Kirk Pysher. Credit: Euroconsult

PARIS — Either he was blindsided or he deserves an acting award.

International Launch Services (ILS) President Kirk Pysher on Oct. 9 discussed the company’s near-term prospects, the state of Proton rocket production and the competitive landscape, with acerbic digs at SpaceX, Arianespace and Blue Origin, and hopeful remarks about insurance rates for ILS launches.

Pysher was speaking at Eutelsat headquarters here just after the liftoff of the ILS Proton mission carrying Eutelsat’s 5 West B telecommunications satellite and the first Mission Extension Vehicle, MEV-1, for Northrop Grumman’s SpaceLogistics subsidiary.

Proton’s Breeze-M upper stage fired five times over 15 hours and 54 minutes before releasing the two satellites — both platforms were built by Northrop Grumman Innovation Systems and stacked one on top of the other under the Proton fairing — into a super-synchronous transfer orbit at 65,000 kilometers in altitude.

ILS released a statement from Pysher confirming the successful separation of the payloads. It was the first time two commercial ILS satellites rode on a single Proton.

Four hours later, Russia’s Roscosmos space agency and ILS owner Khrunichev State Research and Production Space Center announced Pysher’s resignation.

John Palme, ILS’s chief operating officer, was named interim president.

Pysher did not immediately respond to requests for comment about his departure. During the interview he referenced upcoming industry conferences he expected to attend and in all other respects gave the impression of someone who would be in his job for some time.

Here are excerpts from the interview:

Is this the last ILS mission? Is ILS going to be moved into Glavkosmos or otherwise becoming an all-Russian entity?

I don’t understand where ideas like that come from. ILS is still owned by Khrunichev, the majority shareholder. Glavkosmos hasn’t taken over any of the shares, or the ownership.

What has happened is that two of the three Russian ILS board seats have now been filled by Glavkosmos. That’s how Glavkosmos came into the picture.

But ILS will remain the same going forward and will be signing contracts with customers. There is no proposed change to that structure.

So ILS will remain as a U.S. company?

An independent U.S. company. We are not a subsidiary of Khrunichev. We are an independent company, and Khrunichev is the majority shareholder. We are incorporated in the United States, in Delaware.

What is the near-term future for Proton as Russia readies the introduction of the Angara rocket and phases out Proton?

Khrunichev is building Protons and will continue to build Protons until there is a suitable replacement. They are planning Angara 5 to be on line in 2023. What that means is that the Federal program — the Russian MoD and civil government programs — will be flying Angara 5. Commercial Angara 5 missions probably won’t start until 2025.

The first few Angara 5 flights are certification flights. Once it is fully certified, commercial sales will take place. So 2025 is the earliest data for commercial Angara 5, out of the Vostochny spaceport.

There are opportunities for commercial Angara 5 out of Plesetsk [the northern Russia spaceport], but those are limited because the performance isn’t what it needs to be. But the Angara 1.2 out of Plesetsk is something that we’re marketing.

What does ILS’s board see as the near-term future given the state of the market and the competition? What’s on your manifest?

As of today, we still have our multi-launch agreements with Eutelsat and Intelsat, as well as a mission with KARI, Kompsat-6, for the Angara 1.2. And there is another contract which I am not at liberty to talk about.

This is a commercial Proton mission that is unidentified?

Yes. For 2021.

Intelsat and Eutelsat have told you they consider their multi-launch agreements as still active?

Yes.

Any other contracts on the manifest?

No. You asked how our board views the market. We see it moving away from larger GEO-orbit satellites to smaller, EP [electric propulsion] satellites that want to share launch opportunities. We are also seeing ride-share opportunities. The issue is how do we address all these things.

We need to be flexible and find solutions. When we aligned ourselves with Glavkosmos, that was part of the reason. With them we have Soyuz, Proton, the Angara vehicles. We should be able to find a solution among those vehicles for whatever is out there that needs to be launched.

And when we throw in the new products that Russia is developing — the Soyuz 5, as part of a replacement for the Zenit rocket but it looks to be more a medium-lift vehicle — that’s what our plan is, to be able to handle whatever the market throws at us.

The market is really uncertain now. We’re hearing about people building satellites that are so big that they might not fit in any of the available launches.

You know 2018 wasn’t a good year for space insurance underwriters, and 2019 looks no better given the low premiums and recent rocket and satellite failures. Premiums have gone up sharply. You’ve had issues with insurers in the past: http://bit.ly/35ipnUN You had them over to the Khrunichev factory in July. Have you made any headway?

I would say yes, we have. When they visited the factory they were able to actually see what we have been telling them about. They had been complaining for years about a lack of first-hand viewing of the processes. Overall it was a very good experience for the underwriters.

Our problem with insurance is not just the rates applied to ILS Proton missions, it’s the estimates about what rate will be that are given to customers when they are going through the process of trying to close their business plans.

You mean they might discount ILS as an option even before getting a formal insurance proposal?

Yes, based on estimates they are getting for launches that are two and one-half years out. We’re trying to address that aspect.

Since the Vega failure [in July, of the European Vega smallsat launcher, carrying a UAE military observation satellite insured for $400 million], we have heard that insurance rates for our competitors have doubled.

I know that ours have not doubled. So we have closed that differential a little bit. I think we are making progress. Our successful launch today will help with that. By the end of the year we should have 20 Proton successes in a row. Our five-year moving average is a 96% success rate.

There are Federal missions on Proton before the end of this year?

Yes, a couple are planned.

If insurance rates are going up, and underwriters are more skittish, that can’t help Proton.

It’s really the differential — what competitors are charged versus what we are charged — that we want to close. We believe we are able to do that.

The commercial launch-service market addressing large payloads does not have much visibility these days.

I don’t think any of the launch companies serving the global satellite operators are healthy right now.

 Blue Origin seems healthy enough.

Blue Origin has been in business for 19 years and they have made a few hops up and down on the Earth’s surface. You can do that when you are a billionaire and sinking a billion a year into the business. Good for him. But that doesn’t make the rest of us healthy.

Look across the board — Space Systems/Loral, Airbus, Thales, everybody, these are not healthy conditions. Arianespace needs subsidies from ESA to help sell Ariane 6.

You didn’t mention SpaceX.

There was a documentary recently about Silicon Valley companies resisting IPOs because that would force them to open their books. I see [NASA Administrator Jim] Bridenstine finally kicking Elon Musk [in a tweet] for bragging about their stainless-steel Starship.

The Proton rocket lifts off on Oct. 9 carrying the first fully commercial dual-passenger payload for ILS. Credit: Roscosmos

So your owners have said they still like the idea of having a U.S. company handling Proton and then navigating the commercial transition to Angara launches?

That’s the plan, yes.

You had talked previously about lowering Proton prices to compensate for the fact your customers were paying double the insurance premium. Have you done this?

Yes.

You know what the competition is offering and you can meet these prices?

Without a doubt. We can meet them and in some cases beat them.

It’s not easy to beat the SpaceX prices. You’ve seen them: $50 million to launch a good-sized satellite to GTO.

Here again, we’re talking about competing against billionaires. Neither one of them [SpaceX and Blue Origin] have to make money. Just do the math: SpaceX has got 6,000 U.S. employees, right? They are not making money on selling launches, some of them lower than $50 million.

Lower than $50 million for a GTO?

Yes. We’ve seen Arianespace, too, go down to price points that are completely unprofitable.

For Ariane 5 or Ariane 6 vehicles?

Ariane 5.

You’re referring to the Ovzon-3 contract that went to Arianespace for an Arianespace over SpaceX? SpaceX wasn’t happy with that.

They should have gotten upset.

Did you bid on Ovzon-3, a 1,500-kilogram satellite built by Maxar?

Yes and we would have handled that as a dual launch.

So ILS has access to Proton rockets in the next few years to conduct its normal contract bidding life?

Yes. There is no specific number of Protons remaining to be launch. The idea is that at some point we have to bring Proton launches to an end. There has to be a transition to Angara 5. And you can see by [Roscosmos Chief Dmitry] Rogozin’s statements and President Putin’s statements: Proton will continue to fly until there is a certified replacement.

Can you bid on the six C-band satellites that Intelsat and SES have promised to launch, built in the United States, if they get regulatory approval for their C-band spectrum auction?

Yes. No one has told us that we cannot bid.

Did you bid on the seven SES mPower satellites? They will be launched on two SpaceX Falcon 9 rockets.

No, there was a compatibility issue with that.

Your launch today had two Northrop Grumman satellite platforms stacked under the Proton fairing. Given the market’s move to lighter satellites, how can you do this more often?

We are working to be able to launch some of the Russian Federal missions with a commercial ILS mission. People have thought of this before, but the market may not have been ripe for it. Now it is. The Federal satellites are always about the same size and the same performance, so we pretty much know what excess performance we have on the Proton.

It’s not a done deal yet, but it’s being worked and we are notifying them [the Russian government] of opportunities that exist. We have Roscosmos behind us. The harder part is the Ministry of Defense.

But you could launch civil missions for Russia’s RSCC satellite operator along with an ILS satellite.

A: Correct. Roscosmos and all the suppliers have been tasked by President Putin to start making money, to figure out how to do it.

Did you bid on Inmarsat’s GX Flex, with the new Airbus OneSat platform?

We did not.

And the two Spanish military telecom satellites?

We go after all we can. That will be a challenge for us versus Ariane. But there are several satellites coming up for launch decisions this year.

Where are Proton prices today compared to five years ago?

We have had a 40%-50% price reduction over that five-year period. Look at SpaceX’s $50 million, for commercial customers. That’s what we have to compete against. The difference is I do not have 6,000 California-based employees.

How was today’s launch contract negotiated?

It was part of the Eutelsat multi-launch agreement.

So Eutelsat sold to Northrop the launch for MEV-1?

It was complicated, but our contract was for both launches.

And your customer for this was basically Eutelsat?

Yes.