Spacecom returns to SpaceX to launch 2 satellites

Elon Musk SpaceX Photo: Bloomberg

Despite the disastrous explosion of SpaceX's Falcon 9 rocket a year ago, which destroyed Amos 6, the Israeli company is returning to Elon Musk's company.

The explosion of US company SpaceX's Falcon 9 rocket a year ago, which destroyed the Amos 6 Israeli communications satellite, is not deterring Spacecom Satellite Communications Ltd. (TASE:SCC). Spacecom, controlled by Israeli businessman Shaul Elovitch, today announced that it had signed two launch agreements with SpaceX, controlled by billionaire Elon Musk.

The satellites to be launched, the Amos 17 and Amos 8, which will be launched over the next three years, are designed to enable SpaceCom to expand the services it sells. The Amos 17, which Spacecom bought from US company Boeing to replace the Amos 5, will be launched first. The Amos 5 was lost in space in November 2015, and all contact with it was lost. Russian company JSC Reshetnev made the Amos 5 for Spacecom.

The Amos 17 launching into outer space is scheduled for the second quarter of 2019. According to Spacecom's announcement to the TASE today, the satellite is designed to provide services for 19 years.

Under the agreement signed by SpaceX and Spacecom, the Amos 17 launch will be free of charge, since the Israeli company has already paid for the Amos 6 launch, which did not take place, due to the explosion two days before the planned launch of the rocket that was to have carried it into outer space.

The second part of the agreement with SpaceX involves the launching of the Amos 8, which perform the tasks for which the Amos 6 was designed: providing communications services to parts of Africa. The Amos 8 launch, scheduled for the second half of 2020, will also use a Falcon 9 rocket.

According to Spacecom, it will pay SpaceX at most $62 million for this launch. Under the agreement with SpaceX, the latter will take a third party insurance policy out to cover its liability for third party damage during the launch or in the preparations for it, according to the rules of the US Federal Aviation Authority.

It is still unclear which company will manufacture the Amos 8 for Spacecom, whose launch is scheduled for three years from now. The company has already asked a number of communications satellite manufacturers for price bids, including Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1). IAI developed and built the Amos 6, which was destroyed a year ago, and has since been leading an extensive campaign in government ministries for the regular budget allocations to enable IAI to preserve the communications satellite industry in Israel. Spacecom is currently in the process of evaluating the bids it received from some of the companies.

Following pressure from IAI for special budget allocations, the Ministry of Science, Technology, and Space has established a committee headed by its director general, Colonel (res.) Peretz Vazan. Following its discussions, the committee recommended the allocation of tens of millions of shekels. Sources involved in the issue said, however, that no money has yet been transferred. Senior IAI officeholders warned in recent months that these delays were putting the company's activity in the communications satellites sector into question.

Despite Spacecom's traumatic experience in launching a satellite using the Falcon 9 rocket, the company is expressing absolute confidence in the rocket and in SpaceX. An industry source told "Globes" today that the event a year ago, in which a failure caused the rocket to explode, destroying the satellite, had had no effect on the continuation of Spacecom's business with SpaceX.

"During the year since the explosion, SpaceX has carried out 15 more successful launches into outer space. This figure proves that the launcher is reliable, and that SpaceX is an excellent company. Malfunctions like the one that took place in September 2016 and destroyed the Amos 6 occur all the time, and in every company," the source said.

The source added, "In the second half of 2018, SpaceX will already start 15 manned launchings into outer space - a figure showing that its launching capabilities are good and safe."

Following the explosion of the Amos 6, Spacecom received $173 million in insurance payments, and is now in an arbitration proceedings for obtaining tens of millions of shekels in compensation from IAI, due to alleged delays in the Amos 6 delivery date.

Published by Globes [online], Israel Business News - www.globes-online.com - on October 19, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Elon Musk SpaceX Photo: Bloomberg
Elon Musk SpaceX Photo: Bloomberg
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