PARIS — OHB SE has made its name as a regular component supplier for Europe’s Ariane rockets and the prime contractor of Europe’s Galileo positioning, navigation and timing constellation.
it is also prime contractor for the German military’s current and future constellations of radar reconnaissance satellites, and for three high-resolution optical satellite for the German Federal Intelligence Service (BND).
But under Chief Executive Marco R. Fuchs, whose family controls a majority of OHB’s equity, the company is making tentative steps into what is sometimes called New Space.
In OHB’s case, it means co-investing with European governments on small satellite platforms for multiple applications, and designing a small launch vehicle for possible operations in the Portuguese Azores.
Of more immediate concern to Fuchs and OHB is an agreement between the European Space Agency (ESA) and the industrial team building the new Ariane 6 heavy-lift launcher. The two sides are at an impasse over which Ariane 6-related risks should be borne by industry, and which should be borne by ESA.
With your Italian division, OHB Italia, you built a first Eaglet cubesat. How do you see the future of this product?
There are many initiatives in the world doing cubesats. We did one as well with our Italian unit, and we launched it last year. We’re now building similar ones, a bit bigger, for the Italian government.
You can do limited things with it, but the idea of launching these things for Earth observation obviously hints at a constellation. It’s not an easy case, there are lots of people out there doing this, and nobody makes money on this stuff yet. I am aware of that.
So why do it?
First of all, it’s an Italian project. My idea is that we will build larger satellites out of Germany and the smaller stuff from the smaller OHB companies. They got an opportunity from an organization in the Italian military to build Eaglet. The first one was just an investment by us. We played with it, in cooperation with academia.
For the second Eaglet, we are getting paid. These things are meaningful industrial-wise. I am not sure you can really build a sustainable service from it. Remember, I have been involved with Orbcomm for 25 years, I know enough about little LEO stuff. I was a part of the team that bought Orbcomm out of bankruptcy. I know how hard it is to make a business of this.
The Eaglet 2 customer is the Italian government?
It’s an organization out of the Italian MoD. We build it from Milan. It is a little bit bigger than Eaglet-1. It has a camera on it.
I like it for OHB because it demonstrates that we can do this stuff as well the large platforms. So we can say we build satellites from 3 kilograms up to 4,000 kilograms.
Eagle-3 would be for the Italian government as well?
That is the idea, but it’s not confirmed. You want to really understand what you can do with these small platforms. It’s not operational yet, it’s like DARPA an entity that likes to look at data and see how to blend it with their ground infrastructure.
You’re also build the Luxembourg’s NAOS high-resolution optical reconnaissance satellite in an in-orbit-delivery contract. But it can’t be an operational system with just one satellite.
We are only building one satellite for them. They held a competition and we won it. They might go on with more satellites at some point but I don’t know. This was a very nice contract for us and it was very important for us. The typical European bidders were there. Export is a customer-focused game, you need to look at what the customer really wants.
Who is building the sensor for you?
It’s under our control but we are buying some components from international sources. It will be launched on Vega.
When are the SARah German military radar satellites being launched with SpaceX?
The first satellite should launch in late 2020.
You are designing the Electra all-electric satellite platform with ESA and SES. Is it not certain that SES will be the first customer for this?
It’s under discussion. The market is changing a lot, and all the operators are reviewing their strategy. We are still covered with the contract in the phases we are in. Electra follows a phased approach. We are in phase 2. Selection of the mission, the so-called phase 3, is still up in the air.
ESA’s ruling council was supposed to resolve the remaining Ariane 6 transition phase issues in late March. They couldn’t do it, so the bigger government players — France, Germany, Italy — will meet April 17.
ArianeGroup wants 7 missions confirmed from ESA in the 14-rocket transition phase. They also want other commitments and price protection. Until then, no production on Ariane 6. What’s the solution?
There is no obvious answer, but it’s high time to compromise on this, and that requires that each side moves. It’s unpleasant for everybody but it is urgent that we find a compromise now. What’s a compromise? It’s typically a middle ground. That’s all I can say as a supplier not being at the table. This needs to happen soon.
OHB is making a proposal to the Portuguese government for a micro launcher to be operated from the Azores. Do you see a business there?
Of course. I am a space company and space companies need to be capable of going to space.
You already have space access, from Europe’s Guiana Space Center.
Look, I am not claiming we will settle Mars with this. I am not that ambitious. But I do believe that while of course there is an oversupply in these initiatives trying to do small rockets, it’s worthwhile to explore whether we can do a mini-launcher in a feasible way. We have been looking at this for awhile. We are a satellite company that sees satellites getting smaller — the subject we started our conversation with. Who knows where we will be with satellites in five years?
We may have an interesting market for a launcher than can do 200 to 500 kilograms.
People don’t generally make money in launchers without massive government support.
I know this. Not a lot of people make money in constellations either, at least on the equity side. I do believe it’s possible to do launchers for much less money than we have in the past. We have a few thoughts on how to reduce costs, so I like the idea of pursuing this.
I am not saying we are the first or the best or the only ones. But our advantage is that we build satellites and are are close to the market, and we also have a factory that builds rocket parts and are close to the manufacturing. So we are in a much better position than the green-fielders. We know what a rocket should look like and what satellites will look like in a couple of years. It’s worth exploring with a small launcher.
How many vehicles would you need to launch per year, on average, to break even? You must have done the calculations.
We have, but this is not the key thing now. Of course the more launches you have the more likely you are to make money on it. But we are not claiming we have the path to success here to a micro-launcher. It’s not part of my equity story. It’s part of what’s exciting for a space company to explore.
It’s that kind of thinking that drove your activist New York investor crazy.
I know. But I am doing this openly. It’s part of the transparent OHB story. We are open on launch sites. But for someone just starting to build a rocket, selection of launch sites is not the most urgent thing. So yes, we are looking at launch sites.
But we are looking at many things: lunar landers, Mars missions, asteroid deflection. This is what we’re here for.
But those are under government contract.
Not only. A few years ago we sent a little 14-kilogram thing to the Moon with the Chinese, from Luxembourg. So once and awhile we do stuff on our own. We did the Orbcomm investment, the micro-satellite work — these started with in-house R&D.