Arianespace has been hit by the downturn in new commercial launches and the impact of the Ariane 5 launch failure last July, suffering a €193 million ($176 million) loss on sales of €807 million in 2001. The year before, Arianespace sold €1.2 billion worth of launches, but reported net losses of €242 million.

Industry observers suggest that the results could force Arianespace to seek short-term government funding. The chief worry is debt: Arianespace has not released its balance sheet yet, but last year reported €2.6 billion in debts. This is unlikely to have improved over 2001. The company has also been hit by aggressive competition from Boeing and Lockheed Martin which, it claims, can offer 30% lower launch prices due to US government subsidies in the form of military launch contracts.

An "aggressive action plan" will allow a "rapid return to the break-even point", says Arianespace, which has so far carried out six successful launches this year, with seven more planned. The company has also won four new launch contracts this year, with three more for SatMex 6, Star 1 and Atlantic Bird 1 expected to be confirmed soon.

Source: Flight International