Wednesday May 5 5:37 PM ET

Boeing Failure Another Blow To U.S. Space Industry

By Steven Young

CAPE CANAVERAL, Fla. (Reuters) - When the Boeing Co.'s new Delta 3 rocket left an expensive satellite in lopsided orbit soon after takeoff, the U.S. space industry added another multimillion-dollar mishap to its growing list.

The 12-story rocket vaulted off its launch pad in a brilliant eruption of flame and smoke at 9 p.m. EDT Tuesday (0100 GMT Wednesday).

But about 22 minutes later, its second stage engine failed to relight and left its costly cargo stranded thousands of miles (km) too low.

``Everything had looked so good,'' mission director Rich Murphy said. ``I really have no idea what happened.''

The failure of the $230 million satellite delivery mission was only the latest in a series of U.S. satellite setbacks.

The botched mission meant that four of six U.S. satellite launches -- worth a total of some $2 billion -- have failed within a month.

The U.S. military's Titan 4 rocket failed twice and a satellite was lost on a commercial Athena rocket in April.

``The last time I remember as many failures as the industry has had was around the Challenger time,'' Murphy said, referring to the Jan. 28, 1986 explosion of the U.S. space shuttle. Between August 1985 and the end of May 1986, there were six launch failures, including the Challenger disaster.

Boeing said it had made contact with the satellite, and that it had named a team to investigate.

Boeing was hoping its new rocket would help it win a larger piece of the lucrative space launch market, currently dominated by the French-led Ariane project.

``We must and we will fly Delta 2 successfully,'' said Gale Schluter, a Boeing vice president. ``At the same time, if we can determine the cause of the failure is unique to Delta 3, we will clear Delta 2 for flight.''

There are 11 Delta 2 and two Delta 3 flights on the Boeing manifest for this year, the company said.

The Delta 3, an upgrade of the Delta 2, was carrying Loral Space and Communications Ltd.'s Orion 3 satellite, made by Hughes Space & Communications . The satellite was to be stationed over Asia to provide communications links from India to Hawaii and beam television to homes across South Korea.

The satellite and launch were fully insured.

Boeing and Hughes were looking to see if there was any way the satellite's mission could be salvaged using its onboard rocket fuel, but hopes were not high that it could reach its intended orbit of 22,300 miles (35,700 kms) above Earth.

``At this point, we're kind of putting the satellite into a holding pattern,'' said Emery Wilson, spokesman for Hughes Space & Communications. ``We've got to see how well our orbital maneuvers work. ... We're in the process of doing them now.''

Boeing had postponed the launch of the Delta 3 by two days because the rocket's second stage used a similar engine to that of a Titan rocket that failed last Friday. The company had cleared the Delta for launch saying it was confident its rocket would not suffer the same problem.

On April 30, the $433.1 million Titan rocket failed to place a Milstar communications satellite valued at about $800 million into the proper orbit. Both were built by Lockheed Martin Corp.

On April 27, a Lockheed Martin Athena II rocket failed to place a commercial satellite built by Lockheed Martin for Denver-based Space Imaging into polar orbit. The rocket cost about $25 million. The satellite's cost was not disclosed.

And on April 9, a $250 million missile warning satellite was stranded in the wrong orbit after it was launched by a Lockheed Martin Titan 4B rocket. Boeing built the upper stage booster that failed in that mission.

``If you look at the collective failures, it's extraordinary given the fact that many of these did not involve new technologies,'' said Jon Kutler, president of the aerospace investment firm Quarterdeck Investment Partners.

Before April's failures, two rockets exploded in August, a Titan 4A and a Delta 3 on its maiden flight.