United Launch Alliance cuts Atlas rocket price amid competition

Reuters News
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Posted: Apr 04, 2017 10:08 PM

By Irene Klotz

COLORADO SPRINGS, Colo. (Reuters) - United Launch Alliance has dropped the price of its workhorse Atlas 5 rocket flights by about one-third in response to mounting competition from rival SpaceX and others, the company’s chief executive said on Tuesday.

“We’re seeing that price is even more important than it had been in the past,” Tory Bruno, chief executive of United Launch Alliance, or ULA, said during an interview at the U.S. Space Symposium in Colorado Springs.

“We’re dropping the cost of Atlas almost every day. Atlas is now down more than a third in its cost,” Bruno said.

As of December 2016, a baseline Atlas 5 rocket launch was selling for about $109 million, though satellite operators can make up at least half that cost by getting more favorable insurance rates and other factors, including an on-time launch, ULA has said.

In contrast, Space Exploration Technologies, or SpaceX, lists the base price of a Falcon 9 rocket launch on its website at $62 million.

ULA’s cost reductions include trimming its payroll. The company last year said it planned to cut as many as 875 jobs, or about one-quarter of its workforce, before the end of 2017.  

The company last month lost a U.S. Air Force global positioning satellite launch contract to SpaceX, which bid $96.5 million for the work.

“It was a price-focused competition,” Bruno said.

After losing the bid, Bruno said he learned from the Air Force what was obvious - the competitor had a lower price.

More competition is on the way. Jeff Bezos’ rocket company Blue Origin last month announced its first six launch contracts for its still-in-development New Glenn orbital rocket.

Bruno said ULA would continue to pound away on the Atlas 5 price, but ultimately plans to replace the booster, which has a perfect 70-flight history.

Manufacturing and supplier costs at some point will limit price reductions, Bruno said. The new booster, expected to debut in 2019, “crashes through that ... floor and brings us to a much more competitive offering.”

(Editing by Steve Gorman)