Aerojet Rocketdyne says new AR-1 engine timetable could slip

By Andrea Shalal NATIONAL HARBOR, Md. (Reuters) - Aerojet Rocketdyne Holdings Inc on Tuesday said it expected to complete its new AR-1 rocket engine by 2019 to replace a soon-to-be banned Russian engine, but the date could slip if it does not receive enough U.S. government funding. Aerojet Vice President Julie Van Kleeck declined comment on reports that Aerojet has offered $2 billion to acquire United Launch Alliance (ULA), a 50-50 rocket launch venture of Lockheed Martin Corp and Boeing Co. Analysts say the bid is a strategic move by Aerojet to shut out rival Blue Origin, a company owned by founder Jeff Bezos, that is developing a new engine favored by ULA for use in its new Vulcan rocket. ULA has said Blue Origin's engine program is about two years ahead of Aerojet's work on the AR-1 engine, a claim Aerojet disputes. Work on the new engines gained urgency after U.S. lawmakers passed a ban on use of Russian RD-180 engines for launches of U.S. military or spy satellites following Russia's annexation of the Crimea region of Ukraine last year. Van Kleeck said the company was testing hardware for the engine, which is being designed with 3D-printed parts to fit into both ULA's Atlas 5 rocket, now powered by the RD-180 engine, and the new Vulcan rocket that ULA is developing at a cost of about $1 billion. Aerojet says it would be less costly and risky to integrate its engine into the Atlas 5 rocket than to develop a wholly new engine and rocket, as ULA currently plans. Van Kleeck said Aerojet planned to begin testing full scale engines in 2017, followed by certification in 2019, but the date could slip if the company did not receive enough funding from the Air Force in contract awards expected late in the first quarter of fiscal 2016, which begins Oct. 1. She said the company was eager to see how the Air Force split funding of about $160 million among rival bidders. She said Aerojet was also exploring other private funding options for the engine but gave no details. The Air Force competition is a public-private partnership, with each of the bidders asked to provide one-third of the funding, with the Air Force to provide a two-thirds share. Space Exploration Technologies, or SpaceX, and Blue Origin, both of which are privately held, have self-funded their engine work, and say they are not necessarily looking for government funding. (Reporting by Andrea Shalal; Editing by Ken Wills)

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