The European Space Agency is pressing ahead with its bid to develop a successor to its Ariane 5 heavy launcher by ordering continued feasibility studies, in preparation for a system requirements review in November 2014.

The €60 million ($99 million) feasibility study is to be carried out by Ariane 6 prime contractor Airbus Defence & Space. The subsequent system requirements review will help member states’ science ministers decide whether or not to continue with the project when they meet in December. ESA sees Ariane 6 as critical to Europe’s ambitions to remain a viable contender in a satellite launch market shaken up by the arrival of US start-up SpaceX and its relatively low-cost Falcon 9.

Ariane 5 has been an huge triumph, with 67 successes in 71 flights since 1996. The launchers have orbited half of the world’s communications satellites and claimed 60% of the 2012 world market for geostationary launches. But while the rocket is extremely precise and reliable it is also hugely expensive, with a single-payload flight costing €150-200 million. However, even at that price Ariane 5 launches are understood to be loss-making for ESA’s launch operator, Arianespace. And now Falcon 9, which earlier this year made its second successful flight – orbiting a Thai telecommunications satellite to geostationary orbit – undercuts Ariane 5 by about 30%.

While Falcon 9 is not exceptional technically, SpaceX has the advantage of a clean-sheet design and several hundred million dollars of NASA investment as part of its bid to replace its own, Space Shuttle-based launch capability with private operations and an industrial structure built purely for efficiency. By contrast, Ariane 5 – like many big European programmes – is burdened with an industrial structure built not for economic efficiency but for political viability, spreading work among many ESA member states.

That cost dilemma is not lost on the Europeans. Airbus boss Tom Enders has been adamant that even Ariane 6 cannot be cost competitive unless its new design is accompanied by a streamlined industrial structure. Alain Charmeau, who heads the Airbus Defence & Space division that builds Ariane 5, put it bluntly at the 2013 Paris air show when he said that there are too many people employed to build the launchers.

ESA director general Jean-Jacques Dordain, speaking in January 2014 at his annual press briefing in Paris, said the long-standing target of €70 million for an Ariane 6 launch remained firm: “If Europe can’t produce a launcher that can be launched for €70 million per launch, then we need to look hard at the rationale for producing launchers.”

And, added Dordain: “To have competitive launchers, we need to rethink the launcher sector in Europe.”

In engineering terms, Ariane 6 is ambitious. To keep development costs down it will share avionics and a new, restartable upper stage with a gap-bridging Ariane 5 iteration – the ME (Midlife Evolution). But the next-generation launcher will take on a radical configuration of all-solid fuel main stages and boosters, essentially borrowed from ESA’s new Vega light launcher, first flown in 2012.

By being built from storable modules, Ariane 6 should be far more flexible – and faster to launch – than Ariane 5, which must be tailor-made for each payload. Ariane 6 is also being designed for future market demand, to push single payloads of 3-6.5t to geostationary transfer orbit. Ariane 5 ME will be able to orbit two 6t payloads per flight, but while 6t telecommunications satellites are typical today, masses are expected to become increasingly varied in the future – an evolution that would make it harder to match Ariane 5 capacity to available payloads.