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image Week of May 10, 1999



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What's Wrong With the Launch Industry?


The newest rocket from the world's largest aerospace company, the Boeing Delta III, has been launched only twice since its debut last summer. The first ended in a fiery explosion. Last week, the second Delta III launched its satellite payload into the wrong orbit.

The trend is disturbing to those in the space and satellite industries, particularly in the US, still reeling from three botched missions in April alone.

Four of the last six rocket launches in the US have failed. This failure is the sixth US-built rocket to fail in the last eight months. The list includes the Air Force Titan 4 (3), the Delta III (2) and the Athena 2 (1).

The recent string of events is enough to leave the industry a bit gun shy, but is there really cause for such alarm?

Not necessarily, according to defense analyst Marco Caceres, a launch vehicle specialist at The Teal Group in Virginia.

What we're seeing with the latest series of rocket launch failures is the working out of "the kinks" in a new generation of rocket launch technology, Caceres told AWN.

"This is a period of completely new launch vehicle technology, as opposed to upgrades made to older technology," says Caceres. "And there will be a continuation of lot of failures."

Historically, launch vehicles experience failures quite regularly in the early stages of use. But in the past, these launches were controlled by government entities such as the Department of Defense or NASA, and much less visible to the general public.

Now that this industry has shifted toward the commercial, launches - be it their successes or failures - are often frontpage news. Successful launches receive their share of attention, but a rocket blowing up in fireball over the night sky or the loss of a multi-million dollar satellite payload, especially if it was built at the taxpayers' expense, is going to lead newscasts all over the world.

The rise in commercial launches has also led to the introduction of new launch vehicles much faster than they were before. These new vehicles, equipped with new generation technology, don't undergo the same length of testing performed on launch vehicles of the past in order to speed their introduction into the marketplace, Caceres said.

Boeing investigators are still trying to determine what went wrong with the Delta III's second launch attempt. Less than 22 minutes after liftoff from Cape Canaveral last Tuesday, the 12-story rocket's second stage engine failed to re-ignite, stranding the communications satellite on board in the wrong orbit. The second stage engine is built by Pratt & Whitney.

The payload was an Orion 3 broadcast video and data communications satellite built by Hughes for Loral Space & Communications. It is currently orbiting at an altitude of 85 by 750 nautical miles instead of the intended 100 by 13,886 nautical miles.

Ground controllers worked to raise the satellite's altitude and to aim the solar panels toward the sun, hoping to recharge onboard batteries through the solar arrays. But the satellite unlikely had enough fuel left to reach its ultimate station 22,300 miles above the Earth.

"We are very disappointed with this outcome," said Loral Skynet president Terry Hart. Loral, Hughes and Boeing will work together to determine the specific reasons for the failure, he added. One day after the launch failure, Loral chief executive Bernard Schwartz was calling the Orion 3 a "total loss."

"Despite advances in aerospace technology over the years, launches remain a complex undertaking, and risks are an inherent part of that complexity," said Hart.

The $230 million mission was fully insured, but Loral will be forced to refund around $35.5 million in prepayments it received from DACOM, a Korean communications company that had leased eight transponders on the Orion 3.

Schwartz told analysts he expects the Orion 3 failure to widen fiscal 1999 loss estimates due to the resulting revenue decline.

The Effect on Boeing

Although regrettable for Boeing, the Delta III failure is not the end of the world, Caceres says. Boeing has experienced a good level of success with its smaller-class Delta II program to see it through this latest incident. Besides, the Delta III is not a program planned to have a long lifespan, he says.

"The Delta III is a transitional program for Boeing from the Delta II to the Delta IV," says Caceres. He expects the Delta II to be transitioned out of service in two to three years, and the Delta III to be replaced by the Delta IV in about five years.

As for whether last week's failure would convince the company to scrap the Delta III program altogether, Caceres says this is possible, but unlikely.

"Boeing could go either way, but probably won't cancel the program," he says. "If the Delta III has one more failure, they may want to focus on IV rather than invest more on III, which isn't performing."

Boeing needs to keep the Delta III program going for at least another three years, due to the surging demand for commercial launches and to keep marketshare away from competitors, but Caceres is doubtful the program will ever be profitable.

"Boeing's long-term competitiveness and profitability never hinged on Delta III, so even if the program is a complete disaster the company will be fine," Caceres says.

The Delta III is destined to take marketshare away from the Ariane-4, the Atlas 2A, and the Proton vehicles in the medium-launch category. The Delta IV is intended to compete against the Ariane-5 in the heavy-launch category. French-led Ariane is the current marketshare leader in the lucrative space launch industry.

Meanwhile, Boeing is understandably determined to make the Delta III program work.

"We must and we will fly Delta III successfully," said Boeing's Gale Schluter, vice president and general manager for expendable launch systems. "...if we can determine the cause of the failure is unique to Delta III, we will clear Delta II for flight."

There are still two Delta III flights remaining on the Boeing manifest this year, and another 11 Delta II launches.

Lockheed Martin, maker of the Titan 4 and Athena 2, knows all to well what Boeing is going through. The company experienced three of the botched missions just last month. (See related story)



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