The European science ministers are hoping to strike a last-minute deal to provide funding for the Ariane rocket. Ministers from the 20-nation bloc are scheduled to meet in Luxembourg on Tuesday to resolve the future of the workhorse Ariane rocket. They will also decide on the future of Europe’s involvement in the International Space Station (ISS).
SpaceX offers launches for just 50 million euros
Funding for the Ariane rocket is crucial if Europe wants to stay in the commercial space race. Officials have been trying to reach an accord for the last two years. But now Germany has given up on its previous plan for a two-step project to upgrade the current Ariane 5 rocket, making the deal possible. Now ministers are set to approve the full development of Ariane 6 satellite launch vehicle.
The European Space Agency (ESA) is looking to respond to the U.S. rival SpaceX and protect thousands of jobs in the region. Founded by billionaire entrepreneur Elon Musk, SpaceX offers low-cost satellite launches. Europe needs to bring down the cost dramatically to compete SpaceX. For instance, SpaceX offers launches for 50 million euros, compared to 130 million euros launch price for Ariane 5. With the next-generation Ariane 6, the ESA plans to bring down the cost to 60-70 million euros.
Turning Pricing Power Into Profit
Company managements looking to achieve earnings growth often default to cost cutting, stock buyback, accounting gimmicks and other methods. But there is another way. More often than not, managements overlook pricing as a driver of earnings growth. Pricing power can be an effect way of boosting a company's bottom line. Read More
Ariane 6 concept has been proposed
Airbus Group CEO Tom Enders told Reuters that the European deal will be a “new chapter” in the way the 20-nation block approaches space. However, he warned that the bureaucratic structure of the European space industry could force the region to be “marginalized” by international competition. European space industry is still heavily influenced by state agencies. Airbus build the current Ariane 5 launch vehicle.
Europe’s Ariane launch vehicles have captured a staggering 50% market share. But rising international competition poses a threat to the region’s space ambitions. Scientists have proposed a new Ariane 6 concept. The ministers are asked to put in $4.7 billion for the development of A6 and an upgrade to the Italian-built Vega rocket. ESA’s total budget for this year was $5.12 billion, much smaller than NASA’s $17.6 billion.
Ministers are also expected to decide whether the ESA will continue to participate in the International Space Station beyond 2020.