Lost In Space

When a $150 million communications satellite was stranded in space last week, the fledgling U.S. commercial launch business may have been set adrift with it. Owned by Intelsat, a Washington-based consortium of 118 countries, , the satellite, which was to handle phone calls and television transmissions, failed to separate on schedule from its booster and tumbled into a useless low orbit. Though Intelsat technicians managed to lift it a bit higher, the five- ton payload nonetheless seemed destined to plunge back to earth within a few months, unless NASA can arrange a rescue by the space shuttle.

Rescue or no, the mishap dealt a blow to all three U.S. companies that build rockets for commercial use. Martin Marietta, which made the booster for the Intelsat mission, had completed its first successful launch in December but may now have to delay plans for a second Intelsat lift-off this summer. The episode could also tarnish McDonnell Douglas, which carried out a commercial launch last year and has nine more on order, and General Dynamics, whose first venture is planned for June. The three aerospace giants entered the commercial field after former President Ronald Reagan took the U.S. Government out, when he banned private cargo from space-shuttle flights in the wake of the 1986 Challenger disaster.

U.S. firms had appeared ready to gain on Arianespace, a French-based European consortium that holds a commanding 50% share of the $1 billion launch market. The consortium suspended new missions for an indefinite period last month after one of its rockets exploded shortly after lift-off.

The Western failures have boosted the competitive position of China and the Soviet Union, which have state-supported space programs. Moscow has sought for years to launch a U.S. satellite aboard a giant Proton rocket. China plans to use one of its Long March missiles next month to lift an AsiaSat communications satellite in a joint venture with Hong Kong. China charges only about half the $100 million that Western firms get for a launch.

The Martin Marietta and Ariane incidents may drive the already prohibitive cost of launch insurance even higher. Insurers typically charge up to 30% of the combined value of a satellite and rocket, which would have brought the premiums for last week's mission to nearly $50 million. Faced with that bill, Intelsat set up a self-insurance fund to absorb the cost of the failure.