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Space/Science » in reply to Boeing Abandoning Commercial Satellite Launches

The full text of Boeing's press release

can be found here. Here's part of it:

1) Delta IV Program ($835 million)

When the company began the Delta IV program in the 1990s, demand for commercial satellites and related launch services, particularly for telecommunications, was robust. The company anticipated that strong commercial demand would help reduce the cost of launch vehicles for both commercial and government customers, and the company priced its vehicles accordingly.

During this period, Boeing also made substantial incremental investments in a second launch site on the U.S. west coast, a heavy-lift version of the Delta IV vehicle, and an all-new U.S. rocket engine. These unique capabilities were developed to address U.S. government requirements and positioned the company to capture additional business.

However, over the last several years demand for commercial launches eroded while global launch capacity increased. In light of the continuing severe downturn in the commercial launch market, the company has determined that a meaningful recovery of demand and pricing is unlikely for the foreseeable future. As a result, in the second quarter of 2003 Boeing made a strategic decision to focus the Delta IV program on the government launch services market. In conjunction with that decision, the company updated -- and reduced by nearly one-half -- its estimate of long-term demand for Delta IV launch vehicles. This reduction eliminated nearer-term commercial launches previously forecast to occur over the next five years.

As a result, the company estimates it will incur higher per-unit labor, materials and business infrastructure costs due to lower annual launch rates over the next five years. In addition, the company has experienced higher mission and launch costs, primarily to support government requirements, and has increased its estimates accordingly. Because currently contracted and awarded launches are in a loss position, Boeing will recognize charges totaling approximately $835 million in the second quarter across its 24 currently contracted and awarded Delta IV (including Evolved Expendable Launch Vehicle program) launches. This estimate is based upon existing pricing in the company’s contracted and awarded launches.

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