Ministers from the 15 ESA countries are likely to approve proposals for a major organisational revamp in rocket launchers, a decision that will reverberate across the entire space sector.

The plan "will restructure the range of Ariane launchers, restore the competitiveness of the Ariane-5 and set down new measures for future launchers," a source at ESA's headquarters in Paris said.

ESA -- as other space agencies -- has been badly hit by the slump in the market for satellite launches, triggered by the crisis in the global telecoms sector and the popping of the Internet bubble.

But the Europeans' problems have coincided with headaches with the Ariane-5, the launcher series which has taken over from the smaller, tried-and-trusted Ariane-4 in the role of ESA's workhorse.

Arianespace, the company which under a convention with ESA operates the agency's Ariane rockets, has put out the begging bowl for cash -- and in return has been told to streamline its activities in order to reduce costs.

According to a report last month in the daily Le Monde, Arianespace told its 41 shareholders it needed 555 million euros (654 million dollars) to get the troubled 10-tonne Ariane-5 ECA launcher back on track after a disastrous maiden flight last December.

It also asked the shareholders -- aerospace companies, banks and France's national aerospace institution -- to stump up an extra 200 million euros per year in operating costs and boost capital by 200 million euros to help wipe out last year's losses, Le Monde said.

As part of the proposed bailout package, Arianespace has been told to concentrate on marketing and launch operations, while the European aerospace giant EADS would be handed sole responsibility for developing and manufacturing the rockets.

Arianespace's future job would essentially be to purchase rockets and sell launch services.

Its problem, though, is that the phaseout of the Ariane-4 has left it without a launcher to deal with medium-sized satellite payloads.

To fill that gap, it has its eyes on a deal with the Russian company Starsem, which could provide its veteran vehicle Soyuz for launches from ESA's space base in Kourou, French Guiana.

Ministers are under intense pressure from Europe's aerospace lobby to approve the deal.

Philippe Camus, president of French Aeronautics and Space Industries Association (GIFAS) said last week that the civilian satellite market had shrunk from 20-25 orders per year a decade ago to just seven last year, creating "a very disturbing situation in France and in Europe."

"The (aerospace) industry trusts that France and the other European states will take measures and decisions to safeguard the public- and private-sector investments that have been made for more than 40 years," he said.

Ariane is overwhelmingly dependent on civilian orders. Its major competitors are Boeing and Lockheed Martin of the United States, who derive much of their income from launching military satellites for the Pentagon.

SPACE.WIRE