KOUROU, French Guiana – The company designing Europe’s next-generation Ariane 6 rocket – to be integrated horizontally, not vertically as previous Ariane vehicles — expects to submit a firm, fixed-price bid for a first batch of rockets by the end of this year, the company’s chief executive said Jan. 28.

Alain Charmeau, chief executive of Airbus Safran Launchers (ASL), said 2016 is the key transition year for his company, which remains a work in progress. Formed in 2015, ASL has been given broad leeway to reorganize Europe’s launcher sector to assure that Ariane 6 is ready for an inaugural flight in 2020 and able to compete on price and performance with SpaceX of the United States.

Briefing reporters, Charmeau said ASL remains on track to meet both objectives but has no time to lose. In particular, he said a review of the tax consequences to Airbus of an expected payment by Safran of 800 million euros ($873 million) to offset in-kind Airbus contributions to ASL must be resolved within a couple of months to avoid any impact on the Ariane 6 schedule.

But that is only one of several milestones that Charmeau said must be reached so that the company “is able to put a firm offer on the table, by the end of 2016, for the first batch of Ariane 6 vehicles.”

Airbus and the Arianespace commercial launch consortium, in which Airbus will have a 74 percent stake once the European Commission clears the sale of French government Arianespace shares to Airbus, would negotiate an Ariane 6 production order.

Charmeau said the transaction for Airbus Safran Launchers to purchase the French government’s 35 percent Arianespace share was submitted to the European Commission in early January, with approval expected by late February. ASL and the French space agency, CNES, negotiated a price of 150 million euros

The French government’s Official Journal on Jan. 22 said the French research, economics and defense ministries have approved the transaction.

Airbus’s tax concerns has already delayed the full formation of ASL, which was supposed to have integrated a total of 8,000 former Airbus and Safran employees by Jan. 1. Charmeau said the one-month schedule slip is not enough to undermine the 2020 first-launch date, but that the issue must be resolved before April to avoid production delays.

“This is a non-negligible event,” Charmeau said. “You’ll have 8,000 people whose employment contracts are going to change. We have 400 now, leaving 7,600 who are knocking on our door to get in. It’s only normal that they want to be a part of an ambitious new program like Ariane 6.”

What happens to Arianespace once ASL becomes the dominant shareholder remains a subject of speculation.

In a Jan. 27 interview here, Arianespace Chief Executive Stephane Israel said he expects ASL to abide by previous statements that it will maintain Arianespace as a separate commercial entity outside ASL, retain Arianespace’s Evry, France, headquarters and its offices in Washington, Tokyo and Singapore.

Israel said ASL has guaranteed in its submission to the European Commission that “a Chinese Wall will be created between ASL and Arianespace on the one hand, and Airbus’s satellite division on the other. That is indispensable; everybody understands it,” Israel said.

Israel was echoing fears of rival satellite builders that ASL and Arianespace would leak to Airbus’s satellite division confidential information delivered by other satellite builders in the course of Ariane launch contract negotiations.

Charmeau said a closer integration of Arianespace and ASL should create “synergies and efficiencies,” which in some industrial contexts is a polite language for work-force reductions. Charmeau did not discuss the future employment picture at Arianespace or at ASL once the reorganization was complete.

“Rearranging the [Arianespace] shareholder structure is not the goal,” Charmeau said. “The goal is a rapprochement of the two companies so that we can work better together and give ASL a better sense of where the market is going.”

ASL has promised European governments and commercial satellite operators that Ariane 6 will be priced 40-50 percent less than today’s Ariane 5 in return for a guarantee of five European government satellite missions, on average, per year.

Once Safran’s payment to Airbus and ASL’s Arianespace share purchase is completed, ASL’s focus is a mid-year Ariane 6 review by the European Space Agency (ESA).

ASL and ESA in August signed a 2.4-billion-euro Ariane 6 development contract following ESA governments’ general approval of the program in December 2014.

But these governments asked to review a formal progress report – a Program Implementation Review — in mid-2016 before freeing up the balance of the financing to complete Ariane 6 development through to the inaugural flight.

Charmeau said ASL would submit to ESA, in June, “a guarantee of the design and production cost of all services associated with Ariane 6. We then expect a decision by ESA in September.”

Officials from ESA and from the French space agency, CNES, have been kept in the loop on Ariane 6 progress, and it’s CNES that is prime contractor for building the Ariane 6 launch facility here at Europe’s Guiana Space Center.

One key decision was whether to turn away from nearly 40 years of Ariane rocket history and integrate Ariane 6 horizontally. Charmeau said that decision is now firm and affords multiple advantages.

“It allows us to move more quickly, both in the design and production phases, and to adapt to potentially higher production levels while reducing operating costs,” Charmeau said. He said that European engineers for the past five years have had first-hand experience with horizontal integration with the Europeanized Russian Soyuz rocket, which is launched here.

The current production rate is expected to be 12 Ariane 6 rocket cores per year. The vehicle uses cryogenic engines for its main stage and upper stages and either two or four solid-propellant strap-on boosters, depending on mission requirements.

The four-booster variant, called Ariane 64, will be the main commercial workhorse for launching telecommunications satellites, two at a time, into geostationary transfer orbit.

The current Ariane 5 rocket will be operated alongside Ariane 6 between 2020 and 2023, after which Ariane 5 will be retired after 27 years of operations.

Charmeau said ASL expects to build 20 Ariane 6 rockets before the end of 2023.