Lockheed Martin and Krunichev sign agreement for joint marketing of Angara a surprise for some commentators given comments by the Russians at Le Bourget

Published: 7/29/1999

On 28th July 1999 in Moscow, Thomas Corcoran, Vice-President of the Space and Ballistic Missiles Division of Lockheed-Martin and Anatoly Kiselyev, General Director of Khrunichev Space Centre signed an agreement on the joint marketing of the Angara family of launch vehicles (from 145t Angara 1.1 to 750t Angara 5). The marketing will be a responsibility of the International Launch Services (ILS) the joint venture between Lockheed-Martin, Khrunichev and RKK Energia, which currently sells the services of Russia's Proton heavy launch vehicles. The cost of the partnership with Khrunichev for Lockheed-Martin will be $68 million. Lockheed will focus on the development of sales, leaving Khrunichev as the Angara developer and manufacturer, as well as continuing Khruhichev's right to perform Angara launches for the Russian national space program. The commitment from Lockheed-Martin to the Angara came after extensive evaluation. The initial proposition to Khrunichev for the commercial use of this new launch vehicle was made in spring 1998. Lockheed-Martin however, took time to perform a careful market analysis of the launch market over the next twenty years. Lockheed-Martin itself is developing the Atlas V family using a similar technological approach to that of the Angara (namely using the unified thrust block). The Atlas V has become the major Lockheed-Martin space product in the next century. The company however, decided to have two families of launch vehicles at its disposals, to gain the advantages it has experienced with the Atlas IIAS + Proton combination. Also, the more cynical would point out, that by signing the agreement, Lockheed-Martin excluded Khrunichev from its competitors for the foreseeable future. Initially, Khrunichev was reported as not being keen to extend its links with the Americans. At LeBourget'99 Kiselyev said that the US world leadership in aerospace should be challenged by closer union between Europe and Russia, particularly in space. Kiselyev at that point believed that the US, with its new-developed Boeing Delta IV and Lockheed-Martin Atlas V families of launch vehicles and the recently-modified launch complexes at Canaveral and Vandenderg, would be able to meet its own and international market requirements for deployment of satellites produced by Hughes, Loral/Space Systems and Lockheed-Martin who produce 80% of the world's communications satellites. Kiselyev feared that the US launch vehicle manufacturers would pressure the US government to impose a ban or quotas on launches of US-built satellites atop foreign launch vehicles. The fear was realised after the US Government changed responsibility for exporting US-built satellites from the Department of Trade to the State Department. To tackle the potential US monopoly, Kiselyev offered the Europeans the opportunity to market jointly the Ariane and Angara launch vehicles and more broadly to create a satellite-building industry capable of competing against the US producers for US and non-US customers. The signing of the agreement with Lockheed only a few months after Le Bourget appears to be a u-turn by the Russians, leading to suggestions that they were merely creating conditions to force the hand of Lockheed Martin into making a decision. Whether this is true or not, the reality is that the new agreement is in place, with the prospect of erecting an international launch complex at Christmas Island off the coast of Australia with the Asian Pacific Space Consortium seeming less likely. For the last year this project was the centre of discussions between Khrunichev and the Asian Pacific Space Consortium (APSC). In the end it appears that APSC was not willing to pay the same price as Lockheed-Martin allowing ILC the right to market the Angara. On the 28th July Kiselyev said that the first commercial flight for the Angara is planned for 2003 from the Plesetsk Cosmodrome. The first test firing of the Angara 1.1, the smallest in the family, is posted for 2001. But the final date is dependent on the speed of work on the modernisation of the launch complex for the Zenit-2, into one capable of launching a variety of Russian launch vehicles. To achieve this, Khrunichev plans is looking to the banks to provide financing to supplement the inadequate funding provided by the Russian Ministry of Defence. The MoD is currently on paper at least, the main customer for the Angara. However, it is not in a financial position to fund its development and Khrunichev is now undertaking this from its own resources. The challenge for the company in the future remains financial in making sure that the Angara is priced attractively at or below the Proton cost of $70-90 million per launch. As Khrunuchev is a unitary state enterprise, the newly signed agreement has to be validated by the Russian Government. Kiselyev hopes that Prime Minister Stepashin will sign a governmental order in August following authorisation from RAKA, the Russian Aviation and Space Agency.

Article ID: 718