July 1st, 2001

There is always a risk with rockets. No matter how many checks and re-checks, things can go wrong. That's exactly what happened on July 12 to Arianespace's launch from French Guiana when the rocket misfired and the expensive satellites riding on top failed to reach the proper position in space. That throws business plans into freefall and means up to an estimated $1bn in lost hardware (although one of the satellites, called Artemis, may be partially recoverable thanks to onboard fuel that it could use to push itself to the right orbital spot). Not only is this a gut punch to the European Space Agency (ESA), which is trying to promote the reliability of its new Ariane 5 rocket, but it also gives a bit of a tip to the delicate balance of power in the highly competitive commercial launch business.

This is important because Europe, although late to the game, is eager to be big in the commercial space business. In the meantime, competition for commercial launches is not only heating up between the US, Russia and Europe's Arianespace. China, India and the Japanese are all playing the commercial launch game. The Indian and the Chinese programmes are, like those of the US and Russia, by-products of missile-development programmes, while Europe's programme, begun only in the mid-1970s, had a commercial heritage (although there was at one time a lot of work and tax-payer money spent on European space shuttle project Hermes). The Japanese programme is a hybrid of commercial imperatives and national space ambitions.

In the bleak landscape of Kazakhstan, the Russian military base that houses Russia's current commercial launch programme is a sort of half-welcome intruder. Now that Kazakhstan is independent, you must pass through border controls both at the military airport and at checkpoints around the Russian base. As the group here to see the launch of an SES Astra broadcasting satellite was bumped and jolted by potholes along the road from the airport, we took in the vast, flat, monochromatic landscape stretching either side as far as the eye could see. The emptiness is only broken occasionally by clusters of buildings (many out of use), abandoned missile silos, blown up in accordance with the non-proliferation treaty, and, most dramatically, by the iron towers of the 50 or so launch pads that dot the horizon.

For the Russians, the commercial satellite launch programme is bringing much-needed funds to the Khrunichev State Research and Production Space Centre and the Russian Space Complex Energia, the Russian equivalents of ESA or NASA. To help stimulate commercial business, Khrunichev formed a joint venture in 1993 with Lockheed Martin to provide launch services on the American Atlas and the Russian Proton rockets. The company, ILS, guards its financial results pretty tightly, but it had $1bn worth of launch contracts signed last year.

Some of the money has been used to spruce up the prosaically named Hotel Sputnik, used by foreign visitors to the Russian base, which is called Baikonur, even though on a map the base is in Turatam, not Baikonur, which is far to the south. "It's called Baikonur to hoodwink the potential enemy," said our guide, whose use of the present tense did not seem to be because of any problem with the English language.

Launches are both humbling and invigorating experiences. I always watch the faces of the executives whose bottom lines are riding on the satellites atop these metal powder kegs. If the launch goes wrong, their expression will paint a picture better than a thousand words. In the case of Astra 2C there were no hitches and the celebratory vodka was excellent. Interestingly, SES, the operator of Astra, decided to switch from an Ariane to a Proton rocket only six months before as a precautionary measure. SES was playing safe with a satellite it needs as a backup to some of its older spaceborne fleet.

SES's reasoning was simple: whereas Proton uses four propulsion stages with the fourth stage actually bringing the satellite right to its destination, geostationary orbit, by contrast Ariane is a three-stage rocket that ends up further away from its destination. Satellites launched on Ariane have to rely on the fuel they brought along with them to fly the last leg of the trip into geostationary orbit. Typically that uses up 60% of the satellite's onboard fuel.

Proton's design not only saves the onboard fuel of the satellite which could help lengthen its useful life in orbit (sporadic bursts of fuel are needed to keep satellites in the right place) but Proton's power also acts as a kind of safety backup. Even if the fourth stage fails entirely, the Proton would, by sheer brute force, push the satellite closer to geostationary orbit than Ariane is designed to do. "This rocket is a workhorse," says ILS CEO Len Dest.

At the moment SES is scheduled to use Ariane 5 for the launch of its Astra 3A satellite in February 2002, but the recent Ariane failure may make SES think again. It could request the proven and reliable Ariane 4, which Arianespace is trying to phase out in its plan to move to more powerful rockets, or SES might change to another launcher altogether.

The company is already booked on Proton for its 1K satellite in December.

The loss of the Astra operator as a loyal customer would have big ramifications: SES is close to finalising a proposed $5bn acquisition of rival satellite operator GE Americom, which operates 17 satellites in North and South America.