMarstoEarth,asinspiredbyRobertZubrin’svisionofin-situ-resource-utilizationinthesettlementofMars(Zubrin,ClarkeandWagner,2011).BlueOriginisdevelopingamethane-oxygensingle-shaftstagedcombustionengine:theBE-4.ThisengineissupposedtoequipthelauncherNewGlenn,7ofthemaretobeusedonthefirststageand1onthesecondstageforatotalof8enginesperflight.Additionally,although



thedecisionhasnotbeenmadeyet,itshouldlikelyequipULA’snewrocket,Vulcan.NewGlennshouldfeatureareusablefirststagesimilartoFalcon9,andULAmayattempttoreusetheenginewithatechniquecalledSmartReuse.ESAisdevelopingamethane-oxygenfuelledrocketenginecalledPrometheus.ItstartedasaCNESprojectcalledPromethée,andverylittleisknownabouttheengineitself,exceptthatitwilllikelyuseagas-generatorcycle.Oneimportantelementistheextensiveuseof3Dprintingforengineparts:thisaimsatreducingproductioncosts.PrometheusshouldequipthefutureArianeNext,whosefinalconfigurationisnotdecidedyet.Itisthereforelikelythatmostreusablelaunchersofthenextdecade,ifnotall,willusemethaneasaprimaryfuelasitdecreasesrefurbishmentcosts.MostillustrationsshowArianeNextequippedwithsevenPrometheusonareusablefirststage,anotherPrometheuspoweringthesecondstage.ThisdirectiontakenbyEuropetendstovalidatethepostulatethatproducingmanysimilarenginesratherthanspecializedonesmakessensetoreduceproductioncostsandfacilitaterefurbishmentandreuse.Iftheproductionstructureisfocusedonreusability,andifthecorrectchoicesinarchitecturearemade,itisprobablethatreusabilitycandecreaselaunchcosts.However,mostestimatesindicatethatthiscostreductionisnotofanorderofmagnitudeandwouldresultinacompetitiveadvantageforthelaunchoperatorratherthanaparadigmshiftinlaunchtechnology.Economiesinthe20%to30%rangehavebeenquoted,buttheoverallequationofrocketlaunchdoesnotfundamentallychange.Thisstateoffact,sometimescalledthe“tyrannyoftherocketequation”(NASA,2012)explainswhylaunchcostshavenotdecreasedmuchinthepastandareunlikelytodecreasebelowacertainthreshold:thedemandforspacelaunchisnotsufficienttosustainahighflightrateoflaunchvehicles.Thisisduetoseveralfactors,themostimportantofwhichisthestructureofthedownstreammarketofspaceapplications.14.3.8 FuturemarketstrategiesMostcommercialsatellitesareusedprimarilyforcommunicationpurposes,thebulkofthemarketconsistinginDTHtelevisionbroadcast.Accordingtomostexperts,thisisquiteadatedbusinesscase.DTHbroadcasthasbeendesignedasaone-waytypeofcommunication,theTVantennaactingasareceiver,ratherthanatwo-waycommunicationarchitecturesuchasInternet.AlthoughthemarketforDTHtelevisionisstillstrong,opportunitiesforanincreaseinthenumberofsatellitesappearfeeblesincesatellitesaregettingmorepowerfulastimegoesby:indeed,asinglecommunicationsatellitetodaycanbeaspowerfulasfivesatellitestenyearsago(ASD-Eurospace,2014).Therefore,despitetheincreaseincapacityofmodernsatellite,theirnumberdoesnotgrowaccordingly.Thestrategyofthetwomostimportantnewplayersinthelaunchindustry,SpaceXandBlueOrigin,issummarizedbytheidea“Ifyoulaunchittheywillcome”.Theprincipleisthatwhathindersthedevelopmentofspaceactivities,accordingtothem,isthehighcostofaccesstospace.Reducingthiscostbyatenfoldorahundredfoldwouldseeanewspaceindustry



flourishandnewapplicationsemerge,muchthesamewaythatthereductionincomputerpriceshavedriveneconomicgrowthintothedigitalage.Similarly,thereductioninspacelaunchcostsissupposedtodriveaneweconomicrevolution,whatspaceenthusiastssometimesrefertoasthe“spaceage”.Dependingontheunderlyingideology,thefinalstateofthespaceageincludesregularspaceflightstootherplanets,theconstructionofgiganticspacestationsandtheterraformingofMars,amongotherprojectsheavilyinspiredbysciencefiction.Theapproach,aswehaveseen,ismainlyacatch-22self-recurringproblem.Indeed,withoutnewspace-dependentcommercialapplications,reusinglaunchvehiclesdoesnotprovidetheflightratenecessarytosignificantlyreducethecostofspaceflight,butwithoutthisflightrate,itisunlikelysuchapplicationswouldemergeontheirown.Tobreakthecycle,thereisonepossibility:launchcompaniescreatingtheirowndemand.SpaceXhassetthegoaltosettletheplanetMarsto“makinghumansamultiplanetaryspecies”.SuchamissionwouldlikelyrequirefundingontheorderofmagnitudeoftheApolloprogramjustforthefirstmission,ifnotmore.ThisismoneywhichSpaceXcannotprocureonitsown.EitheragovernmentwillhavetopayforsuchamissionthroughNASA’sfundingforinstance,orSpaceXmustfindawaytogeneratealotmorerevenuethanitcurrentlycan.SpaceX’scurrentideaistodevelopitsownsatellitemanufacturingfacilitiestocreateaconstellationcapableofconnectingtheentireplanettotheinternet.Whatthisideaamountstoiscontinuingtheverticalintegrationofthevaluechainofspaceapplications.Indeed,SpaceXcurrentlydevelops,manufactures,sellsandlaunchesspacelaunchers.Thisconcentrationofactivitiesinasingleentityhasalreadybeenqualifiedasverticalintegration.However,thefinalproductsofspaceactivitiesarenotlaunchsystems,whicharemerelyameanstoanend:thefinalproductsarespaceapplications.Therefore,SpaceX’sownsatellitesconstellationmayprovidethemarketnecessaryforaflightratewhichwouldmakereusabilitycapableofsignificantlydecreasinglaunchcosts.Thisideaofintegratingthevaluechainofspaceapplicationsisnotanewone:attheendofthe1980s,OrbitalCorporationdevelopedalaunchsystemcalledPegasusXLspecificallywiththegoaloflaunchingtwoloworbitingsatelliteconstellations:OrbcommandOrbview.Consideringthelaunchvehiclespecificallyasacarrierfortheseconstellationsmeantitwasincludedinthebusinessplan,mostlyasaloss,tocompensateforthehighrevenueexpectedfromtheconstellationapplications.ThetelecomcrashledtothebankruptcyofOrbcomm,togetherwiththefamousvoice-basedIridiumandGlobalstar.Pegasusisnonethelessstillusedasasmalllauncher,mainlyforinstitutionalpayloadssuchaslow-orbitingsciencesatellites.SpaceX’sambitionstobecomeatthesametimealaunchprovider,aspacecraftmanufacturerandsatelliteoperator.ThelikelygoalfortheserevenuedriversistosecurefundingfortheResearch&DevelopmentforSpaceX’sMarsproject.



Figure6.SpaceX'sownexpectedrevenueprojections(WinklerandPasztor,2017)

BlueOrigin,ontheotherhand,hasadoptedadifferentstrategy.Thestatedgoalofthecompanyis“millionsofpeoplelivingandworkinginspace”,agoalresemblingtheideasoftheL5Society.Itisthereforeextremelylikelythat,despitetheawardofafirstlaunchcontracttoNewGlennbyEutelsat,aFrenchsatellitecompany,BlueOriginhasambitionsinthemoredemandingandbarelyexistingmarketforhumanspaceflight.Evenmorethannationalsecuritypayloads,humanspaceflightisthemostdemandinglaunchactivitytoday.BlueOriginisfocusedonbothmarkets:itwilllikelybuildthenewenginetopowerULA’sVulcanrocket,theBE-4.ThislaunchvehicleshouldremainthemainlauncherofUScriticalnationalsecuritysatellites,sincereliabilityisthefundamentaldriverofsuchlaunches.ThecapabilityofSpaceXtodemonstratethenecessaryreliabilityrequirementsisnotyetestablished,althoughFalcon9hasbeencertifiedtolaunchAirForcesatellites.Benefitingfromanalmostcertainoutletfortheirmainproduct,theBE-4,wouldallowBlueOrigintofocusontheotheraspectoftheirbusinessplan,thedevelopmentofhumanspaceflight.BlueOriginusedtobeaverydiscretecompany,whichhasattractedattentionsincethesuccessfulrecoveryoftheNewShepardboosterin2015,afewmonthsbeforeSpaceXachievedthesamefeatwiththefirststageofFalcon9.ContrarytoSpaceXwhichdevelopeditsboostersusingflight-provenandsimpletechnologiessuchasgas-generatorcycleenginesandpintleinjectors,BlueOriginhasdevelopedatap-offcycleenginerunningonhydrogenandliquidoxygen,theBE-3.Thetap-offcycleisacomplicatedtechnologysinceexhaustfromthecombustionchamberisusedtodrivetheturbinewhichpowersthefuelpumps,contrarytothemoreclassicgasgeneratorcycle,whichusesaseparatedpre-burner.TheBE-4engineisalsoacomplicatedengine,whichusesastaged-combustioncycle,anefficientcombustioncycledifficulttodevelop,andusesmethaneandliquidoxygenasfuels.



BlueOrigincanthereforebeconsideredasacompanydevelopingveryhigh-technologydevicesratherthanapurelycommercialone.ThecompanyseemstohaveadifferentfocusthanSpaceX,sinceittargetsveryhighvalueandhighreliabilitymarketsasnationalsecuritypayloadsandprobablyhumanspaceflightcapabilities.RatherthanSpaceX’sdisruptiveapproachandprogressiveupmarketmove,BlueOriginpositionsitselfdirectlyonthehighvaluemarketsofSpaceLaunch.AlthoughNewGlennismarketedasaregularlaunchvehicletocommercialoperators,BlueOrigin’sambitionsappearveryhigh.TheirfirstvehicleisnamedNewShepardafterthefirstAmericanastronauttobelaunchedonasuborbitaltrajectory,AlanShepard.TheirfuturevehicleisnamedNewGlenn,inreferencetoJohnGlenn,whobecamethefirstAmericantoorbittheEarth.JeffBezoshintedthatafterNewGlennwillcomeamorepowerfullauncher,NewArmstrong,withalikelyfocusonlunarexploration.BlueOrigin’sstrategy,albeitnotentirelyclearsincethecompanyhasretainedmuchofitssecretiveculture,isfocusedonhumanspaceflightasafutureeconomicdriver.WhilethisapproachseemstoechothemisguidedwaysthatledtothedisappointmentofthespaceShuttle,BlueOrigin’smethodsaremoreprudent.Theirmottoreads“gradatimferociter”,meaning“stepbystep,ferociously”.JeffBezosexplainedthattheapproachofthecompanyistobesteadyandslowintheirtechnologicaldevelopment,insteadofgoingtoofastwhichcouldresultinfailure,asisfrequentinaerospace.Manyhavepraisedthecultureofthiscompany:amixofcautionandsteadfastdevelopmentofnewtechnologies.AbigdifferencewithotheraerospacecompaniesisalsothatBlueOrigincancountonanextremelywealthysponsor,JeffBezos,whosenetworthiscurrentlyvaluedcloseto$90billion.ComparedtoElonMusk’s$16billion,BlueOriginappearstobeinapositionwhereitsfutureisnotdependentupontherevenueitgeneratesonitsownbutratheronthegenerosityofitsmainbenefactor.14.4 ReusabilityisadisruptiveinnovationRocketstagesreusabilityhasalltheattributesthatdefineadisruptivetechnology.Indeed,itisnotanewtechnology,sincerocket-poweredpropulsivelandingsandhypersonicprecisionguidancesystemswerebothdevelopedduringthe1960s,thefirstoneforthelandingoftheApolloLEMontheMoonandthesecondfortheguidanceofprecisionbombssuchasnuclearwarheadsaftertheiratmosphericre-entry.ThepintleinjectorthatequiptheMerlinengineswasdevelopedfortheLEMengines(Cherne,1967),thegridfintechnologythatequipFalcon9wasfirstusedonprecisionsovietmissilesinthe1970s(Scott,2006).Itisnotatechnologythattraditionalcustomersfindvaluableeither,sinceithinderstheattributesthatrenderlaunchsystemsattractivetothesecustomers,performanceandreliability.Itisatechnologythatmerelybenefitslaunchproviders,iftheirproductionfacilitiesareadaptedtobenefitfromthecostsadvantageofthetechnology.ThisappearstobethecaseforSpaceX,uptoacertainpoint,butitisnotforArianegroup.However,thistechnologyhasthepotentialofprovidinganewvaluetocustomers,withabetteravailabilityandflexibilityofthelaunchservicesthatleadtobetterconveniencefor



customers,sinceithasthepotentialtosignificantlyreducelaunchdelaysthatcurrentlyplaguetheindustry.ThisappearstobethelikelygoalofSpaceX’s24hoursturnaroundgoal(Etherington,2017).Thisconvenienceisthenextlogicalsteponapathleadingtoacommoditizationoflaunchservices.Accordingtothetheory,oncelaunchsystemsaresufficientlyperformant,sufficientlyreliableandsufficientlyavailable,onlythenwillpricebecomethemaindriverofthecompetition.Furthermore,reusabilityappearsasadisruptiveinnovationsinceitpasseswhatClayChristensendefinesasalitmustestforlow-enddisruptions(ChristensenandRaynor,2003):tothequestion“Aretherecustomersatthelowendofthemarketwhowouldbehappytopurchaseaproductwithless(butgoodenough)performanceiftheycouldgetitatalowerprice?”,theanswerisyessinceSESwasthefirstcustomertoacceptareusedrocketstageforthelaunchofSES10(Henry,2017).“Canwecreateabusinessmodelthatenablesustoearnattractiveprofitsatthediscountpricesrequiredtowinthebusinessoftheseoverservedcustomersatthelowend?”Thisanswerhereislessevidentbutseemstobeyes,sincethevalueoflauncheravailabilityandflexibilityisknowntobehighatthelowendofthemarket,andevenhigheratthehighend.“Istheinnovationdisruptivetoallofthesignificantincumbentfirmsintheindustry?Ifitappearstobesustainingtooneormoresignificantplayersintheindustry,thentheoddswillbestackedinthatfirm’sfavourandtheentrantisunlikelytowin.”Theanswertothisquestionisyes,becausealthoughincumbentfirmsareindeedplanningpartialrecoveriestoreducecosts,suchasULAandtheirplansofSMARTreusability(Dean,2017)orAirbusandtheAdelineproject(Meddah,2015),thesesolutionsdonotprovidetheaddedavailabilityofferedbystagelandingsandquickturnarounds.Thesesolutionsaresustaininginnovationsforincumbentfirmssincetheyaimatoptimizingtheircurrentproductionmodel.Rocketstagereusability,onthecontrary,wouldupsetthisproductionmodel.BlueOriginandSpaceXarebothnewentrantsinthisindustry,andcouldthereforeadapttheirproductionmodeltostagereusability.Rocketreusabilitythereforehasthepotentialtobeadisruptivetechnology.Itwouldnonethelessbeamistaketoautomaticallyassumethatitwillbecomeasuccessfultechnology,sincethedisruptivepotentialisonlyfulfilledifharnessedbyanentitysized,focusedandorganizedtotakeadvantageofthisdisruption.

15 ThepathforwardAfewthreatstoEuropeanAutonomousAccesstoSpacehavethereforedevelopedinarelativelyshorttime,andEuropeanactorswillhavetofacedifficultchoicesintheyearstocome.Severalactionscouldbetakentocountersomeofthetrendscurrentlyunfolding,butinonlyafewyears,Europeanlaunchsystemswillhavetofaceaverydifferentsituationfromtheonetheyenjoytoday.



Actionsandreformsshouldthereforebeengagedstartingfromthesimplesttothemostcomplexanddifficult.ThestatedgoalofsuchactionsistoretainanindustrialcapabilitytoproduceandlaunchrocketsfromEuropeanground,toavoidlosingthisstrategiccapabilityevenifcompetitionbecomesharshandmarketsharesareeroded.15.1 DisruptingthemarketofsmallsatelliteswithVegaThemarketofsmallsatelliteshassoaredforthelastfewyears.Mostanalystsagreethatthemarketisstrong,andseveralsmalllaunchsystemsarecurrentlybeingdeveloped(PriceWaterCooperhouse,2017).ClayMowry,formerpresidentofArianespace,Inc.,confirmstheinterestofanewsmalllaunchsystemfromaneconomicpointofview.“Thesesmallsatsarejustdyingforride,theycannotfindlaunchers”(Mowry,2017).Somesmallsatellitelaunchersarealreadydeveloped,andregularlyoperatingaroundtheworldtoday.TheseareformerUSSR’sICBMssuchasDnepr,operatedbyISCKosmotras,orRockot,operatedbyEurockot,ajoint-venturebetweenKhrunichevandEurockot,subsidiaryofArianegroup.Theseformernuclearmissilescanputone-and-a-halftonintoapolarorbit,butarenotmanufacturedanymoreandareprogressivelybeingphased-outasinventoriesdecrease.Furthermore,theirreliabilityispoorwithahighrateoffailure.IndiaoperatesthePolarSatelliteLaunchVehicle,orPSLV,avehiclecapableofputtingalittleoverone-and-a-halftonintoasun-synchronouspolarorbit.Itiscurrentlythemostsuccessfulsmallsatellitelauncher,withaveryreliabledesignataverylowcost.Fortheirownsmallinstitutionallaunches,theUnitedStatesuseseveralsmalllaunchsystems,includingforpayloadweighinglessthan500kgPegasusXLandMinotaurII,andforbiggerpayloadsMinotaurI,IV,VandVI,allmanufacturedbyOrbitalATK.Theselaunchersarereliablebuttheirprice,althoughnotpubliclydisclosed,isknowntorangefrom$40millionsto$55millionsperflight,whichinthecurrentmarketconditionsishigh.Furthermore,theselaunchersderivefrommilitarytechnologies,namelyAmericanICBMswhichpreventsthemfrombeingsoldonthecommercialmarket.Developingasmallsatellitelauncherisalongenterpriseandcannotitselfjustifytheexpense.However,EuropealreadyoperatesVega,averycapableandextremelyreliablesmallsatellitelauncher.OnascalecomparedtoAriane5,therevenuesgeneratedfromthesalesofVegaareofcoursemeagre.Smallsatellitesarecheaper,lesseffectiveandcommercialcompaniesoperatingthemusuallyhavealowerbuyingpowerthanestablishedplayers.ButthecharacteristicsthatmakethismarketunattractiveforanestablishedplayersuchasArianegrouparethosemakingitvaluabletonewplayers.Regularexpendablelaunchersarecurrentlybeingdeveloped:RocketLab’sElectronRocketlaunched(andfailed)forthefirsttimein2017,Firefly,Vector,PLDSpaceareallhopingtodevelopexpendablesmalllaunchsystems.Otheroriginalapproachesexist,withair-launchedsystems,similarinconcepttoPegasusXL,suchastheprojectsofVirginGalactic,GenerationOrbit,orStratolaunch.XCOR,acompanydevelopingasimilarconceptforseveralyears,filedforbankruptcyin2017.Finally,oneofthemostpeculiarconceptsisZerotoInfinity’ssmalllaunchsystem,suspendedfromaballoon.Allthoselaunchsystemstargetthelower-endofthesatellitemarket,whichislessfocusedonperformanceandreliabilitybutratheron



convenienceandlowprice,thelatterbeingthedefiningfactorregardingthechoiceofalauncher.AccordingtoClayMowry,fewofthosecompetitorswouldsurviveagainstanaggressively-marketedVega.“IftheyofferVegaatapricebelowareusedFalcon9,theycoulddominatethesmallsatellitelaunchmarket.TheyneedtoproduceandlaunchsevenoreightVegasayear,similartotheproductionofAriane5,notjustthethreeorfourVegastheybuildnow.Iftheyemployastandardcarryingstructureandinterface,manufacturerswoulddesigntoaVegaspecification.YoualsoneedregularlyscheduledVegaflightseverytwomonths,likewithAriane5,sothereisnodelay.ButEuropeisnotpursuingthissegmentaggressivelyenough.EuropeiscomfortablewithagovernmentdrivenbusinessmodelthatallowsPSLV,Soyuz,SpaceXandmicrolauncherstosplitthecommercialsmallsatellitemarket.”(Mowry,2017)EuropeisnotpursuingacommercialendeavourwithVegaforseveralreasons:thesupplychainisnotsetuptoprovideahighrateoflaunches,severalbottleneckshinderingtheavailabilityandcostofthislauncher,includingintegrationfacilitiesanditslaunchpad.However,comparedwiththehighinvestmentnecessarytocreatenewAriane6facilities,theinvestmentinVegawouldbeverylowandcouldgenerateafinancialreturninashorttime.Furthermore,VegahasthepotentialofbecomingthelauncherofchoiceforAmericansmallinstitutionallaunches.ThecurrentfamilyofICBMsderivedsmalllaunchersusedbyNASAandDODareinherentlylimitedbythemarkettheycanhopetotarget:becauseofexportrulesandconfidentialityofmilitarytechnologies,theycannotbeexportedorsoldtocommercialcustomers.ThisisanopportunityforVega:intermsofperformanceandreliability,itisonparwiththoselaunchersandfaresbetterregardingavailabilityandespeciallyprice.TheonlyobstacleistheruleofUSpreferenceforspacelaunches,whichmeansthatatleast50%ofthelaunchermustbeproducedintheUS.Thisisnotanimpossibletask:therearemanywayswhichcouldallowVegatobeatleast50%builtintheUS.RUAGSpacecouldbuildthefairingusingtheirfacilitiesinColorado,astheyalreadybuildVega’sfairingsinEurope.TheRD-843whichpowersVega’sAVUMupperstagecouldbereplacedbyaUSnativesolution,suchasavariantoftheAJ10.SolidfuelcouldbeprovidedbyOrbitalATK.AP120manufacturecouldbebuiltintheUSA.AlltheseideascouldallowVegatopassoverthethresholdof50%Americanmanufacture,tocompeteontheprofitableAmericaninstitutionalmarket.ThereasonstokeepVegaunderitspotentialappearnottobetechnicalorfinancial,butmanagerialandpolitic.Vega-C,thesuccessorandmorecapableversionofVega,hasbeendevelopedfortheexpresspurposeof“coveringidentifiedEuropeaninstitutionalusers’missionneeds,withnoincreaseinlaunchserviceandoperatingcosts”(ESA,2017)Farfromseeingitasacommerciallauncher,Vegaisthereforeconsideredapurelyinstitutionallauncherwhichwillbedevelopedcheaply.However,JérômeVilaofCNESbelievesthatVegaislikelytofaceatoughcompetitionwithIndianPSLVorRussianrocketsforcommerciallaunches,whilethisEuropeanlauncherstillsuffersfromhighproductioncosts(Vila,2017).



ThemanagementofacompanysuchasArianegroupfacesseveralnaturalhurdles.Oneofthemisnottopursuemarketswhichdonotmakeasmuchmoneyastheestablishedmarket,namelyAriane5’sGTOsatellitemarket.Pursuingasmallerandlessprofitablemarketisadecisionwhichdoesnotmakesensefromastrategicpointofview,andcouldevenbeconsideredasbadmanagementandwasteofresources.Nonetheless,asChristensenexplainsit,“Goodmanagementwasthemostpowerfulreasonthey(leadingfirms)failedtostayatoptheirindustries.Preciselybecausethesefirmslistenedtotheircustomers,investedaggressivelyinnewtechnologiesthatwouldprovidetheircustomersmoreandbetterproductsofthesorttheywanted,andbecausetheycarefullystudiedmarkettrendsandsystematicallyallocatedinvestmentcapitaltoinnovationsthatpromisedthebestreturns,theylosttheirpositionsofleadership.Whatthisimpliesatadeeperlevelisthatmanyofwhatarenowwidelyacceptedprinciplesofgoodmanagementare,infact,onlysituationallyappropriate.Therearetimesatwhichitisrightnottolistentocustomers,righttoinvestindevelopinglower-performanceproductsthatpromiselowermargins,andrighttoaggressivelypursuesmall,ratherthansubstantial,markets.”(Christensen,1997)15.2 ThePathtoEuropeanPreferenceThequestionofEuropeanpreferenceforspacelaunchesisnotarecentone,butnegotiationshavealwayshitaceilingregardingtheconstraintsthestates,ESAandtheEuropeanUnionhaveagreedtoimposeontheirchoiceoflauncher.AtLeBourgetAirShow2017,EuropeanGovernmentsdebatedovertheiragreementordisagreementsuponthenotionofspacelaunchasa“strategic”capability.Strategicisviewedinthissensebothasamilitaryprojectioncapacityand,moreimportantly,asthefreedomofactioninthespacedomain,especiallyregardingthelaunchofvaluablecommercialsatellites.SeveralactorstakingparttoapublicdiscussiondetailedhowtheyviewedtheissueofEuropeanpreferenceintheprocurementoflaunchsystems.TheyspecificallydebatedtheissueoftheBuyEuropeanLaunchersActcurrentlyunderreviewattheEuropeanCommission(Selding,2017).TheBuyEuropeanLaunchersAct,whichwouldtaketheformofafive-yearscontractgrantingArianegroup5institutionallaunchesonAriane6,aswellas2Vega-Claunches,isdeemednecessarybyArianegrouptoplanitsproductionfacilitiesaccordingtoacertainschedule(Selding,2017).Thecontractpassedwithinstitutionalactors,asenvisionedbyArianegroup,istheprovisionof5flightsofAriane6peryear,priced€70millionsperflightat2014economicconditions.Inexchange,Arianegroupacceptstopay€440millionsofitsowncapitalonthedevelopmentofAriane6,wheninstitutionalactorspayfortheremainderofthecost,€3,2billion.Lastly,theEGASsupportprogram,costingapproximately€100millionsperyear,shouldbeterminated.Theguaranteedpriceof€70millionseuroperAriane62canonlyremainguaranteedifallEuropeanactors,includingstates,theEuropeanUnion,theEuropeanSpaceAgencyandEUMETSAT,themeteorologicalEuropeanorganisation,agreetogiveaclearpreferencetoEuropeanlaunchers.ThefutureofsuchaBuyEuropeanLaunchersActisuncertain.Adefinitiveanswershouldbeprovidedin2018.Franceisresolutelyinfavourofthiscontract,andItalyhadbeenmorereluctantuntilthefundingforVegaCwasacted.TheoppositiontosuchanActisnotofficiallyexpressed,buttheEuropeanSpaceAgencyasksforassessmentsofcostandbenchmarks.TherepresentativefromEUMETSATalsostatedhissupportforaEuropean



independentaccesstospace,whiledownplayinganycommitmenttoAriane6untilthefirstflightsoccur.Indeed,reliabilityisakeyfactorforEUMETSAT,currentlyafaithfulcustomerofAriane5.Heinsistedonthecompetitiveaspectoflaunchsystems.TheEuropeanCommissionrepresentativeissuedacloselyresemblingstatement:“Itisdifficulttojustifythatwebuysomethingthatistwiceasexpensiveasanotherproduct.”Hespecificallyarguedforregular“competitivechecks”.RobertBattiston,thepresidentoftheItalianSpaceAgency,publiclyacknowledgedforthefirsttimetherealthreathoveringoverEuropeanlaunchers:“ThefactthatEuropeaninvestorshaveinvesteddoesnotautomaticallyallowthemtohaveaverycheaplaunchprice.Ifwedon’tsurvive,whattheyhavepaidforwilldisappear.”(Selding,2017)Thedisagreementsseemtoprogressivelywane,asconfirmedbyJérômeVila(Vila,2017).Europeanpartnersareslowlyconvergingtowardadecisionwhichshouldguaranteeacertainamountoflaunchesperyear,onamulti-yearbasis,similartotheUSAirForcepracticeoflauncherBlock-Buys.Inthenextdecade,EuropeanAccesstoSpacewillverylikelybeguaranteedbyanagreementbetweenindustryandinstitutionalpartners.Suchanagreementwouldnonethelessbeveryfragileandcouldbecalledintoquestionbyseveralunforeseeableevents.Forinstance,alaunchfailurewouldputtheentireagreementinjeopardy.Similarly,thenon-respectofagreed-uponpriceschargedbyArianegroup,whichcouldbeduetoindustrialoverheadsandvariouscost-increasesespeciallyintheearlyyearsofexploitationcouldthreatenedtheagreement.Areductionofthemarketshareofcommerciallaunches,thesuccessofcompetitorsandtheinadequacyofAriane62intermsofavailabilityforinstitutionalpayloadsaresomeofthethreatsfacingthecurrentsituationofEuropeanAccesstoSpace.“OneimportantthingisthatEuropeissupportingEuropeanindustry,andIthinkwearedriftingawayfromthis.I’mveryinterestedtomoveESAintothefuture,theshiftofparadigmmeansthatagencieswillbeenablersinthefuture,morethanjustagencies.IobservethatthenationalthinkingmayendangertheEuropeanspiritweallneed.TheBrexitdecision,youcandiscussthisatlength,isanexampleofthesedifficulties.Weareourownenemies.ESAhastheruleofgeo-returnprinciple.ThefoundingfathersofESAdecidedtohaveanoverallgeo-returnasaninstrumenttorealisenationalindustrialpolicywithinjointEuropeanspaceactivities.Nowforeachandeveryprogram,member-statesareaskingageo-returncoefficient.Attheendoftheday,thisdoesnotleadtoaEuropeanspaceagencybutrathertoamultinationalagency.”(Woerner,2016)ThecurrenttrendoflaunchsystemscommoditizationcouldalsocallintoquestiontheverynecessityforEuropetopossessanindependentaccesstospace,sincelong-timealliescouldprovidetheservicefreeofconstraints.Commoditizinglaunchsystemswouldhavetheeffectofweakeningtheperceptiontheyare“strategic”assets.Tosalvagethisstrategicaspect,theactormostinvolvedinthisperception,France,needstoconvincetheotherimportantactornotasmuchconvincedbythisaspect,Germany,thatlaunchsystemsareindeedstrategic.ConvincingGermanactorsofthestrategicimportanceofEuropeanlaunchersisacomplicatedenterprisesinceitwouldgoagainstahistorictrendofGermanydismissingtheimportanceofindependentaccess.Itisespeciallyvisibleinthemilitarydomain,whereFrancehasnoinfluenceontheprocurementoflaunches,contrarytoESAandtheEUwhereFrancemaintainsahistoricimportance:thelastlaunchesofGermanmilitarysatelliteshave



occurredfromBaikonuronaKosmos3Mlauncher,andthenextlauncheswillbeprovidedbySpaceXonaFalcon9.BuyinglaunchesfromAriane’sdirectcompetitoronmissionswhichbeararecognizedstrategicimportanceforGermanycanbeinterpretedasastatementofthelowimportanceofdomesticlaunchcapabilitiesforGermany(Cabirol,2017).Indeed,thecountryhasafairshareofindustryonitssoilthankstothe“fairreturn”policyofESA,butitisunclearuptowhichpointtheperceivedadvantagesofoperatingaEuropeanlauncheroutweighthedisadvantages.Thelikelyansweriscost,andifAriane6,oreventheendoflifeofAriane5provescostlyforGermany,thepoliticalsupportforautonomousaccessislikelytofade.ThissituationshowsthatcompetitionoccursnotonlywiththeUnitedStatesandcountriesoutsideEurope,butamongEuropeanpartners.Thiscompetitionisarealproblem,butmaycontaintheanswertosolvetheinefficienciesofthe“fairreturn”modelofproductionandbattlingnationalpriorities.Indeed,thefirstsolutionofanincreasedcommercialeffortonVegawouldbringlastingsupportofItalianstakeholdersinEuropeanAccesstoSpace.AsecondinitiativecouldgainsupportfromGermanybybringingtoEuropeacapabilityithaslongbeenmissing:AutonomousHumanAccesstoSpace.15.3 HumanAccesstoSpace,anenablerofEuropeancooperationAutonomousHumanAccesstoSpaceisthecapabilityofacountryoranassemblyofnationstolaunchhumansintospace,independentlyfromothernation’sapprovalorcapabilities.Inpractice,ittakestheformofthedevelopmentofhuman-ratedspacecraft,suchascapsulesorspaceplanes.ThiscapabilitywaspursuedbyEuropeonce,duringtheHermesprogram,whichwasabandonedin1992overtechnical,budgetaryandpoliticalconsiderations.Sincethennoseriousdevelopmentprogramhasbeenstarted,outofalackofagreementonthebasicneedofsuchacapabilityforEuropeannations.Europehasexperienceinhumanspaceflight,sinceitmaintainsanastronautcorpsandhasbeeninvolvedininternationalenterprises,suchastheSpaceShuttlewiththebuildingofSpacelab,MirwhichwasvisitedbyEuropeanastronauts,andtheInternationalSpaceStationwiththeColumbusmoduleandtheATVresupplyvehicle.Furthermost,someofthenecessarytechnologiestoachieveasuccessfulhumanmissionhavebeendevelopedovertheyears:TheAtmosphericReentryDemonstratorin1997successfullydemonstratedare-entryofaEuropean-madecapsule,aswellastheIXVin2015.EuropedevelopedEnvironmentalControlandLifeSupportSystemcapabilitiesforbothitsSpacelabandColumbuspressurizedmodules,aswellasthepressurizedmodulesoftheCygnusspacecraftproducedbyThalesAleniaSpace.DockingcapabilitiesandprecisecontrolsystemsarepresentontheATV,whichprovedtobeversatileenoughformostofitssystemstobeusedbyNASAastheservicemoduleoftheOrionspacecraft.HumanspaceflightisasmallportionofESA’sbudget,anditisputtogetherwithroboticexplorationinaccountingmeasurements.In2017,itconstitutes11%ofthebudget(ESA,2017).Europeanindustrytodayhasthetechnicalabilitytocreateanautonomoushumanspaceflightcapabilityifthenecessaryamountofresourcesisdedicatedtosuchagoal.Thelackofclearlyestablishedgoalhasbeenthemainshowstopperinthisregard.ConsideringthenewenvironmentinwhichEuropeanspaceindustrymustevolvecouldmodifythis



perception,giventhepoliticalandeconomicimpactofthedevelopmentofhumanspaceflight.Indeed,developingahumanspaceflightcapabilitycouldsolvemostoftheproblemscurrentlyfacedbythelaunchsectorinEurope.First,itwouldcreatetheimpetusforalong-termcooperationbetweenGermanyandFranceonlaunchsystems.ThereluctanceofGermanytoconsiderEuropeanlaunchsystemsasastrategiccapabilityhasbeenamainhindranceinpursuingalong-termpolicyoflauncherdevelopment.Enjoyingindustrialreturnsisnotasufficientmotivationtofullycooperateonaprogram,whichisperceivedinGermanyasmainlyaFrenchinitiativesustainedthroughaEuropeaneffort.ThecommercialsuccessofArianecontributedtoweakenthesecriticismsandtensions,whicharequicktoresurfaceassoonascompetitionandmarketforcesarethreateningtheeconomicequation.ThissituationresultsinapermanentnegotiationoverwhataretheprioritiesandtheextentofthestrategicimplicationsofEuropeanlaunchers.Forinstance,Germanyhashistoricallybeenmoreinvolvedinthefundingofhumanspaceflightinitiatives:in2013,50%oftheoverallEuropeancontributiontotheInternationalSpaceStationeffortwasfundedbyGermany(Selding,2013).AsexplainedbyGuilhemPenent,tacitagreementsbetweenGermanyandFrancealwaysmanagedtostrikeabalancebetweenthedevelopmentofFrenchlaunchersandGermanhumanspaceflightinitiatives(Penent,2014).Latelythough,thisbalancehasbeenputintoquestionbytheremovalofATVfromactiveserviceand,thesubsequentuseofitskeytechnologiesasaservicemoduleforOrion,amuchlowerambitionthanthedevelopmentofanentirenewvehicle.Thetacitagreementhasthereforenotbeenbroken,butitsextentseveredbyfewprospectsofcooperationinaninternationalcontextandtechnicalconsiderations.TheInternationalSpaceStationshouldindeedbedecommissionedbetween2024and2028,sothereisnotimetodevelopanadditionalcapabilityforthisproject,andtheATVtechnologiessuitedNASA’sneedsintermsofcontrolandpropulsionoftheOrioncapsule.Thisisnonethelessameagreprojectfromtheperspectiveofanambitioushumanspaceflightprogram(Selding,2012).DevelopingacapacityforEuropeantolaunchhumanstospacecouldpotentiallyrestoreGermansupportinEuropeanlaunchercapability,notsolelyconsideredacommoditybutasthevehicleofchoiceforEuropeanhumanaccesstospace.Thisisthesecondreasontodevelopthiscapability,asitwouldfightagainsttheprogressivecommoditizationoflaunchsystems,restoringthestatusofArianeasastrategicassetforeveryEuropeanstakeholder.Arianehasahistoryofhighcapacityandreliability,twocharacteristicsprogressivelyattainedbyforeigncompetitors,whichwilllikelybecomemoreavailableaswellaslessexpensive,thankstoproductionoptimizationandreusability.ThisistheclassicpathtocommoditizationidentifiedbyClayChristensen(Christensen,1997).TheentirecompanycultureofSpaceXrevolvesaroundtheideaofcost-reductionandhighlaunchrates,whenthecultureofArianegrouprevolvesaroundtheideaofreliabilityeverylaunch.WhatmakesArianegroupill-preparedtoconfrontahighlycompetitiveenvironmentcouldbeitsveryadvantageregardinghumanspaceflight.Indeed,humanspaceflightoperationsarethemostdemandingmarketsegmentforlaunchsystems,sincefailureisnotanoption:thebacklashwhichfollowedtheaccidentsofChallengerandColumbialedtotherestructuringofNASA’shumanspaceflightorganization,andhadalastingimpacton



Americanspacepolicy.ThesameriskaversionshouldbeexpectedforNASA’scommercialcrewcontractcontenders,SpaceXwithDragon2andBoeingwithCST-100Starliner.NASA’soversightoftheseprogramsismuchmorestringentthanfortheCRSprogram,asshouldbeexpectedfromtheorganizationultimatelyresponsibleforthesurvivaloftheastronauts.SuchanoversightcouldhindertheflexibilityofSpaceXinparticular,andtriggerseveralorganizationalchanges.OneadvantageofArianegroupoverSpaceXisitalreadyfunctionsclosetothenecessaryrequirementsofhumanspaceflightcapabilities.Pushingforsafetyandmoreoversightfordecidingagencieswouldnotimpactdailycompanyoperations,sincethisoversightandaccountabilitymeasuresarealreadyinplace.Furthermost,thecurrentAriane5systemwasinitiallysupposedtobecomehuman-rated,whichhadaninfluenceoverhowthecompanyoperatestoday.UsingArianeforhumanspaceflightcapabilitieswouldrestoreitsstatusofaninnovativespaceprogram,ratherthanthecurrentdirectionwhichaimsatrestoringthestatusquowhichprevailedinthe1990s.Simplytryingtoimitatecompetitorstoretainmarketsharedoesnotconstitutearealspaceprogram,butismerelyacompetitionbetweentwoindustrialmodels.Aspaceprogram,asanyresearchanddevelopmenteffort,representsaninvestmentinthefuturewhichisnotexpectedtogenerateashort-termreturnoninvestment;however,thisistheparadoxicalsituationArianefindsitselfin.Thespaceprogramhasbeenfuelledwithpoliticaldisagreementsovernewinvestments:developingahumanspaceflightcapabilitywouldbeawaytosolvethesedisagreementsandrestoringthelong-termvisionsupposedtopertainthespacelaunchdevelopmentprogram.IfEuropeanactorswishtodevelopsuchaprogram,theyshoulddecidetodosoverysoon.Indeed,severalpositivefactorstoinfluenceaEuropeandecisionareconverging:asdiscussed,thecurrentstateofthelaunchindustryinEuropeisonemotivation.ThesecondfactoristheplannedendoftheISSinthenextdecade:thestateofthehumanspaceflightcapabilitiesofallieswilllikelydeterminethedirectionofthenextcooperativeprogram,aswellastheirrespectiveparticipationaccordingtothesecapabilities.Adecadeisbarelyenoughtodevelopabasiccapsuleinabudgetconstrainedenvironment.Thethirdfactoristhecurrentstateofmindinthecountryhistoricallyopposedtohumanspaceflight,France.ThepoliticalleadershiphasbeenrenewedingreatfashionsincetheelectionofPresidentEmmanuelMacron.Thismayrepresentanopportunitytopursuenewinitiativesinspace.Additionally,theflightofFrenchastronautThomasPesquetin2016hasmadeagreatimpressionupontheFrenchpublic,whichhassincemoderatedharshjudgementsusuallymadeabouthumanspaceflight.Thefourthreasontodevelopahumanspaceflightcapabilitywouldbeadeeprationalizationofthegeo-returnpolicy.Indeed,Frenchindustrialactorslonglamentedthelackofeconomicpragmatismimposedbyprocurementrulesandfairreturnobligations.Agreementstodevelopsuchacapabilitycouldbemadeinexchangeofamorepragmaticexchangeofindustrialreturn:forinstance,mostofthelaunchermanufacturingfacilitiescouldbeconcentratedinFranceandItaly,whilemostofhumanspacecraftfacilitiescouldbebuiltinGermanyinaccordancetoanewinterpretationofgeo-returnrules.



Arguingthatthedevelopmentofahumanspaceflightcouldguaranteethelong-termsustainabilityofaspacelaunchsectorinEuropeisimportant,butthiscircumstantialopportunityisnotsufficienttojustifythegreatexpensesandrisksassociatedwiththedevelopmentofsuchacapability.Inthisregard,itisnecessarytoquestionthetruepurposeofahumanspaceflightcapabilityinthe21stcentury.15.3.1 EuropeanHumanAccesstoSpaceasaninstrumentofintegrationanddiplomacyThemainprobleminthedevelopmentofaEuropeanhumanspaceflightcapabilityisthelackofacleargoalforsuchacapability:spaceactivitieshavebeenhistoricallydevelopedtobeusefultoEuropeancitizens.Humanspaceflightfillsnoidentifiedgapinpublicservice,andappearsasasolutionwithoutaproblem.Whenreferringtotherationaleofhumanspaceflight,severalapproachesarepossible.Oneistheclassicapproachofspaceenthusiasts,suchastheMarsSocietyorevenElonMusk.Spaceenthusiasts,alsosometimescalled“spacecadets”shareapropensitytodefendhumanspaceflightinthefaceofallopposition.TherationaleforsuchanenthusiasmhasbeenattributedbyRogerDLauniustoafaithmuchakintoareligiousphenomenon(Launius,2013).SpaceadvocacyisanalmostexclusivelyAmericanphenomenon,thefewbranchesspreadingabroadremaininglargelyconfidentialandbasedonthesamepremises.L’AssociationPlanèteMarsinFrance,forinstance,isasimpleoffshootoftheAmericanMarsSociety.SpaceenthusiasmispowerfulinAmericasinceitisverydeeplyrootedinAmericanmythology.Themythofthefrontier,usedbyJohnF.KennedytolegitimatetheApolloprogram,andtheideologyofmanifestdestinyareverypowerfultoolswhichperfectlyfitthenarrativeofthedevelopmentofahumanspaceflightcapability.MuchoftheenthusiasmsurroundingSpaceXprojectsislinkedtothecapacityElonMuskhashadtoembracethesemodernmythsandbuildacoalitionofspaceenthusiastsaroundhishumanspaceflightenterprises,especiallythecolonizationofMars,along-lastingdreamofearlyspaceflightadvocatessuchasWernhervonBraun.Similarly,spaceadvocacyisrootedinwhathasbeendescribedasastrofuturism(Kilgore,2003),afantasizedutopicvisionofthelifeofhumankindinouterspaceandathemeheavilyleveragedbySpaceX.Spacecolonizationisoftenassociatedwiththeintellectualmovementknownastranshumanism.ElonMuskisknowntoadheretosomeoftheideasdefendedbythismovement,veryinfluentialinCaliforniaandespeciallyinSiliconValley(Clark,2017).Initscommunication,ElonMuskmarketsanidealvisionofhumanexplorationofspace,inacontrolledmannerobeyingthecodesofmodernmarketingtechniques.ThedevelopmentofSpaceXboosterlandingcapabilitieshasfascinatedthespaceworldbeyondanyeconomicrationale.SpaceXisthetrendytopicinspaceexplorationtoday,evenamongspaceprofessionals:in2015,9outofthe15most-readstoriesofspecializedonlinemagazineSpaceNewsfeaturedSpaceXintheirtitle(Berger,2016).AsSergeBrouardsaid,“Nomatterwhatthepayloadisaslongasthemiracleofthelaunchoccurs(translatedfromFrench)”(Penent,2014).Thisirrationalmindsetregardingspaceactivities,muchsimilartothe



businessplanofentertainmentcompanies,isapowerfultoolandleveragecapacityforSpaceX(Day,2016).ThisisaleveragewhichdoesnotexistinEurope,ortoamuchlesserextent.AsanalysedbyGuilhemPenent,thenecessityofinvestinginspaceexplorationisnotawidely-sharedpriorityforEuropeancitizens(Penent,2014).TheEuropeanidentity,inadditiontobeingafluidconceptregularlyputintoquestion,cannotbaseitsrationaleforthedevelopmentofahumanspaceflightcapabilityonasocialmythaspowerfulastheAmericanfrontierandmanifestdestiny.Themerenotionof“colonizationofspace”doesnothavethesameperceptiononbothsidesoftheAtlantic,Europestillbeingpainfullyawareofitscolonialhistory.Furthermore,newculturaltrendssuchasecologyandanti-growthmovementputintoquestionthemerenarrativeofprogressthroughhumanity’sexpansioninspace.Inmanyregards,humanspaceflightappearsasavainandoutdateddream.Anotherpotentialrationaletohumanspaceflightispurelyeconomic.Overtime,severalstudieshavebeenpublishedwhichseemtopointtowardtheexistenceofapotentialspacetourismmarket.Todate,sevenspacetouristshaveflowneightorbitalflightstotheInternationalSpaceStation,procuredbytheRussianSpaceAgency.Nowadays,thoseflightsmarketedbytheAmericancompanySpaceAdventuresarenotavailablebecauseoftheuseofSoyuzinNASAandRoscosmosoperationsoftheInternationalSpaceStation,butmayresumewhenDragon2orCST-100flyregularly.SpaceXrecentlyannouncedhavingsoldtwoticketsfortouriststoflyaroundtheMoononaDragon2spacecraftpropelledbyaFalconHeavyrocket.Unfortunately,thisapproachseemsill-fittedtoaEuropeanperspective.Indeed,muchthesamewayaslaunchsystems,manyorbitalspacecraftsshouldbegintoflyregularlyby2020.Dragon2,CST-100,Shenzhou,SoyuzandOrionareallstatedtoenteroperationswithinthenextdecade.Aneworbitalsystemwouldprobablyhavedifficultiesenteringamarketfacedwithoversupply.Furthermore,thereisabsolutelynoguaranteethatamarketreallyexists.Theonlyidentifiedsubstantialmarketwhichcouldpotentiallysupportasuccessfulcommercialenterpriseintheyearstocomeisthesuborbitaltourismmarket(Futron,2002).ThissatisfiesnoneoftherequirementsofaEuropeanhumanaccesstospace,sincethesystemsnecessaryforasuborbitaltriparemuchsmallerthanwhatisnecessarytoachieveorbit.Liketheorbitalmarket,thereisnocertaintyastotherealityofthemarketsincenosuborbitaltouristeverflew,andbasinganexpensivepublic-ledtechnologicaldevelopmentonsuchanuncertainpremisewouldbeabaddecision.SuchanapproachwouldonlybeapalecopyofthemajorEuropeaninnovationthatallowedalaunchsectortosuccessfullyemergeduringthe1980s:thenotionoflaunch“service”.Thedevelopmentofahumanspaceflightcapabilityshouldthereforebebasedonaninnovation,similarinspiritbutnotineffect.Thethirdapproachmaythereforebethecorrectone.ConsideringhumanspaceflightasadiplomatictoolcouldbethewayforwardforEurope.Humanspaceflightisalreadyconsideredassuchbythepoliticalleadership,althoughitisnotofficiallyadmitted:inESA’sbudgetforinstance,humanspaceflightisnotascientific



program,whichwouldrenderitmandatory:itisanoptionalprogramlinkedtotheroboticexplorationofMars.ScientificmissionsofEuropeanastronautsaremanagedbyESA,butcommunicationcampaignsfocusontheircountryoforigin,whichreducestheEuropeanefforttoaprestigeinstrumentfornationalgovernments.Althoughvaluable,reinforcingnationalprestigethroughacommonEuropeaneffortisnotscalableandsucheffortsarerapidlyfacedwiththelawofdiminishingreturn:launchingmoreastronautsinashortperiodoftimeleadstopublicwearinessandboredom,asepitomizedbythestunningimpactofApollo11andthelackofattentiontosubsequentmissions.PrestigeisatrapEuropemustavoidwhendevisingastrategyforahumanspaceflightcapability(Johnson-FreeseandHandberg,1994).Ontheotherhand,analysinghistoryrevealsthetrendininternationalrelationswhichpromptedtheadoptionofhumanspaceflightpolicies.TheintensecompetitionofthefiftiesandsixtieswasthebasisfortheSpaceRacethatledAmericanstowalkontheMoon.TheperiodofDétenteledtothecooperationoftheApollo-SoyuzTestProjectin1975.FreedomSpaceStationwasaUS-ledprojectduringaperiodofrenewedtensionswiththeUSSR,associatingEuropeandJapan,long-lastingCold-warallies.TheUSSRdevelopedMirandBuranindependentlytodemonstratetheirtechnologicalsuperiorityandacapacitytocompetewiththeAmericanendeavour.TheendoftheColdWarstartedaneraofrenewedcooperationwiththeMir-ShuttleprojectandtheInternationalSpaceStation.Today’srenewedtensionsbetweenspacefaringpowershaveledtheUSAtodevelop,almostentirelyindependently,thecapabilitiestolaunchastronautstotheMoonandbeyond.Russia’splansareuncertain,butrumoursarespreadingofadepartureoftheRussianmodulesfromtheInternationalSpaceStationby2024,tocreateanindependentRussianspacestation.Meanwhile,athirdnationcapableoflaunchinghumansintospace,China,developeditsownspacestationandhumanaccesscapabilities.Consideringhumanspaceflightcapabilitiesfromtheperspectiveofinternationalrelationshighlightsadistinctivecharacteristicoftheseprograms:theyalwaysfollowedadiplomaticdecisionandneverprecededit.Thereisthusaclearcausalitylinkbetweendiplomaticdecisionsleadingtoaninternationalbehaviourandtheinfluenceofthisbehaviouronhumanspaceflightpolicies.Forinstance,DonaldTrump’s“MakeAmericaGreatAgain”coupledwiththetensedstateofaffairsbetweentheUSA,RussiaandChinamayleadinthenextfewyearstoadecisiontriggeringalargelyindependentAmericanefforttogobacktotheMoonoreventoMars,whichwouldrenderinternationalcooperationdifficultorevenimpossibleforseveralcountriesunabletomeetthetechnicalrequirementsofsuchdemandingmissions.Aninnovationwouldthereforeconsistinreversingthecausalitylink:usinghumanspaceflightnotasatoolofacknowledgementofadiplomaticposition,butratherasanenablerofdiplomaticandcommercialrelationsandasatensionreliever.Ifwaristhecontinuationofpoliticsbyothermeans,thenhumanspaceflightcouldbecomethecontinuationofpeacebyothermeans.Suchaninnovationwouldmeettwoobjectives:aninward-lookingpolicyofEuropeanintegrationandanoutward-lookingpolicyofstrengtheningEurope’sinfluenceandinterestsintheworld.



AhumanspaceflightcapabilitycouldindeedserveasavectorofEuropeanintegration.Politicalintegrationhasbeenthetopicofrecentdebatesandtensionsontheinternationalscene,Brexitbeingthemostblatantexample.PublicopinionsaregrowingincreasinglydefiantofEuropeaninstitutions,andsomearetemptedtoreclaimaperceivedlossofsovereigntyoverincreasinglypowerfulsupranationalentities.Humanspaceflightcannotsolvealltheseproblems,ofcourse,butcouldservetoincarnatelong-lastingEuropeanvaluesbeyondshort-termpoliticdecisions.Thosevaluesofpeace,humanism,cooperation,educationandprogressarewidelysharedthroughoutEuropeandspaceflightcouldbecomethevisibletestimonyofthewilltopursuethosevaluesbeyondtemporarydisagreements.AquoteattributedtoAlbertEinsteinsays,“noteverythingthatcountscanbecounted”.ThebenefitsofaninspiringprogramonEuropeanrelations,muchlikethebenefitsbroughtbyaneducationprogramsuchasErasmus,cannotbecounteddespitetheirlastingimpact.ThediplomaticrelationsoutsideEuropeshouldbemuchmorepragmaticandbasedontheimmediateneedsofEuropeanpartners.AhumanspaceflightcapabilitycouldbeoperatednotsolelyasaEuropeanprogram,butonethatwouldconsiderthespecificitiesofintergovernmentalneedsandofeachcountry’sdiplomaticapproach.Itcouldbeatooltostrengthenalready-establishedlong-lastingrelationswithforeigncountries,alsoactingasadeterrenttobreakestablishedbonds.Suchacapabilitycouldalsobeusedforshort-termoperations:forinstance,participationtoaflightcouldbecomeanincentiveinthenegotiationsofaninternationalcommercialbid.ThisuseofhumanspaceflightcouldresemblethemarketingtechniquesappliedduringtheSpaceShuttleera,whichdidnotlastlongenoughfortheirefficiencytobeevaluated.ThedevelopmentofsuchasystemcouldbeundertakenattheEuropeanlevel,butthecostofflighthardwareandoperationssupportedbytheusers,namelyEuropeancountrieswithadiplomaticpurpose.Thiscouldallowthecostoftheservicetoremainreasonablylow.ThemaindifficultyfacingsuchasystemcouldbeFrenchreticencetoundertakesuchariskyenterprise.OnemeasurethatcouldconvinceFrancetoparticipateistheEuropeanizationoftheKourouspaceport,whichwouldmeanagreaterinvestmentfromEuropeanUnionpartnersintheinfrastructureofthespaceport.InthecurrentbudgetaryconstrainedenvironmentofFrance,tradingsuchashort-termnecessityagainstalonger-termcommitmentinahumanspaceflightdevelopmentprogramcouldbeviewedfavourably.

16 ConclusionSincetheirinception,Europeanlaunchershavefacedfiercecompetitionwithouteverbenefitingfromalevelplayingfield.TheperformanceandreliabilityofArianehasallowedEuropeantobenefitfromautonomousaccesstospace,andtohelpothercountriestodeveloptheirownspacecapabilities.Europeinventedcommerciallaunchservicesandestablishedtherulesregulatingthem.ThecurrentwaveofcompetitionhashoweverputthisframeworkunderpressureandforcedEuropeanactorstoreact.TheunforeseencompetitionfromSpaceXhasledtoa



hastenrestructuringofthegovernanceoflaunchsystems,leadingtomorecontrolofindustrialactors.TheconsensusonAriane6‘spricereductionandlauncherpreferenceappearsnonethelessveryfragileandlikelytobecalledintoquestionshouldtechnicaldifficultiesarise.SpaceXhastodayemergedastheleaderofdisruptivemovementabletochallengemarketincumbentsbyincrementallyimprovingtheperformanceofitslaunchvehiclesandquicklyconqueringmoredemandingmarketsegments.Thecompanyiscurrentlydevelopingatechnologyoffirststagereusability,whichhasthepotentialtomovethefocusoftheircustomerslessontraditionallauncherindustry’smeasuresofperformancesuchaspayloadcapacityandreliability,butratherontheconvenienceofthelaunchservice,andpotentiallyonitsprice.Thisevolutionispartofamoregeneraltrendtowardlaunchservicecommoditization,whichputsintoquestionthemererationaleforanautonomousEuropeanaccesstospace.ThiscompetitivesituationraisedtensionsamongEuropeanpartnersandrevealsdiscrepanciesintheperceptionofthevalueofautonomousaccesstospaceforEurope.Themainchallengethereforeappearstobetoreconcilethethreemainpartners,France,GermanyandItalyonacommonpositionontheneedoflaunchsystemsinEurope.Indeed,technicalsolutionssuchasAriane6,Europeanpreferenceorareformofthegeo-returnpolicywouldonlyserveastemporarymeasures,whichdonotsolvetheunderlyingissue:thelackofunanimouspoliticalsupportofEuropeanautonomousaccesstospace.Tosolvethisdivergence,thisworkputsforwardtworecommendations:thefirstoneconsistsinusingVegaatitsfullpotentialasacommerciallaunchsystem,aswellasallocatingresourcestotryandentertheAmericanmarketofsmallinstitutionallauncheswhichwouldbenefitfromVega’sreliability.Thiswouldhavetheadvantageofofferingalikelyreturnoninvestment,butmoreimportantlytogainthesupportfromItalyonlauncherdevelopmentpolicybyusingthismainlyItalian-ledprojecttodisruptthesmall-satellitelaunchmarket.ThesecondrecommendationconsistsingainingthesupportfromGermanyonlaunchsystemsbycommittingEuropetodevelopanautonomoushumanspaceflightcapability.Thisrecommendationcouldhavethepotentialofrationalizingtheorganizationofindustrialgeo-returnpolicy,allowinggeographicconcentrationofproductioncapabilities.Itwouldalsohavetheeffectofspreadingtheperceptionoflaunchersasstrategicassets.Anautonomoushumanspaceflightcapabilitycannotbedevelopedongroundssimilartopreviousspacepowers,suchasprestigeandnationalpride.ItshouldthereforebenefitEuropeancitizensbyprovidingapowerfuldiplomatictooltoEuropeangovernments.SuchaninnovationcouldopennewopportunitiesandwouldcreatearesolutepathforEuropeanspaceambitionstocontinuebuildingthefuture.



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