DISRUPTING LAUNCH SYSTEMS THE RISE OF SPACEX AND EUROPEAN ACCESS TO SPACE Thesis submitted to the International Space University in partial fulfillment of the requirements of the M. Sc. Degree in Space Studies August 2017 Thesis author: Paul Wohrer Thesis supervisor: Prof. Jean-Jacques Favier International Space University 1 Abstract The rise of SpaceX as a major launch provider has been the most surprising evolution of the launch sector during the past decade. It forced incumbent industrial actors to adapt their business model to face this new competitor. European actors are particularly threatened today, since European Autonomous Access to Space highly depends on the competitive edge of the Ariane launcher family. This study argues that the framework of analysis which best describes the events leading to the current situation is the theory of disruptive innovation. The study uses this framework to analyse the reusability technology promoted by new actors of the launch industry. The study argues that, while concurring with most analysis that the price advantage of reused launchers remains questionable, the most important advantage of this technology is the convenience it could confer to launch systems customers. The study offers two recommendations to European actors willing to maintain European Autonomous Access to Space. The first one aims at allocating resources toward a commercial exploitation of the Vega small launch system, to disrupt the growing market of small satellites and strengthen ties with Italian partners in the launcher program. The second aims at increasing the perception of European launchers as strategic assets, to avoid their commoditization. The recommendation entails developing an autonomous European capacity to launch astronauts into space, which could strengthen the ties between France and Germany as well as lead to a rationalization of the geo-return principle. This capability would use Ariane launchers and provide European actors with a powerful diplomatic tool. Paul Wohrer ii MSS-Year B Thesis 2017 International Space University 2 Acknowledgements This work would not have existed without the outstanding support of my project supervisor Jean-Jacques Favier. I deeply thank him for his patience, dedication and for giving me the opportunity of shaping my curiosity into a structured project. Furthermore, he believed in my capacity to tackle this exciting topic and provided the material conditions to initiate it. I extend him my deepest gratitude. John Logsdon, professor emeritus, generously welcomed me at the Space Policy Institute during my trip to the United States, and opened the doors of the most interesting space executives to me. He also allowed me to witness SpaceX’s CRS 10 launch from Cape Canaveral, which was one of the most intense and exciting moments of my life. For the opportunities he provided me, for his invaluable experience and wisdom in all space-related matters, I extend him my deepest and most sincere gratitude. I would like to express my sincere gratitude to Xavier Pasco, director of the Foundation for Strategic Research, who offered me the opportunity to achieve my thesis in fantastic conditions, and allowed me to expand my knowledge and perception of space challenges. Many of the challenges faced during the writing of this work are due to the own limitations of its author. His biggest assets were by far the benevolence and patience of his interlocutors, who accepted to be interviewed for this thesis. These exceptional individuals helped shaping the somewhat naïve and idealistic perception of the issues in space launch into a more pertinent understanding of the actual forces at play. I therefore wish to deeply thank all of them: • David Quancard, Chief Operating Officer at Arianegroup • Christophe Bonnal, Senior Expert at CNES • Alain Dupas, Physicist • Olivier Becu, Program Manager at ESA • Johann Dietrich Woerner, General Director of ESA • Louis Laurent, Senior Vice President- Advisor to the CEO for Strategic Affairs, Arianespace • John Logsdon, Founder, Professor Emeritus of Political Science and International Affairs at the Space Policy Institute • Jean-Jacques Tortora, Director of the European Space Policy Institute • Clay Mowry, Vice President – Sales, Marketing and Customer Experience, Blue Origin • Phil Mc Alister, Special Assistant for Program Analysis at NASA • Lori Garver, General Manager at Air Line Pilots Association and former Deputy Administrator of NASA • Marc Timm, program executive at NASA • Scott Pace, Director of the Space Policy Institute and executive secretary of the National Space Council • William R. Claybaugh, Business Management Consultant • Wiener Kernisan, President of Arianespace, Inc. • Ken Lee, Senior Vice President of Space Systems at Intelsat Paul Wohrer iii MSS-Year B Thesis 2017 International Space University • Léonard Pineau, Cost Estimation and Project Control Engineer at CNES • Jérôme Vila, Assistant Director Research and Future Programs, Space Launchers at CNES • Victor Nikolaev, CEO of Starsem • Pascale Ehrenfreund, Chair of the DLR Executive Board and Research Professor at the Space Policy Institute • Pascal Bultel, Reusable Launchers M.R.O, Arianegroup • Thilo Kranz, Program Executive at ESA • An executive from SpaceX who requested anonymity • An executive from United Launch Alliance who requested anonymity • An executive from ESA who requested anonymity I wish to finally extend my gratitude to the members of my family who immensely contributed to the achievement of this thesis: Dominique Wohrer and José Alberro, who kindly housed my during my stay in Washington DC, and Laurent Samuel who inspired me to read about disruptive innovation. Paul Wohrer iv MSS-Year B Thesis 2017 International Space University 3 Table of contents 1 Abstract ...................................................................................................................... ii 2 Acknowledgements ................................................................................................... iii 4 List of Acronyms ....................................................................................................... vii 5 List of tables ............................................................................................................ viii 6 Introduction ................................................................................................................ 1 7 Motivation .................................................................................................................. 2 8 Methodology .............................................................................................................. 2 8.1 Interviews of Space Executives ........................................................................................ 2 8.2 Review of related work ................................................................................................... 3 8.3 Challenges ...................................................................................................................... 3 9 Structure of the thesis ................................................................................................ 4 10 The emergence of a threat ...................................................................................... 4 10.1 The 1980s, the rise of Ariane and the Shuttle .................................................................. 4 10.2 The 1990s, Ariane 4, EELV and international joint ventures ............................................. 6 10.3 The 2000s, Ariane 5 and American step-down ................................................................. 8 10.4 Space X and New Space ................................................................................................. 10 10.4.1 Elon Musk and Space X ................................................................................................ 10 10.4.2 Space X ........................................................................................................................ 10 10.4.3 Falcon 1 ....................................................................................................................... 11 10.4.4 Falcon 9 ....................................................................................................................... 11 10.5 The European reaction .................................................................................................. 12 11 What is a launch system? ...................................................................................... 14 11.1 Nation-states and supranational entities ...................................................................... 14 11.1.1 United States ............................................................................................................... 14 11.1.2 France .......................................................................................................................... 15 11.1.3 Germany ...................................................................................................................... 15 11.1.4 Italy .............................................................................................................................. 16 11.1.5 European Union .......................................................................................................... 17 11.2 Space agencies .............................................................................................................. 17 11.2.1 NASA ...........................................................................................................................