Price wars reach celestial heights
Buoyed by the successful first commercial flight of Western Europe's Ariane satellite launcher, backers of the rocket are hoping to put into orbit one-third of the satellites to enter the heavens over the next few years.Skip to next paragraph
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Arianespace, the mainly French company that sells launches using the rocket, was delighted with the vehicle's performance last week in putting a communications satellite owned by GTE, the US telecommunications company, into geostationary orbit 36,000 kilometers above the earth. It was the first US space vehicle to be taken above the atmosphere by a non-US launcher.
The 11-nation European Space Agency, which developed Ariane, administered the eight previous launches using the rocket. Arianespace assumed responsibility for this latest launch, and has orders to launch 28 satellites and reservations for 19 others, worth a total of some $800 million. Arianespace estimates 250 satellites will be launched between 1985 to 1991.
The rocket's main competitors are US vehicles, either the space shuttle operated by NASA or expendable rockets such as the Delta, administered by Transpace Carriers, or the Atlas-Centaur, operated by General Dynamics.
Transpace Carriers alleges that Arianespace is operating an unfair pricing policy, charging US companies 25 to 33 percent less than its European customers. Transpace says this infringes US trade regulations. Arianespace says it charges fees charged by Transpace and NASA for using a Delta rocket or the shuttle.
Arianespace admits it alters its fees to suit particular marketing strategies , and that it has benefitted from government subsidies, especially during the development of Ariane. (France paid 70 percent of the development costs.)
The European Space Agency also pays the annual $50 million costs of running the space center in Kourou, French Guiana, from which Ariane is launched. It is also paying $200 million to build a second launch pad there.
But European observers say the space shuttle, too, is subsidized. NASA recoups in launch fees only a fraction of the $125 million or so that each mission costs.