Economy – Quantitative Finance – Risk Management
Scientific paper
Jan 2002
adsabs.harvard.edu/cgi-bin/nph-data_query?bibcode=2002iaf..confe.938t&link_type=abstract
IAF abstracts, 34th COSPAR Scientific Assembly, The Second World Space Congress, held 10-19 October, 2002 in Houston, TX, USA.,
Economy
Quantitative Finance
Risk Management
Scientific paper
From a commercial perspective, the ability to justify "leap frog" technology such as reusable systems has been difficult to justify because the estimated 5B to 10B investment is not supported in the current flat commercial market coupled with an oversupply of launch service suppliers. The market simply does not justify investment of that magnitude. Currently, next generation Expendable Launch Systems, including Boeing's Delta IV, Lockheed Martin's Atlas 5, Ariane V ESCA and RSC's H-IIA are being introduced into operations signifying that only upgrades to proven systems are planned to meet the changes in anticipated satellite demand (larger satellites, more lifetime, larger volumes, etc.) in the foreseeable future. We do not see a new fleet of ELVs emerging beyond that which is currently being introduced, only continuous upgrades of the fleet to meet the demands. To induce a radical change in the provision of launch services, a Multinational Government investment must be made and justified by World requirements. The commercial market alone cannot justify such an investment. And if an investment is made, we cannot afford to repeat previous mistakes by relying on one system such as shuttle for commercial deployment without having any back-up capability. Other issues that need to be considered are national science and security requirements, which to a large extent fuels the Japanese, Chinese, Indian, Former Soviet Union, European and United States space transportation entries. Additionally, this system must support or replace current Space Transportation Economies with across-the-board benefits. For the next 10 to 20 years, Multinational cooperation will be in the form of piecing together launch components and infrastructure to supplement existing launch systems and reducing the amount of non-recurring investment while meeting the future requirements of the End-User. Virtually all of the current systems have some form of multinational participation: Sea Launch - Ukranian, Russian, American and Norwegian; Delta - U.S., Swedish and Japanese; Arianespace - European; RSC H2A - Japanese and U.S. This approach will continue because of the cost of new engine development, to name one, versus acquiring other new technology will continue to be evaluated from a business perspective. The commercial market will remain flat for the near and mid term unless broadband or some other "killer application" emerges. A fragmented multiple player launch services market will service customers for the near term. Some degree of consolidation or elimination of existing launch services alternatives is expected. We are already seeing some consolidation - Boeing Launch Services (BLS) marketing Sea Launch and Delta; International Launch Services (ILS) marketing Atlas and Proton; Arianespace/Starsem marketing Ariane and Soyuz. So what will be the key for Space Transportation Success in the future? Focusing on the "Whole Product Offering," providing a product that provides not only the generic and expected services, but also augmented services that provide differentiation and raises the value. At the Boeing Company, we are continually evaluating the augmented product, focusing on high problem solving value to provide a substantial, not incremental value of improvement. Our focus is on not just our customer, but also our customer's customer. And our focus is on how we can effect a positive change in their current business plan. We evaluate the areas of space segment risk, price and finance, and performance. Through these three areas, we are continuing to improve our product and become more integrated with the Customer and participants in ensuring the successful implementation of their business plans. Our augmented offerings include - Risk Management - Financial Performance - Performance Assurance We continue to build upon and extend these features to move beyond an augmented product and to prepare ourselves to offer "Potential Products" to recognize changes in the Customer's cost structure, customers, and environment. Linking ourselves around the world with subsystems suppliers and team members is a major part of our ability to maintain competitiveness and a prepared state to continue to differentiate us from our competitors through enhanced and unique services.
Simpson Jamesina J.
Trafton W. C.
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