SpaceX’s Cost Reduction is a Bitter Pill for the Ariane Group – Why?

SpaceX is very excited and is working tirelessly to make their boosters reusable. That will consequently reduce the cost of the launches. That is good news but not for the camp of the Ariane Group. What is the group about in the first place? The French-based team is a leading contractor for the Ariane 5 launch spacecraft. Equally important, it is working on the Ariane 6 as of now. Why is it not happy with the new development then? Read on to find out more about the situation in hand.

For years, the Ariane Group has been one of the few favorites that NASA runs to when in need. Did you know that it is the firm whose booster propelled the James Webb Space Telescope? That being a multi-billion dollar project speaks volumes. However, they are afraid that the current state would change. SpaceX is making the launch market extremely competitive, and that poses uncertainty of whether the Ariane Group will survive.

It is not alone in this. There is also Russia as well as the United Launch Alliance. Nevertheless, they are in a worse position. The reason is that they created the Ariane 6 rocket for one purpose only. They wanted an equal counterpart for the Falcon 9 rocket of SpaceX. The problem is that it is competing with a firm that has reduced the prices of the launch to about $62 million.

Why can’t they go for that cost then? That is because as much as they would like to, they need to offer a price that will be 25% higher than that of SpaceX when Ariane 6 is ready. In addition to that, they will be prepared in 2020 and not earlier than that. While waiting to do so, SpaceX is through with their Falcon 9 boosters. If they were to offer relatively low prices, where would that leave the Ariane Group? The cost once they have used a Falcon 9 booster could get even less than the first one. That is much to handle.

Alain Charmeau, Ariane Group’s chief executive, made it clear about the frustrations are real. Now there is the United States and Europe competing for the commercial space jobs. According to Charmeau, SpaceX is already at an advantage. Therefore, it will be in a position to offer low prices. Will the Ariane Group survive with such a price margin? That is something that we can wait to see what transpires.