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Aviation History
1981
1981 - 0581.PDF
FLIGHT International, 7 Aiorcri 1981 623 Arianespace outlines marketing policy ARIANESPACE, the organisation set up to handle the marketing and operational launches of Europe's Ariane, has revealed further details of its pricing policy, reports David Velupillai from Evry near Paris. The company has always had a policy of favouring customers which are not members of the European Space Agency (ESA), but has not previously spelt out the terms. At first glance, it seems unfair that countries which have invested money in developing Ariane should have to pay more for launches in the early .years (see table below). But ESA and Arianespace say that they have to compete with the launch cost of Nasa's Atlas-Centaur, Thor-Delta and Space Shuttle if they are to succeed in the export market. It is important that Ariane is sold abroad, because development and manufacturing costs can then be spread over many more craft. Arianespace has had the freedom to set Ariane launch prices for non- ESA customers at whatever level it likes since its formation in March last year—with the proviso that it remains self-financing in the long term. The company's differential- pricing is valid for orders up to mid 1983, and launches by mid 1986. After that Arianespace may adopt a uniform policy, but it will depend on the increase in Shuttle launch costs after the first three years of service. Arianespace's original working capi tal was Frl20 million (£13 million), but the financing arrangements made a total of Frl79 million available through a participating loan. Much of the capital is invested in long-lead parts for future Arianes—Ariane space concluded an order for the second production batch of four craft in autumn last year. A further five Arianes are due to be ordered before the summer, which will make a total of 19 craft to date. Firm customers typically pay for their Arianes during the three years before launch through progress pay ments, which allow production to be financed without Arianespace running into cash-flow shortages. Arianespace expects its expenditure and progress payments to reach a steady state by June this year, provided that the third Ariane flight is a success. Before a customer commits itself to an Ariane launch, it has the choice of making a reservation or an option for a particular slot. To make a reserva tion the customer pays a non-return able deposit of $100,000 which goes toward launch cost. If another user later buys an option or places a firm order for the same slot, the original customer then has 30 days to match or better its competitor. If the cus tomer gives up its slot, the deposit is good for another launch position. ARIANE LAUNCH COSTS launch cost. In the event of a cancel lation, all of the option money is kept by Arianespace. Progress payments for a firm launch normally follow the signing of a contract three years before flight. The customer pays 10 per cent of launch cost every three months, between 36 and 15 months before lift off. Payments of 5 per cent of launch cost are then made at 12, nine and six months before flight. The final payment is 5 per cent at two months before lift-off, making a total of 100 per cent of launch cOst. Arianespace will allow payments to begin as late as two years before launch, however, although the cus tomer will end up paying slightly more. The customer pays all the pro gress payments due up to the time it commits itself, plus the extra cost to Ariane 1 Ariano 2 Ariane 3 Ariane 3 (half share) Paylcad ^Bgm%^ WMfM'i 2.000 2.3C0 :ift.m33tte; Cost to ESA Cost to other members (£ million) customers (£ million) 20 2 20 9 22 5" 12 V 16 2 16 8 18 3" 9 8" Notes (a) All prices are al 1973 economic conditions and are. normally quoted in French Urines. Oaf figures are base<i or, a 9?S ce.-wsrslori •ate o FrS-Sa 1» U->« f, ffc.JPilces. raarttesi * &vs approximate, (c) A halt share in Ariane 3 is equivalent to a Nasa Delta 3920 launch, but Kourou offers .i furthrr 120150kg saving in apogee hoc-si motor weight by being closer to the equator than Florida, d) Prices vary accordinq to options available, (e) :! a user plans to launch two satellites on its Ariane. it will have to pay about Fr5 million mere lor the- Sylda double launch A customer may buy the higher priority of an option over a reserva tion by paying 1 per cent of the launch price each month between 36 and 27 months before flight. The option may be preserved from 27 to 24 months by the payment of 1-5 per cent a month. If a competitor wants to place a firm order for the same slot, the option holder has 30 days to match its offer. An option holder must place a firm order two years before launch, or cancel its slot. If an order is placed, half of the option payments go toward Left Engine manufacturer Societe Euro- peenne de Propulsion (SEP) tests a first stage Ariane engine at Vernon. Below SEP is modifying engine injectors like this example by increasing the size of propellant-feed holes around the rim (Flight, February 21. page 518) Bill cover earlier financing. Payments then follow the normal schedule. As an example, a customer which signs for a launch 25 months before lift-off would make a down-payment of 49 per cent of launch cost. Later pay ments would bring total launch cost to 109 per cent of the normal value. Arianespace has made two excep tions to its payment schedule. These affect RCA and Western Union, which have made reservations for launches in late 1983 (Flight, February 28, page 562). RCA and Western Union would normally have begun their progress payments late last year, but are keen to wait until after the third Ariane test flight, currently scheduled for June. Arianespace has given the customers the choice of paying now with exceptional cancellation rights, or a slightly more expensive, com pressed-payment schedule after the launch. The Ariane launch costs quoted in the table above do not include in surance against failure. Customers normally take out a policy covering launch, satellite boost motor firing and deployment of antennas. Ariane space is pleased that insurers are offering rates which are similar to those for Delta launches by Nasa. An Ariane user can expect to pay about 10-11 per cent of launch price for comprehensive insurance, roughly 7 per cent of which covers the launch.
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