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ILS at Euroconsult 2009

Date of News Item: 
September 9, 2009

During the Euroconsult media interviews and the Launch Services Providers panel, held on September 8, 2009 in Paris, ILS President Frank McKenna provided his perspective on the issues facing the industry beginning with a summary of the company’s year to date accomplishments and plans for the future:

New Business for ILS and Launch Manifest for 2009:

To date, ILS has announced nine new orders and 3 mission assignments with a current backlog of 25 firm missions valued at over $2 billion dollars.

The announcement at the start of the conference for the ILS Proton launch of the W7 satellite for Eutelsat of France, McKenna said, is an indicator of the value that ILS has been providing to customers across the globe. The W7 satellite will be launched in November of this year; representing a rapid mission integration timeframe "that is simply unmatched" by the other launch services providers. ILS was able to accommodate this near term opportunity because of the robust production rate of its partner and majority owner, Khrunichev Research and Space Production Center (Khrunichev) of Moscow. A similar integration was also executed for AsiaSat of Hong Kong with the successful launch of the AsiaSat 5 satellite in August of this year.

Krunichev Consolidation:

The consolidation of the Russian Space Industries has been of tremendous benefit to Khrunichev and ILS, with most all of the manufacturers and suppliers for Proton now vertically integrated. McKenna said this further strengthens the Proton supply chain and streamlines production overall.

Demonstrated Launch Rate:

Proton has launched successfully 13 times in the last 13 months—with 8 commercial ILS missions and 5 Federal missions--demonstrating a robust production and flight rate of one per month.

McKenna said that Proton has had six successful missions so far this year with the launch of W2A satellite in April, Protostar II in June, Sirius FM-5 in July, AsiaSat 5 in August and two Federal missions. ILS will be launching the Nimiq 5 satellite for Telesat of Canada on September 18. The combination of commercial and federal missions creates a sustainable business model for the company with a year-end wrap up of 12 Proton missions for 2009.

Proton Enhancements and Future Plans:

With respect to Proton enhancements, the capabilities of Proton Phase III were successfully introduced in February of this year with the Federal dual Express mission launch. McKenna said that Phase III will be the standard configuration going forward in 2010.

When asked about the next generation Angara vehicle, McKenna said that it is scheduled for flight testing in 2011. The first stage engine was successfully flight-demonstrated recently with the launch of the KSLV-1 vehicle on August 26th from the Naro Space Center in South Korea.

Addressing Commercial Access to Space and Overcapacity:

Relating to the concern that Operators want reliable, cost effective access to space, McKenna stressed that most Operators have schedule assurances through diversification of their launch fleets. This was demonstrated successfully when SES enlisted two major launch suppliers to provide schedule and mission assurance to their global manifest providing through backup arrangements on individual missions, and favorable terms by purchasing multiple launches at once. He said that the Multi Launch Agreement is on track for five Firm launches in five years with two providers- ILS/Proton and Ariane5/Soyuz.

In reference to the Chapter 11 filing in July of this year of Sea Launch of Long Beach, California, McKenna emphasized that the Sea Launch and Land Launch backlog has largely been absorbed by others as Operators needed to preserve their business plans and remain on schedule. With the announcement of the W7 mission, six missions have moved from Sea Launch/Land Launch to ILS Proton within the past year.

McKenna also noted that Proton and Ariane have accommodated up to 22 commercial satellite launches per year. With respect to worries that there are not enough viable launchers to accommodate the market, he said the forecasted demand is consistent with recent history with 18-22 satellites orders per year and would start to decline from this cycle in late 2011 and 2012. With two fully functioning commercial launch providers, he noted that other providers could bring added capacity where it is needed.

Addressing the concern of operators of a launch failure, in an interview with ViaSatellite, McKenna stated the recovery rate for Proton is approximately 90 days.

The 13th annual World Satellite Business Week, held September 7-10, 2009 in Paris, welcomed a record number of attendees and some of the most influential business executives in the commercial space industry. The launch services providers panel included the top executives representing businesses that serve both the commercial and government market: International Launch Services (ILS), Arianespace, Sea Launch, Lockheed Martin Commercial Launch Services, Boeing Launch Services, China Great Wall Industry Corp and Mitsubishi Heavy Industries. Each panelist provided brief opening remarks and responded topical questions regarding industry trends and developments, risks and opportunities and speculation about the market and sustainability of the industry.

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