SINGAPORE (Reuters) – Europe’s Arianespace is discounting the price of satellite launches with its Ariane 5 rockets as it competes against U.S. rival SpaceX for customers before the release of the cheaper Ariane 6 rocket next year, a senior executive said on Wednesday.

Arianespace is aiming for the cost of launching the Ariane 6 to fall by around 40 percent versus the Ariane 5 through design changes and higher volume production, bringing its prices more in line with Elon Musk’s SpaceX, Arianespace Managing Director and Head of Sales for Asia-Pacific Vivian Quenet said.

He said in current marketing campaigns, the company is offering customers such as telecoms an Ariane 5 launch for the same price as the Ariane 6.

“We have made a lot of effort on the sales price. When we do that, the result is very positive,” Quenet told reporters on Wednesday, declining to discuss details of profitability.

Arianespace is competing for two major launch contracts in the Asia-Pacific region that should be awarded this year and expects there could be tenders for another three, he said.

Arianespace, majority-owned by a joint venture of Airbus and Safran, completed 11 launches with its Ariane 5, Vega and Soyuz rockets in 2018, in line with guidance that had been lowered mid-year from an initial 14.

The company, which has a mission of guaranteeing Europe independent access to space and is used by government and commercial clients, this month forecast up to 12 launches in 2019, with four of them targeted in the first quarter.

The Satellite Industry Association lobby group estimates the satellite launch services market is worth $5.5 billion a year. SpaceX has upended the industry with reusable rocket technology that has slashed the cost of space transportation.

Another U.S. group, the United Launch Alliance joint venture between Boeing Co and Lockheed Martin Corp, said last week it would conduct the final design review for its new flagship Vulcan rocket within months as it also looks to lower costs to better compete against SpaceX.

Amazon.com Inc founder Jeff Bezos’ Blue Origin said this month it will fly its still-in-development New Glenn rocket in 2021 – the same year as Vulcan.

Reuters

Photo Marcel van Leeuwen