Fleet operator APT reports stable 2018 revenue, EBITDA, minimal hit from Apstar-6 solar array failure

The Apstar-5C/Telstar 18V satellite entered service in December and did not materially contribute to APT’s 2018 revenue. Credit: APT Satellite Holdings
PARIS— Satellite fleet operator APT Satellite Holdings Ltd. reported a slight increase in revenue in 2018 despite the mid-year loss of half the capacity on its Apstar-6 satellite following the failure of its south solar array.
Hong Kong-based APT took a non-cash impairment charge of 150 million Hong Kong dollars, or 50% of the satellite’s book value, against its 2018 accounts but said the arrival of the long-planned replacement, Apstar-6C, in July limited the revenue effect of the failure.
APT launched two satellites in 2018 — Apstar 6C and 5C.
The Apstar 6C satellite entered operations in July. Shown here is its Ku-band footprint over China. The satellite took over traffic from the Apstar 6 satellite whose south solar array failed in May. Credit: APT Satellite Holdings
Apstar-6C, a DFH-4 model built by the China Academy of Space Technology, has 26 C-band and 19 Ku-/Ka-band transponders. It entered service in July.
APT said it had filed an insurance claim for the Apstar-6 loss and that “claim procedures are nearly completed.” APT reported an insurance payment of 128.7 million Hong Kong dollars — $16.5 million — with the final amount awaiting confirmation by APT’s insurance underwriters. Apstar-6 is operating in inclined orbit.
The large Apstar-5C, co-owned with Telesat Canada, which calls it Telstar 18 Vantage, was launched in September but did not enter service until December and did not contribute materially to the 2018 results. APT owns 57% of the satellite’s capacity.
Apstar-5C includes a standard-Ku and C-band payload with seven wide beams and a regional high-throughput Ku-band beam over Southeast Asia, meaning it provides substantially more net capacity than the Apstar 5 satellite it is replacing. Apstar-5 is now in inclined orbit.
Fo the 12 months ending Dec. 31, 2018, APT reported revenue of 1.24 billion Hong Kong dollars, or $158 million at year-end exchange rates. That’s a 2.5% increase over 2017. But pretax profit was down 0.3%, to 619.6 million Hong Kong dollars.
EBITDA, at 1.03 billion Hong Kong dollars, was 83.4% of revenue, down from 84.4% a year earlier. Available cash at Dec. 31 was 686.9 million Hong Kong dollars, down 29% from the previous year.
Revenue by region was 47% Southeast Asia, 28.5% greater China, 9.4% Hong Kong and 15% elsewhere.
APT has entered into an agreement with Chinese mainland interest to fund what is intended to be a fleet of geostationary-orbit satellites to provide global aeronautical and maritime mobility services.
But so far, only the first of these spacecraft, Apstar-6D, has been funded and is under construction in China. Construction is scheduled to be completed late this year but no launch date has been announced.
APT Chairman Li Zhongbao drew the by-now-habitual picture of an oversupplied, hyper competitive East Asian satellite market. No revenue uptick from the two new satellites was predicted.

Fearing interference with military broadband satellite, France asks ITU regulators to annul Greek license

HellasSat-4/SaudiGeosat-1 in final production at Lockheed Martin. Launched Feb. 5, it is now expected to be operational by early June. Credit: HellasSat video
PARIS — The French government asked international regulators to cancel a Ka-band satellite reservation that Greece and Saudi Arabia are about to activate for a military payload that will interfere with — and suffer interference from — a Franco-Italian military satellite.
The argument is ostensibly between France and Greece, which for years have been negotiating, unsuccessfully, to resolve the problem of operating a Greek satellite using the same Ka-band frequencies as a Franco-Italian spacecraft separated by only 1 degree in geostationary orbit.
But the HellasSat-4/SaudiGeosat-1 satellite launched on Feb. 5 and now making its way to final orbital position at 38 degrees East is a dual-payload mission whose military Ka-band is for the Saudi government. It is this payload, and not the Ku-band payload to be used by Greece’s HellasSat fleet operator — which is owned by Arabsat of Saudi Arabia — that is the source of the dispute.
The Franco-Italian Athena-Fidus military broadband satellite was launched in February 2014 and operates from 39 degrees East.
The International Telecommunication Union (ITU) is the indispensable rampart against orbital-slot and radio-spectrum chaos. But its actions often combine the worst of the United Nations with the habits of a secret society.
Radio frequencies are more coveted than ever, with heated battles between terrestrial-wireless and satellite network operators. Multiple satellite constellations are seeking global licenses for spectrum used by existing services. This makes the ITU’s job of preventing interference and assuring equitable spectrum allocation ever-more complex even as its rulings become crucial to national economies.
Credit: ITU
The ITU’s top decision-making venue is the quadrennial World Radiocommunication Conference (WRC), a four-week marathon where spectrum access deals are made well past midnight, in rooms where only a few are paying attention.
“True radio-spectrum expertise is rare, maybe 100 or so experts really know their stuff,” said a European government official. “You don’t hear much about them. But every four years they become among the most valuable people in the world for government and business.”
The next WRC meeting is scheduled for Oct. 28-Nov. 22 in Sharm el-Sheikh, Egypt.
In the run-up to WRC-19, Space Intel Report will be publishing an occasional series of articles illustrating the challenges confronting the ITU and the specific satellite-related policies on the WRC-19 agenda.
The series will highlight how nations often game the system — changing frequencies without coordination, using a single satellite to “bring into use” multiple orbital slots, declaring as operational a satellite that has never existed, and disguising commercial missions as “military” to avoid ITU scrutiny.
Well before Athena-Fidus was launched, HellasSat, through the Greek government, filed Ka-band reservations for a future satellite at 38 degrees east.
Without a satellite of its own to secure the slot and the frequencies by the International Telecommunication Union (ITU) deadline, HellasSat leased the Nimiq-2 satellite from Telesat Canada.
Under ITU rules, a satellite operator running late with its own program can satisfy ITU’s “bringing into use” regulation by placing a satellite — any satellite — at the intended orbital slot and broadcasting in the assigned frequencies for three months.
Telesat and other operators have carved out niche businesses by allowing their satellites to be used in this way. So it was that Nimiq-2, launched in December 2002, found itself at 29 degrees East in October 2013. It left in January 2014.
HellasSat subsequently told the ITU that its Ka-band reservation for 38 degrees East had been confirmed.
Nimiq-2 was gone by the time Athena-Fidus began operations at 39 degrees East, but the French National Frequencies Agency (ANFR) was concerned about HellasSat’s future Ka-band intentions.
The Greek government told France that yes, Greece and HellasSat intended to develop Ka-band at 38 degrees East. HellasSat’s ambitions in particular were broadened a year earlier, when Saudi Arabia-based Arabsat purchased the Greek operator for $281 million.
Coordination between satellites separated by 1 degree is difficult in the best of cases. France asked Greece: Could you not move eastward by a few degrees? The Greeks responded that no, their Ku-band broadcasts had no room to operate any further east given Russian and Turkish satellites. How about if France moved Athena-Fidus westward?
Negotiations went nowhere. In 2015, HellasSat and Arabsat jointly purchased, from Lockheed Martin Space Systems, a large Ku-/Ka-band satellite to be used by both operators from 39 degrees east.
The Saudi government would use the Ka-band spot beams for military purposes, while HellasSat would use the Ku-band capacity to expand its current business from the HellasSat-3, launched in February 2017. The joint satellite would be called HellasSat-4/SaudiGeosat-1.
For France, what had been a theoretical problem now became real.
Whether by real need or only to buttress its argument against HellasSat, France in 2016 signaled that it, too, might want to lease Nimiq-2. But first it needed to verify exactly what Ka-band capacity it carried.
Lockheed Martin, which also built Nimiq-2, in November responded with the satellite’s technical details.
Telesat’s Nimiq-2 has had a varied career being used to “bring into use” orbital-slot regulatory filings for numerous operators. It has generated regular revenue for Telesat by doing this. The French government argues that every operator using Nimiq-2 has declared the same Ka-band frequencies to international regulators — except one. Greece’s HellasSat declared that its use of Nimiq-2 in 2013 brought into use a broader range of Ka-band frequencies that it now intends to use from HellasSat-4/SaudiGeoSat-1, launched in February to 39 degrees East. That would interfere with the Franco-Italian Athena-Fidus satellite, one degree away at 38 East. Credit: French ANFR submission to the ITU Radio Regulations Board.
France also dug into the history of Nimiq-2, which has been used by several operators for “bringing into use” purposes.
According to a document that France’s ANFR presented for the ITU’s March 18-22 Radio Regulations Board (RRB) meeting, every other operator using Nimiq-2 listed only a modest Ka-band frequency range, of 19.7-20.2 GHZ on the transmission side and 29.5-30 GHz on the reception side.
HellasSat and the Greek administration was the sole exception, saying the satellite covered the full Ka-band spectrum — 17.7-21.2 GHz and 27.5-31 GHz.
Armed with this information, France asked Greece how it could claim it brought into use such a wide swath of spectrum when there was no record of any satellite being at 38 degrees East in Ka-band but Nimiq-2?
France said Greece never responded to their inquiry.
Concluding that bilateral discussions were going nowhere, France on Feb. 25 made a formal request to the RRB that it move to annul the Greek Ka-band license at 39 degrees.
In its letter, France referred to the “strategic importance of the Athena-Fidus satellite network for French national security and defense policy.” Negotiations on coordinating Ka-band with satellites just one degree from each other “have reached an impasse.”
Greece, which separately had asked the RRB to grant a four-month extension of the revised deadline for its Ka-band reservation, to October 6 — the satellite was late in launching aboard an Arianespace Ariane 5 rocket — said it was “absolutely astonished” by the French RRB petition.
“This official challenge by the French administration … seriously questions, if not puts into jeopardy, the good faith demonstrated by Greece … during the past six years for a viable settlement of the problem.”

Britain’s Avanti, Saudi Arabia’s Arabsat head toward in-orbit satellite interference over Ka-band rights

The Arabsat-5A satellite before its June 2010 launch. Any Ka-band there? Credit: CNES-ESA-Arianespace
PARIS — Satellite operators Avanti of Britain and Arabsat of Saudi Arabia are heading for an in-orbit confrontation that will undermine both companies’ business once the Arabsat-6A satellite is placed into service sometime this year.
It is the latest instance in which one satellite operator, and its government, accuses another of making false claims to international regulators about what it has in orbit and covering it up by labeling it “military.”
At issue in this case is whether the Arabsat-5A satellite has been broadcasting in Ka-band for the last decade, as Arabsat claims, or has never done so and in all likelihood doesn’t even have Ka-band capacity, as Avanti alleges.
Arabsat-5A was launched in June 2010 into Arabsat’s 30.5 degrees east orbital slot.
Two years later, in 2012, Avanti launched its Ka-band Hylas-2 into a position just half a degree distant, at 31 degrees east.
Neither company alleges frequency interference from the other, and that’s part of the problem. Avanti says that its satellite would have met with substantial interference if Arabsat-5A were operating in Ka-band at such close proximity.
The International Telecommunication Union (ITU) is the indispensable rampart against orbital-slot and radio-spectrum chaos. But its actions often combine the worst of the United Nations with the habits of a secret society.
Radio frequencies are more coveted than ever, with heated battles between terrestrial-wireless and satellite network operators. Multiple satellite constellations are seeking global licenses for spectrum used by existing services. This makes the ITU’s job of preventing interference and assuring equitable spectrum allocation ever-more complex even as its rulings become crucial to national economies.
Credit: ITU
The ITU’s top decision-making venue is the quadrennial World Radiocommunication Conference (WRC), a four-week marathon where spectrum access deals are made well past midnight, in rooms where only a few are paying attention.
“True radio-spectrum expertise is rare, maybe 100 or so experts really know their stuff,” said a European government official. “You don’t hear much about them. But every four years they become among the most valuable people in the world for government and business.”
The next WRC meeting is scheduled for Oct. 28-Nov. 22 in Sharm el-Sheikh, Egypt.
In the run-up to WRC-19, Space Intel Report will be publishing an occasional  series of articles illustrating the challenges confronting the ITU and the specific satellite-related policies on the WRC-19 agenda.
The series will highlight how nations often game the system — changing frequencies without coordination, using a single satellite to “bring into use” multiple orbital slots, declaring as operational a satellite that has never existed, and disguising commercial missions as “military” to avoid ITU scrutiny.
The lack of interference between Arabsat-5A and Hylas-2 “can only mean that Arabsat-5A has not been transmitting in the receiving bands of interest for at least three years,” Britain’s Ofcom telecommunications regulator told the ITU in a March 4 submission.
In the pecking order of satellite fleet operators, Arabsat is a large regional player; Avanti is a smaller one. The London-based company might have declared “no harm, no foul” with respect to Arabsat-5A but for the fact that Arabsat is using its alleged Ka-band heritage on Arabsat-5A to launch the Arabsat-6A this year.
The launch, aboard a SpaceX Falcon Heavy rocket, has been delayed several times and is now set to occur sometime between April and June, the Saudi government regulator said in a March 18 statement to the ITU.
Ofcom told the ITU that Avanti had sought meetings with Arabsat to find a coordinated commercial approach that would permit Hylas-2 and the coming Arabsat-6A to operate without interference, only to be rebuffed.
Avanti’s interest in finding a solution is all the more important because its much-delayed Hylas-3, also carrying a Ka-band payload, is scheduled for launch this year, also into the 31 degrees east orbital slot.
Ofcom and Avanti said they have combed the professional literature and hired satellite broadcast frequency specialists to confirm whether any Ka-band emissions have been coming from Arabsat’s 30.5 degrees location. They found none.
In its March 18 submission to the ITU’s Radiocommunication Bureau, Arabsat said that’s only to be expected: The frequencies were always reserved for military use and thus kept secret.
The U.K. administration “could not find any real information regarding Arabsat-5A operations because this is a governmental network,” the Saudi Communications and Information Technology Commission said in its March 18 ITU submission. “We emphasize that no really information is available in the public domain. The coverage available in the public domain is for illustration only.”
During its construction and launch, Arabsat always described Arabsat-5A as designed to operate from either of two orbital slots, with 24 Ku-band and 28 C-band transponders.
Here is Arabsat’s map of the Arabsat-5A satellite’s Ka-band steerable beam coverage. Britain’s Ofcom says any coverage like this would have caused considerable interference to Hylas-2, in orbit since 2012. No interference was recorded. Credit: Arabsat
Ofcom’s statement to the ITU is dated March 4, two weeks before the Saudi submission. Ofcom makes no reference to an alleged military mission for Arabsat-5A, which suggests that Arabsat had not made this point until now.
Ofcom says that even if Arabsat had placed a Ka-band payload on the satellite and then had stopped using it, ITU regulations require operators to inform the ITU of that fact, and must bring back into use the service within three years.
Failing to do so means the ITU cancels the registration.
“Since it is clear that these assignments have been left unused for more than three years — January 2016-January 2019 — they should be suppressed,” Ofcom said.
The Saudi filing, arriving the day the Radiocommunication Bureau began its quarterly session — March 18-22 — seeks to close down discussion by invoking  Article 48 of the ITU Convention. Invoking Article 48 — claiming a network is military in nature — means the ITU cannot challenge it.
“Due to the nature of the service and the application of Artile 48, the administration of Saudi Arabia is not in a position to provide further information,” The Saudi statement concludes. It suggests that Ofcom and Avanti re-initiate coordination talks.
Letter of reference from Sudan
The Saudi statement includes a letter from the Sudanese Telecommunications & Post Regulatory Authority vouching for the military Ka-band on Arabsat-5A.
“The administration of Sudan confirms the quality of service availability of Ka-band governmental services over the territory of Sudan fro the orbital location of 30.5E,” the Sudanese regulator said. “These services have been provided occasionally on the steerable beam, based on demand.”

Israeli broadcaster plans gradual migration from satellite operator Spacecom to an all-OTT service

The Boeing-built Amos-17 satellite, to be launched this year, carries a C-, Ku- and Ka-band payload. Above is the Ku-band coverage over EMEA. Credit: Spacecom
PARIS — A major customer for Israel’s Spacecom satellite fleet operator has begun a multi-year move away from satellite television to OTT, raising a fresh challenge for the already struggling fleet owner.
The announcement by Bezeq The Israel Telecommunication Corp. is not definitive. The company, which owns D.B.S. Satellite Services, known as “yes,” said it will continue to assess market trends and its customers’ preferences before making the move.
But the decision of the company’s board of directors approving the move from satellite to OTT is nonetheless ominous for Spacecom.
D.B.S./yes said the decision “was taken in light of trends in the TV content market that include lower barriers to entry, emergence of new players, establishment of OTT broadcasting technologies, changes in the value chain and the change in consumer habits.
“All these trends, together with the differences between the technology of the older satellite broadcasts and the technology of OTT broadcasts with all its inherent advantages, required an examination of the need for OTT-based products by yes.”
The broadcaster in 2017 signed a long-term agreement with Spacecom on existing satellites and the future Amos 8, which was abandoned when the Israeli government decided — after the Amos-8 contract was signed with manufacturer Maxar Technologies/SSL — to scrap the transaction in favor of a satellite built by Israel Aerospace Industries (IAI).
But IAI is still waiting for the government to finance sustainable program that would enable IAI to stay in the telecommunications manufacturing business, and no Amos-8 is in production.
The D.B.S./yes contract with Spacecom, valued at $21.9 million a year for 12 years, was scrapped by the broadcaster in December after it became clear that Amos 8 was not going to be built and that Spacecom would not have the contract-specified capacity in place by the contracted deadline.
Spacecom has contracted with Boeing Satellite Systems International for a mixed C-, Ku-, Ka-band satellite, called Amos-17, to be launched this year and remains at least outwardly hopeful that its customer could annul or slow its migration to OTT by using the new satellite.
In a statement issued just after the Bezeq/D.B.S./yes announcement, Spacecom stressed that the OTT decision was “gradual and conditional.”
“Additionally, this type of process is predicated on receiving various regulatory approvals… [and] there is no assurance that they will be received.
“We are continuing to work to implement the business plan and meet our targets,” Spacecom said. “These include… the upcoming launch of our innovative Amos-17, [which] will service Africa, Europe and the Middle East. We are also continuing with other plans, including the construction of a new satellite to be placd in our 4 degrees West orbital position hotspot.”

Mystery satellite constellation customer plot thickens at lasercom terminal builder Mynaric new investment

Credit: Mynaric AG
PARIS — Startup laser communications terminal builder Mynaric AG said it has received a commitment for an investment of 11 million euros ($12.6 million) from a lead investor in a satellite constellation likely to use Mynaric products.
Neither the investor nor the constellation were identified, but Munich-based Mynaric confirmed they are part of the same project for which Mynaric signed an MoU in October for around 1,000 laser terminals.
That MoU, for a constellation of around 300 satellites, was expected to transfer to full-contract status by January, but apparently has not yet done so. Mynaric, whose equity trades on the Frankfurt Stock Exchange, would be obliged to announce the deal as a material event.
The company had said that the 1,000-terminal order would occur after an initial demonstration mission.
Mynaric said it will receive 11 million euros in cash from the unnamed investor, which will then own about 6.9% of Mynaric’s equity.
At 55 euros per share, the new investment values Mynaric at 160 million euros, which is 38% above where it was trading on March 15.
Following the transaction, Mynaric will issue a share-capital increase of 200,000 shares, to be offered to a single institutional investor.
The new investment comes less than a week after Mynaric announced that Bulent Altan, a former SpaceX executive and veteran of SpaceX’s 4,000-satellite Starlink constellation, joined Mynaric as co-chief executive: https://bit.ly/2J9lL0k
Nothing in Mynaric’s statements about the constellation suggest that SpaceX is the future customer. OneWeb, a startup constellation operator whose first-generation spacecraft are not equipped with inter-satellite links, is a possible future Mynaric customer, as is LeoSat, planning a constellation of high-speed broadband satellites for corporate and government communications.
On the same day Mynaric announced its new investor, OneWeb said it had raised an additional $1.25 billion from several of its original investors: https://bit.ly/2Hv8IEG
Mynaric board member Wolfram Peschko said the new funds will be used “to accelerate serial production of Mynaric’s product portfolio and for continued development. The company started serial production of optical ground stations in H2 2018 and expects to do the same with its product for airborne applications in H2 2019. Currently, Mynaric is the only supplier globally with a full product portfolio supporting laser communication applications on the ground, in the air and in space. The company floated on the Scale segment of the Frankfurt Stock Exchange in Fall 2017 and has raised a total of EUR 50m growth capital to date.”

OneWeb raises additional $1.25 billion from SoftBank, Grupo Salinas, Qualcomm and Rwanda

Credit: OneWeb
PARIS — Startup broadband satellite constellation operator OneWeb said it has raised $1.25 billion in new capital from existing shareholders SoftBank Group Corp., Grupo Salinas, Qualcomm Technologies and the government of Rwanda, bringing total equity financing to $3.4 billion.
The announcement did not include any mention of OneWeb backers Virgin Group, Airbus and Hughes, which may have been part of an unannounced funding round of several hundred million dollars completed before the Feb. 27 launch of the first six OneWeb satellites.
OneWeb Chief Executive Adrian Steckel made passing reference to these investors in statements before the launch, saying they had “just re-upped their commitments.”
As currently configured, OneWeb is a 650-satellite constellation of low-orbiting satellites offering broadband connectivity in areas of the world that are now unserved or poorly served.
The inability of the company to secure project finance loan guarantees from Bpifrance, the French export-credit agency, has raised questions about whether lead investor SoftBank remained as committed as it was in the past.
Also of concern was the fact that OneWeb had not secured commitments from prospective customers for large chunks of OneWeb capacity — a commitment that a loan-guarantee source like Bpifrance would want to see before backing a project with a capital cost estimated at $4 billion to $6 billion.
The March 18 announcement may have quieted those concerns. OneWeb did not detail the level of investment of each shareholder. But Steckel said the latest ground “makes OneWeb’s service inevitable and is a vote of confidence from our core investor base in our business model and the OneWeb value proposition.”
The first six OneWeb satellite, all reported healthy in orbit, are migrating from their carrier rocket’s drop-off point to their final orbital positions at 1,200 kilometers in altitude. Once they arrive there and begin broadcasting for at least 90 days, the company will have secured International Telecommunication Union (ITU) registration of its operating frequencies — a key milestone that OneWeb had hoped would unlock further investor commitment.
OneWeb’s spectrum rights have long been considered the company’s key asset.
Marcelo Claure, chief executive of SoftBank Group International, said in a statement about the financing:
“OneWeb has extended its first-mover advantage and is on track to become the world’s largest and first truly global communications network. At SoftBank, our aim is to invest in transformative companies at the leading edge of technology disruption.
“OneWeb’s potential is undeniable as the growth in data from 5G, IoT, autonomous driving and other new technologies drives demand for capacity above and beyond the limits of the existing infrastructure.”
With the continuous quality improvements in high-throughput broadband satellites operating in geostationary orbit, it is unclear how much of a service advantage OneWeb will have in less-developed countries once the constellation is operational in 2021-2022.
Also still to be tested is whether OneWeb’s architecture is relevant to 5G, IoT and the coming autonomous-vehicle market.
OneWeb’s first six satellites were built at partner Airbus Defence and Space’s Toulouse, France, facility as part of a 10-satellite lot.
The remaining satellites are to be built at two production lines housed in a new factory in Exploration Park, Florida, which is scheduled to be open in time to produce satellites in volume by the end of this year.
The OneWeb statement referred to the “near-completion of our innovative satellite manufacturing facility,” and said the company would be launching 30 satellites a month starting in the fourth quarter.
OneWeb has contracted with Russia’s Glavkosmos and Europe’s Arianespace launch service providers to fly 20 Russian Soyuz rockets carrying more than 30 OneWeb satellites each.
Virgin Group Chairman Richard Branson said after the Feb. 27 launch that OneWeb had “already raised over $2 billion. That is sufficient money to see it to profitability and it should be relatively easy to raise further money.”

Global Eagle contends with Boeing 737 MAX, India’s Jet Airways issues, explains maritime deals

Global Eagle’s 2018 performance was hurt by concessions it made in maritime cruise line contracts and delayed entry into service of aircraft. Credit: GEE
PARIS — The grounding of the Boeing 737 MAX aircraft worldwide and the financial distress of India’s Jet Airways are two issues that aero- and maritime connectivity and content provider Global Eagle Entertainment (GEE) would not have predicted at the beginning of the year.
GEE said neither is likely to prevent the company, which by mid-2019 will have laid off 25% of its work force and shut down eight facilities, from reaching cash-flow break-even by the end of this year.
GEE, which has focused its connectivity business on single-aisle aircraft, said it has little exposure to the grounding of the 737 MAX fleet in part because customers pay regardless of whether the planes are in service.
Of its 1,022 aircraft connected to its service as of Dec. 31, only 26 are 737 MAX, with another six awaiting to be put into use.
Many of these planes are operated by customers paying GEE on a set monthly basis and “are not dependent on flight segments operated or on passenger sessions,” GEE Chief Executive Josh Marks said in a March 14 conference call with investors.
Another 40-50 737 MAX aircraft had been expected to enter service with GEE’s connectivity service this year, nearly one-third of the total aircraft installations the company is forecasting for 2019.
“As of today, we have not been informed of any changes to shipment dates related to the Boeing line-fit program,” Marks said. “We’ve been told to maintain our expectations about equipment delivery and equipment shipments.”
Jet Airways issued this statement on March 14 denying that India’s civil aviation authority has asked the airliner to cease accepting advance bookings.
GEE had told investors it had begun installations on 70 Jet Airways planes and was poised to be the first to crack India’s in-flight-connectivity market following regulatory approvals.
But Jet Airways in recent days has been fending off issues related to non-payment of aircraft leases, creating confusion about how many planes — and which ones — will continue in the Indian operator’s fleet.
GEE has an operating license for the Jet Airways service and has purchased satellite bandwidth to handle the business. But its customer’s financial restructuring makes it risky to continue with full installation.
“Given the ongoing conversations between Jet Airways and their aircraft lessors, it is important for us to confirm which aircraft are going to be in the fleet long term before we begin putting antennas onto aircraft to complement the in-cabin systems that are already installed,” Marks said. He expressed optimism that Jet Airways would work through its issues and said GEE would continue its ongoing in-flight-entertainment service to Jet Airways as the connectivity issues are resolved.
Marks told investors that the equipment giveaways and other freebies that connectivity providers offered to customers in the past, and which resulted in bad financial performance, are a thing of the past throughout the industry.
But he said GEE was forced to include unplanned sweeteners to secure the renewal of its contracts with Norwegian Cruise Lines and Disney Cruise Lines in late 2018.
For both deals, GEE applied contract rates and service credits retroactively, to the beginning of October, even though the contracts were not signed until late November.
These concessions reduced cruise-line WiFi revenue by $3 million in the last three months of 2018 compared to the previous year.
Given the renown of these two customers, GEE has no regrets.
“We had to do what we had to do in maritime to get the long-term visibility in those contracts,” Marks said. “There was fierce competition for those flagship accounts. We got there by… making investments in those customers and now we’re in a position to benefit over the long term.”
A new antenna and a newly installed Air France fleet went into service in January. Credit: GEE
GEE’s long-awaited connectivity deal with Air France entered service in January, with 15 planes activated as of mid-March. GEE had said it hoped customers flying intra-European routes on Air France would notice the difference in performance between the high-throughput GEE service and competitor Inmarsat’s lower-bandwidth Global Xpress, which has landed Lufthansa as a customer.
A new three-axis antenna, which GEE says functions well from the equator to high latitudes, “is now in commercial service, operating with reliability and high throughput,” Marks said, a development that GEE hopes will further accentuate the throughput advantage.
GEE said it spend more than $100 million in 2018 on securing bandwidth.
Chief Financial Officer Paul Rainey said an unspecified number of planes scheduled for installation in late 2018 had been delayed to the first half of 2019, leaving the company with more bandwidth than it needed.
That cut into connectivity revenue and profit margins.
The company’s latest work force reduction, announced in mid-February, covered 200 people and will cost $4.5 million in severance, most of it to be paid in the first half of 2019, GEE said. In addition to the eight facilities that were closed in 2018, another 10 will be shut down in 2019.

Rocket-builder Avio posts double-digit revenue, profit increase with peak in government development funding

Avio says its Vega light launcher now generates more revenue than the company’s work on the Ariane 5 and future Ariane 6 heavy-lift rockets. Development as a percent of total revenue is expected to drop as both the upgraded Vega-C and new Ariane 6 vehicles enter service starting in 2020. Credit: Avio
PARIS — The world’s only pure-play, publicly traded launch-vehicle manufacturer, Avio SpA, reported double-digit increases in revenue and profit in 2018 with a peak in government-financed work on new rockets.
For Avio, the question is whether demand for its Vega small-satellite launch vehicle and for the heavy-lift Ariane 6, which uses Vega’s first stage as its strap-on boosters, will be sufficiently strong to offset the inevitable decline in government development funds.
Avio in 2018 reported revenue of 388.7 million euros ($445 million), up 13% from 2017. EBITDA was 11% of revenue, and net profit, at 25.8 million euros, was up 18% from a year earlier.
Avio divided its revenue into business dedicated to Ariane, and that coming from Vega, for which Avio is prime contractor. In recent years, Ariane-generated revenue declined relative to Vega as Vega entered operations.
Vega is expected to fly four times in 2019. Two of the flights will carry the UAE’s Falcon Eye 1 and Falcon Eye 2 optical surveillance satellites. Credit: Avio
The Vega share has been climbing faster than the Ariane share and in 2018 accounted for 53% of Avio revenue, compared to 38% for Ariane. The remaining 9% of Avio’s business is from tactical and “other” activity.
Avio said development, meaning Ariane and Vega-related work funded by the 22-nation European Space Agency (ESA) and the Italian Space Agency (ASI), accounted for 38% of total revenue in 2018.
The upgraded Vega-C rocket is expected to make its first flight in early 2020. Ariane 6’s inaugural flight is scheduled for the second half of 2020. Development funding for both vehicles will be winding down.
One unknown on the development side is what additional work Avio might win from programs decided at the triennial ESA ministerial conference, scheduled for  November.
The company’s 2018 performance was good enough for Avio to propose a 15% increase in its proposed dividends to shareholders, to 11.5 million euros, a 45% payout ratio. In addition, the company’s board has approved a potential buyback of up to 10% of Avio’s publicly traded shares.
“This is a picture of a business that grows and generates cash,” Avio Chief Executive Giulio Ranzo told investors March 15. “We have the right product in the right place.”
From a strict market-positioning viewpoint, Vega and Vega-C occupy a middle position between the plethora of small launchers now in development — and one, the Rocket Lab Electron, in service — and the larger rockets, including Ariane, the SpaceX Falcon 9 and others.
The small, dedicated launchers can offer orbital drop-off points tailor made to their individual customers. The larger rockets are less able to do that, but can offer a lower per-kilogram cost.
“We can do both,” Ranzo said of Vega — launches dedicated to single satellites weighing several hundred kilograms, and those with multiple small satellites using Vega’s Small Spacecraft Mission Service, to make its debut in August.
Ranzo cited the many market forecasts showing the galloping demand for small satellite launch capacity for telecommunications, Earth observation and other missions. The same assessments say the market for large rockets is flat at best, if not declining slightly in the coming years.
The Vega-C’s main P120 stage is also used for the Ariane 6’s strap-on boosters, meaning Vega profitability is closely tied to Ariane 6’s success. Credit: Avio
As a rocket program, Vega is protected from the demand slide for large telecommunications satellites. But as a company, Avio is not. Much of its business model depends on generating material economies of scale by producing the P120 Vega first stage in high volume because of its use as the strap-on booster for Ariane 6.
Estimates of the number of Ariane 6 rockets to be launched per year starting in 2023 have been declining with the precipitous drop in demand for geostationary-orbit telecommunications satellite.
The geostationary-orbit market is sure to recover somewhat, if only to replace highly profitable satellites now in orbit. But whether this launch market will ever return to its previous volume of 20-25 satellites per year is uncertain.
The lack of clarity in the future market is one reason why Europe’s Arianespace launch-service provider, which sells Ariane and Vega rockets, has not yet made an order for the first batch of Ariane 6 vehicles.
Avio sees the Vega rocket as ideally suited for the current growth of small low-orbiting satellites, avoiding the constraints of smaller dedicated rockets and the ride-share options of larger vehicles. The Vega Light included here is notional: No production decision has been made. Credit: Avio
Ranzo noted that the small-launcher market is now bursting with up to 100 new rocket-development programs. How many will make it to production, and of those, how many will make a successful business, is anyone’s guess.
Government demand in the United States and China could permit several small vehicles to survive in those nations, enabling them to attack the global commercial market with a durable anchor customer.
There is no such anchor customer among European governments, which are much less active in space than their U.S. and Chinese counterparts.
Avio still doubts the market for very small rockets, and is not convinced by Rocket Lab’s Electron
That hasn’t prevented a half-dozen small-launcher proposals from popping up in Europe.
Avio has thrown its hat into this ring with Vega Light, designed to carry up to 300 kilograms into a low Earth orbit, and has talked with Portuguese authorities about their proposal for a spaceport in the Azores.
But despite its assertion that it could build a Vega Light for very low cost, Avio is unclear that such a vehicle can be profitable.
“The business model is radically different than that for larger rockets,” Ranzo said. “First, because the customers are not as rich. Second, the market is maturing now and it’s not easy to understand whether the business case is clearly positive.”
He agreed that the growth in small satellite production for commercial business could be a complementary market to what Vega can serve without eating into Vega’s business.
But still…
“It is a very complex case, the one for min-rockets,” Ranzo said. “The only one who has started operations is Rocket Lab, with Electron. it has flown so far three times, with a load factor of 5%. The problem is, if you fly forever at a load factor of 5%, you never make money.
“We’ll do a min-rocket if we find a way to make money out of it. Otherwise we won’t. It’s a simple as that. We have built a rocket from scratch before so we know what it takes. We can be faster to market. But we also want to be safer to market. We don’t want to drag a listed company into a non-existent business.”

French space agency to co-finance, with industry, constellation of high-resolution imaging satellites

CNES Chief Operating Officer Lionel Suchet. Credit: ESA
PARIS — The French space agency,CNES, expects to select in April an industrial partner to build a constellation of 50-centimeter-resolution Earth imaging satellites to collect global digital terrain elevation data and stimulate French industrial competitiveness.
CNES’s board of directors approved the project, called CO3D, in which CNES would finance a large minority stake but manage the procurement so that it is purchasing digital-elevation products, not satellites.
Satellite prime contractors Airbus Defence and Space and Thales Alenia Space, both of which are building their own Earth observation constellations with major design differences, are bidding for the CO3D work.
But CNES has concluded that neither Airbus’s four-satellite Pleiades NEO 30-centimeter ground resolution system nor the BlackSky satellite constellation being built by a joint venture of Thales Alenia Space, Telespazio and Spaceflight Industries fits the CO3D bill.
Thus a new development whose twin goals are to qualify a small — 200-300-kilogram — satellite design to collect 1-meter-accuracy terrain elevation data on sites of interest to the French government, and to give French industry a new, commercially competitive product line.
Assuming CNES likes what it sees from the competitive procurement now under way, a winning bid will be selected in April, with the first satellites to launch in 2021 or 2022.
Lionel Suchet, CNES’s chief operating officer, stressed that the winning bid must demonstrate a business model that has staying power beyond the French government’s imagery demand.
What’s the genesis of the CO3D project?
It’s the result of a reflection by CNES on the evolution of the Earth observation sector, which is moving toward demands for repetitive coverage, temporal resolution, and the fact that we need innovative systems. We need to get industry to take more responsibility as the landscape evolves.
The current Pleiades system [two high-resolution optical satellites for military and commercial use, in orbit and commercialized by Airbus], was purchased outright by the government. We decided to try to change that traditional procurement path and started thinking about CO3D two or three years ago.
CO3D is first an advance in Earth observation, and second an innovation in the role of government agencies with respect to the private sector.
It’s not a classic public-private partnership, but a system where we purchase some experimental innovations, and we purchase a product.
The product you will purchase is the digital terrain model?
Yes, our first objective is a digital surface terrain model with 1-meter accuracy. That has no equivalent today.
The second objective is to promote innovation in space technology, both on board and on the ground. This is our role as an agency, to pull innovation higher.
Finally, we want to give industry a capacity to build observation satellites for a very low cost. The technology available today allows us to develop such systems much more inexpensively than was possible several years ago.
Airbus Defence and Space is building four Pleiades Neo satellites. The first two are scheduled to launch in 2020, with the second pair in 2022. Specifications: 30cm panchromatic resolution & 14-km swath at nadir, 6 multispectral channels, 10-year service life at 620 km orbit, daily revisit at 30 degrees off nadir, twice daily at 46 degrees off nadir. Credit: Airbus
We’re asking industry: Are you able to apply innovation to produce low-recurring-cost satellites providing a digital surface terrain model of interest to the government — government in the larger sense — for security and development?
If you in industry think you can, and you can develop an associated business model with it, we’ll put X amount of money on the table to to purchase the digital surface terrain models on areas that interest us, and we’ll purchase the in-flight R&D demonstration that shows us we can to do that.
So CNES will not own the system?
Correct. We are not buying the system. It remains the property of the industrial prime contractor. The winner must demonstrate a business plan that allows the continued development of the system — the satellites and the associated ground segment. We then will have succeeded in pushing innovation to a higher level, permitted industry to qualify a new technology, and we’ll have a digital surface terrain model for areas of interest.
What amount could you invest to reduce the market risk for the winning team?
We are purchasing R&D work — an in-orbit demonstration in fact — and we are ready to pay a certain portion of that cost. For industry, the cost of investment is tied to what they want to do with the system.
For example, the industrial team might want to build a system that is much more complex than what we would need for our purposes and to invest much more, or decide to invest a lot less, for a system that covers our needs and not much more.
In any event, the industrial share will be more than 50% of the total system cost.
Surely you have an idea of the total system cost?
We do, but because the call for offers is still ongoing, I don’t want to cite figures. We transferred the project to our board of directors for their go-ahead approval, which we have now received, so we move forward and choose the winning bidder.
And if these first phases are positive, we can go to the end. Development will be incremental. But until we have chosen the winner, I can’t disclose detailed cost information.
Will the final cost to CNES depend on the industrial winner’s plans for the system?
Correct. This represents a major evolution in our way of proceeding with this kind of project. For example, our call for bids was extremely light on specifications to industry. We want an innovative design, and satellites of low recurring cost. We did suggest a range for the constellation’s size. Importantly, we need a business model associated with it to show this is not just for our needs but that can be taken further.
Those are about the only requirements we have set.
There are the current Pleiades dual-use satellites; the CSO satellites for the military only; Pleiades NEO, four 30-cm-resolution satellites being built by Airbus; and the LeoStella joint venture in BlackSky Earth observation satellites composed of Thales Alenia Space, Telespazio and Spaceflight Industries.
Despite these systems, CNES sees a gap?
Correct. The ability to make native digital surface terrain models with meter-level accuracy, and to do it quickly — to produce digital terrain products with a minimal delay — and you need numerous satellites and the ability to evolve toward a highly reactive constellation with rapid revisit over a given area.
Having a lot of satellites is not part of the CNES requirements at the start. But this program will give industry the ability to add satellites quickly if the business model justifies it.
The CO3D satellites will need to have a ground resolution of 50 cm?
To get digital terrain models at a 1-meter accuracy you need an imager with about twice that resolution, so yes that’s about what is needed.
Pleiades NEO doesn’t do it for you even if a satellite or two is added?
No, that’s something different.
And the Thales Alenia Space JV with Spaceflight isn’t quite it either?
No that does not exactly respond to our criteria for this project. But industry has the right to join forces with others for this project if that reinforces their proposal, and that could include partnerships.
The Thales Alenia Space/Telespazio/Spaceflight Industries BlackSky constellation features 1-meter-resolution satellites to start and focuses on high revisit rates from an inclined orbit offering 40-70 passes per day over major areas of interest. Credit: BlackSky
What we want, as an agency working with public money, of course, is that the major innovations of the system come from France and that French industry benefits. But there is nothing preventing, for the whole system, partnerships. This whole sector is diversifying at a high speed, so why not?
When will you select an industrial partner?
We hope to select a winner in April, so very soon. Then the idea is to have systems able to fly in 2021 or 2022.
A fairly tight schedule then.
One of the objectives is to be highly reactive, to have systems that are low cost, meaning that can be developed fairly quickly. I think the direction we’re going in here is supported by the entire space ecosystem in France, and elsewhere.

ESA opens its door to European micro-launcher and start-up spaceport proposals

ESA Launcher Director Daniel Neuenschwander. Credit: ESA
PARIS — The European Space Agency (ESA) will propose to its governments late this year that the agency offer assistance to individual ESA nations planning their own spaceports and micro-launchers.
The goal: “to nurture commercially viable ideas from European industry to open up new space transportation markets. This program would support proposals for privately led privately funded space transportation services,” ESA said.
The decision comes at a time when ESA’s own rockets — the new Ariane 6 heavy-lift vehicle and the light-lift Vega C — need all the help they can get in finding a profitable way forward in a rough commercial market. Ariane 6 is scheduled to launch first in mid-2020. Vega C was recently delayed from late this year to early 2020.
The micro-launcher proposals also come at a time when the world appears awash in new small-launcher developments — as many as 100 by one count. Only a few are likely to survive.
Daniel Neuenschwander, ESA’s launcher director, described what the agency has in mind with micro-launchers. He minimized the Vega-C delay, saying he’s confident of a Q1 2020 flight.
What’s ESA’s goal with the micro-launcher sector? Britain, Norway, Portugal, Spain and Sweden all want their own national spaceports.
The main menu of course we are proposing to our ministers in November is the transition to Ariane 6 and Vega C. We will work to enhance Ariane 6 and Vega-C competitiveness. We also put on the table the development of the Space Rider [reusable unpiloted shuttle to LEO].
The Space Rider’s development will be on the table for ESA governments to approve in November. Credit: ESA
And there is a small investment, but important in content, for ESA to support competitiveness and innovation with new space transportation services on behalf of our member states.
So there are two points: to support privately led commercial space transportation services — I stress, commercially led — where micro-launchers might be one topic. The market will decide which projects survive. We’ll support initiatives such as providing expertise on technology maturation.
The second point is to support ESA member states that want to develop either national spaceports or test infrastructure related to space transportation. As long as it’s in a member state’s territory, ESA is ready to support this.
What kind of support can you offer?
It can be co-funding, expertise, in-kind resources. For example, if you want a spaceport there are safety and other topics you need to understand. And we want to facilitate access to ESA’s Business Incubation Centers.
Why? The world doesn’t need another small rocket.
We are doing it because we are convinced we should support our member states in developing their own capacities. On the one side, their industries; on the other side, their national infrastructure.
Ultimately space transportation — over the very long term — will be as widespread as air transportation is today. It is not the objective now, but ultimately this will be the case, so we better start now.
Does ESA tell its governments to beware launcher investment given the dubious business model?
The main objective — the strategic objective — is independent access to space. It’s a high-level request from ESA ministers and EU ministers. At ESA, we guarantee this independent access to space — with Ariane 5 and Vega and Soyuz at CSG today, and tomorrow with Ariane 6 and Vega C.
This is our main topic, the center of our work. What we are speaking about here is just an offer of expertise. It’s important that ESA give equal treatment to all our member states. For example, we cannot provide a service to Norway that we would refuse to Portugal, and vice versa.
So we need a framework under which we provide expertise in the same way to all member states, the same content to each of them. Either they buy it or they don’t buy it. We’re here to provide technical and programmatic expertise — not to do market assessments for the member states or market participants. That is not our job.
There’s an emergency now confronting Europe’s access-to-space model. And yet you have time to support other vehicles…
Yes, the European model is challenged. Ariane 5 is challenged on the commercial market today. That’s a fact. We did some investigation in end 2018 on the benefits of the European space-space-access model and the benefit is evident. What we are proposing are activities that will allow us to stick to this model.
It’s true that the competitive, global commercial launch market is under more pressure than a few years ago. But it’s an opportunity for us to restructure the European sector to get even leaner than we are today. This is what we are striving at.
Priority one is European autonomy for access to space, and for this we have the ESA-developed launchers. This will be a main topic in Seville [at the November ministerial conference]: that we assure the proper market transition of Ariane 6 and Vega C.
But our ministers in 2016 decided on the initiative for lightsats, to try to use 100% of the space under the fairing for institutional launches. This was our aim, and also a way of strengthening the overall coherence of flying European, giving incentives to European governments to fly European.
ESA remains an agency for its member states, and if its member states need something to develop a national infrastructure, we will help them. And this we will continue to do — just like we offered support to Spain for development of the Seosat Earth observation satellite.
The Earth observation sector was not facing a four-alarm fire. The commercial launch-service sector is. And any small satellite that goes elsewhere is a satellite that Vega C doesn’t get.
Yes, but let’s be clear: A 10-kilogram satellite will not change the business case for Vega-C.
These don’t usually travel alone, but as parts of constellations.
Of course. But we are here to support our member states overall. A few countries are assuring — for ESA and the European Union — independent access to space for this continent. This they will continue to do. But you cannot close your eyes to all evolutions.
We will not put a lot of financial means into it. But if somebody from an ESA member state knocks on my door I will offer support.
Do you also say: Launchers have always been a bad business in terms of return on invested capital, and having new vehicles popping up doesn’t improve the business case? Does that conversation happen?
I am not preaching anything. If I get a question, I reply to it.
You have talked about some major milestones in 2019, staring with the critical design review of Vega-C.
Yes, and that has been completed.
Why was the launch was moved to early 2020 from late 2019?
The Vega CDR board agreed that the maiden flight would take place in Q1 2020. We will announce a precise date after two milestones.
One is the Vega SSMS [Small Spacecraft Mission Service] proof-of-concept flight, which is planned for August.
The is that while the CDR was very successful for the launcher, for the mission part there are a few points to be looked into.
Once we have these two clarifications, we will fix a date. We had said end-2019, now it’s Q1 2020. It’s not a big deal.
In our 2019 manifest we have four Vega flights, which is a lot. We need to have the combined tests [of Vega C] before the maiden flight. It’s a huge challenge from an operations point of view. The Vega team took a bet that they could use the same launch pad for Vega and Vega-C. The challenge is to have the right compromise between running operations of Vega and the proper time to do the combined test for the Vega C maiden flight.
So the elements that need to be nailed down are not linked to the Vega C launcher?
No, they are linked to the mission. To develop a launcher you need to integrate it and operate it. For operations there are some constraints and we need to look into that — what’s happening at the launch site before the payload is delivered to orbit. But the CDR was really successful and it’s perfectly normal that we want to work on some specific points.
The French space agency, CNES, is managing development of the new Ariane 6 launch pad under a 600-million-euro ($686 million) contract with ESA. This image dates from February 2019. Credit: CNES
For Ariane 6, CNES is building the new launch pad. From the photos it appears to be on schedule. Is it?
Yes, I can confirm that.
What is the next milestone for you for 2019 to maintain the mid-2010 inaugural flight?
To get the keys of ELA-4 from CNES before the November ministerial. That is an ambitious objective. But today everything looks positive, so I am confident we can do it. The more time we have for the combined tests, the better it is.
The Prometheus low-cost engine is designed to be 90% less costly than the current Ariane 5 first-stage engine. Will that program be continued with fresh funding at the ministerial conference?
Prometheus is well on track. We just passed some technical milestones. What was decided at the 2016 ministerial conference was that we would get Prometheus development funding until the first test firing.
Now we’ll come to the ministers with a Phase 2 proposal. We need further maturation of the system and then we start to produce Prometheus. The first objective is to have a lower-cost engine. The second is to allow Europe to make an informed decision on whether we stay with the cryogenic line, or move to methane.
For the Phase 2, we will propose a longer roadmap in terms of what activities could be concluded on reusability. One project, Themis, is proposed by CNES as a reusable rocket stage and we are looking at it.