Ariane to Report Loss for 2000

Arianespace is expected to report a loss for 2000 of over US$190 million (Î200 million) out of revenues of US$1.03 billion (Î1.1 billion). In 2000 the company launched twelve rocket (eight Ariane 4, four Ariane 5). Ariane had a US$6.8 million (Î7.3 million) profit in 1999.

Ariane signed 25 launch contracts in 2000 primarily for the Ariane 5. The list includes fifteen telecommunications satellites, one scientific satellite and nine cargo launches for the European Space Agency (ESA) for the international Space Station. The company’s objective in 2001 is to win 16 to 18 new orders.

Arianespace attributes the projected loss on number of factors. A major contributing cause is the high cost of the first batch of 14 rockets ordered from its industrial contractors in the mid-1990s. Arianespace and its contractors have agreed to a 35 percent price reduction for the second batch of 20 rockets, with a further 15 percent drop expected when the third batch order is placed. The simultaneous phasing in of Ariane 5 and phase-out of the Ariane 4 resulted in increased operating costs. Ariane 4 being used less frequently for dual launches, because of the increasing weight of satellites, has made its operation no longer as profitable as it was. Costs related to the investment in production tools and operational facilities in Europe and new facilities at the Kourou launching site contributed the loss, as well as costs toward the development of upgraded versions of Ariane 5 to be introduced in 2002. Arianespace also had to pay for some of the Ariane 5 development costs that originally were expected to be financed by European governments, who insisted Arianespace contribute to the increased costs associated with fixing the problems that led to the failure of the Ariane 5’s first flight in June 1996.

Arianespace plans to launch sixteen satellites on eleven launches in 2001, six launches using an Ariane 4 rockets and five launches using an Ariane 5. Six Ariane 5s are scheduled for launch in 2002 and seven launches in 2003. A launch rate of 8 Ariane 5s per year is planned beginning in 2004. Only 15 Ariane 4 rockets remain to be launched. During 2003, the Ariane 4 will be phased out. Performance of the Ariane 5 to geostationary transfer orbit will be increased to 10,000 kg (22,000 lbm) in 2002, and in late 2005 performance will be further enhanced to 12,000 kg (26,450 lbm), accompanied by the capability to re-ignite the upper stage during flight.

Arianespace has 53 shareholders. Centre National d'Etudes Spatiales (CNES) is the largest shareholder with a 32 percent stake, EADS holds nine percent, while EADS's majority owned satellite maker Astrium holds 16 percent and engine-maker Snecma eight percent.

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