EADS’s Astrium space division ended 2013 on a note of triumph, with the Gaia star-mapping satellite it built for the European Space Agency enjoying a perfect Soyuz launch from the agency’s spaceport in French Guiana.
But the company – which is also prime contractor for ESA’s Ariane 5 and in-development Ariane 6 rockets, as well as many of the most sophisticated commercial satellites flying today – faces several months of uncertainty as EADS reorganises in a bid to boost its cost-competitiveness amid reduced military spending, by combining Astrium with its Cassidian defence products unit into a single division, to be called Airbus Defence and Space.
Speaking to Flightglobal in French Guiana during the final hours of the Gaia countdown before its launch at 09:12GMT on 18 December, Astrium’s satellites unit head, Eric Beranger, confirmed that he had targets for cost reduction, but said the numbers were not “public”. However, he stressed, plans are already being implemented to address cost issues: “It’s a work in progress.”
What is known of EADS’s plans so far is that 5,800 jobs will be cut across Astrium and Cassidian – about 15% of the pre-shuffle headcount – and that Cassidian will lose at least one major facility, at Unterschleissheim near Munich. The impact on Astrium’s facilities and operations remains to be seen, and much of the focus of EADS’s restructuring so far has been on Cassidian, which is suffering from heavy defence spending cuts in Europe, particularly in Germany where the organisation is most concentrated.
But however the EADS equation works out, one thing is certain – Astrium is Europe’s biggest space company, and whatever happens there is going to be felt throughout the region’s high-technology sector.
As the Gaia launch illustrates, ESA, launch operator Arianespace, and key suppliers like Astrium can take justified pride in the quality of their work, but have to take seriously the challenge of cost competitiveness.
Giving the keynote address at the Washington DC space business roundtable on 3 December, and reiterating the point at the launch centre in Kourou on the eve of Gaia’s perfect-to-the-second launch, Arianespace chief executive Stéphane Israel noted that, in the last 10 years, his organisation has run 57 consecutive Ariane 5 launches, 22 Soyuz launches (including six at the Guiana Space Centre, known by its French acronym CSG) and two Vega launches “with 100% mission success”. And, he stressed, an especial sign of quality is the fact that the last 12 Ariane 5 countdowns have run through to launch without delay.
In addition to ESA and commercial telecoms satellite owners, that reliability – and Ariane 5’s huge payload capacity of 10t-plus to geostationary orbit – has won Arianespace launch contracts with NASA, the US defence department, Federal Aviation Administration and National Oceanographic and Atmospheric Administration. Astrium-built Ariane rockets have orbited half of the world’s communications satellites, and in 2012, Arianespace claimed 60% of the world market for geostationary launches.
In spaceflight, errors in design, execution or operation are punished with spectacular failure, so Arianespace and Astrium are clearly part of a European industrial team that delivers quality. But Europe’s space industry is coming under increasing pressure to deliver at a more competitive cost, an issue well-illustrated by the Gaia mission.
When the mission was first conceived in 2000, the budget assumption stood at €1 billion ($1.4 billion), including a larger spacecraft and Ariane 5 launch. A complete re-design around different imaging technology then enabled the satellite to be downsized to fit the smaller and cheaper Soyuz launcher, and the budget was reduced accordingly.
In the end, the €740 million bill for hardware, launch and five years of operation represents a 16% cost overrun. Notwithstanding that inflation, ESA – a notably cost-conscious organisation keenly aware that its operations are funded by the grace of its budget-constrained member states – regards Gaia as good value, at least compared with its original cost estimates.
But the roots of the Gaia overrun point to the challenge facing Europe’s space industry. About two-thirds of that €102 million cost overrun is accounted for by technical difficulties in realising the extremely precise – and all-European – station-keeping system and optical payload that will make Gaia a true landmark in the history of astronomy. As the aerospace industry knows all too well, few spending forecasts survive contact with the realities of turning high-tech dreams into functioning hardware.
It is to rest of the cost increase that European space players must turn their forensic attention. ESA pins the other third mainly on “an increase in the cost of the Europeanised Soyuz launch vehicle”, which first flew in 2004 and has been operated from CSG since 2011.
That “Europeanised” Soyuz is the highest-performance, 2-1b version of a configuration that has flown since 1966. Launching from Baikonur, which is one Arianespace-organised Soyuz option, costs €40 million – from CSG the cost is €64 million (though payload potential is some 35% greater owing to CSG’s position at just 5° north of the Equator).
Even that cost pales in comparison with the Ariane 5 – at €150-200 million for a single-payload mission. As Bernhard Gerwert, currently head of Cassidian and due to lead Airbus Defence and Space, put it when explaining the job cuts to hit the divisions, SpaceX’s all-new Falcon 9 is 30% cheaper – a cost gap that leaves much of the Astrium business unprofitable.
So, that cost explains much of the drive to replace Ariane 5 with Ariane 6 from about 2020. Approved for development by ESA member states at their five-yearly ministerial budgeting meeting held in Naples in November 2012, Ariane 6 should cut costs dramatically, by borrowing components like a new, restartable upper stage being developed for Ariane 5 by Snecma, Ariane 5 avionics and the main stage of the smaller Vega rocket as boosters. And, where each Ariane 5 must be tailored for a particular mission, Ariane 6 will cut manufacturing costs by being assembled relatively quickly from pre-fabricated solid fuel sections.
Unfortunately, a fresh design will not be enough to overcome the inherent costliness of Europe’s industrial strategy. As their funding comes from multiple member states, projects like Ariane maintain political support by sharing work between those countries. This practice, which inevitably duplicates costs, has also dogged EADS since its founding as an amalgamation of national aerospace champions. Chief executive Tom Enders has been fighting back – most visibly by consolidating corporate headquarters in Toulouse, at the expense of Munich – but in December warned of more job cuts if costs are not radically slashed; even Ariane 6, he said, “cannot work” in such an “unwieldy industrial structure”.
SpaceX, by contrast, started as a clean-sheet company and has built only the cost base it needs.
That Europe needs a new industrial design as much as it needs a new rocket design is not lost on the industry. The issue was summed up bluntly at the 2013 Paris air show by Alain Charmeau, who heads up the Astrium Space Transportation unit that builds Ariane: Astrium and its partners employ way too many people to build rockets.
Whether or not Europe is able to grasp this particular nettle may be apparent in September 2014 when ESA member states meet to consider interim budget matters, including whether or not to open the cash throttle and push ahead with Ariane 6. The challenge of that meeting in Switzerland will be for ESA, Astrium, Arianespace and other industrial partners to convince Europe’s governments that they must deliver a new industrial paradigm as well as a new rocket.