Exclusive: SpaceX Accuses Europe's Ariane Of Unfair Competition
Elon Musk’s company has asked Washington to intervene about its top European competitor receiving public subsidies. It's an odd twist in the larger trade battle, as well as the evolving world of space business.
PARIS — In a less tense geopolitical and commercial context between the US and Europe, the situation might generate a hearty laugh. SpaceX, the rocket manufacturer revolutionizing the space sector with its partially reusable rockets, is complaining to Washington about unfair competition from the longstanding European program Arianespace. SpaceX submitted a letter dated in December to a top U.S. trade official, of copy of which was recently obtained by Les Echos, denouncing subsidies from the EU and the French government, which it says artificially reduce the price of Arianespace's launch services on the international market.
While Europeans are busy worrying that Ariane 6 rockets will lose out against SpaceX's products, the company founded by Elon Musk has taken aim at the financial aid allocated by the European Spatial Agency (ESA). In the letter, addressed to Edward Gresser, Assistant United States Trade Representative for Trade Policy and Economics, the Californian company values the total subsidies between 1988 and 2012 at 13.2 billion euros. It also questions the public financing of the Kourou spaceport in Guyana, estimating that it allows Arianespace to exclude infrastructural weight in its commercial offerings.
The U.S. company, which set off price decreases across the space sector, is asking American officials to correct this unfair competition as part of their commercial negotiations with the EU, guaranteeing that Arianespace doesn't receive preferential treatment and that EU members don't discriminate against non-European manufacturers.
The money Europe has consecrated to space conquest is very modest compared to American and Chinese spending.
All of this is a bitterly amusing episode, considering that Arianespace has been fighting in vain for months to obtain a promise from European countries that they will launch their satellites on Ariane 6. For Jean-Yves Le Gall, head of the French government's space agency CNES, this motion is to be filed away as "background noise" in the commercial battle of space exploration. "In terms of launching, remember that the Buy American Act exists, which prohibits every American operator from using foreign rockets if a satellite has 51% of its components made in the USA," he points out.
And in terms of state funding, it should be noted that the money Europe has consecrated to space conquest is very modest compared to American and Chinese spending. The quest for strategic autonomy justifies public investments in space, and a perfectly free competition in the space launching sector isn't on the agenda, according to André-Hubert Roussel, CEO of ArianeGroup.
SpaceX also clearly presented itself as the world leader of the space industry in the letter, with over 60 launches already executed for both governmental and commercial clients, as well as some 40 launches on order— all of which represents more than $12 billion in contracts.
This is a revealing number for a company that hardly communicates on the subject. It would mean an average price of $120 million per launch, far from the $60 million pricetag SpaceX on its commercial brochures.