In itself this was not a particularly serious glitch for Arianespace, the European space consortium that has dominated commercial satellite launches for the past decade. But after losing two rockets last year, any setback that damages Ariane's reputation is a great worry - especially as the competition finally has its act in order, and is ready to launch an attack. The launch market is on the point of dipping, and the Americans, the Russians and the Chinese are moving in on the Europeans' extraterrestrial territory.
But what is tough for Arianespace should be good news for its customers: companies wanting to fire television or telecommunications satellites into orbit will find they have unprecedented choice - and perhaps even lower prices. Ariane is trying to hang on to its 60 per cent share, and will introduce a bigger rocket next year, but it makes no bones about the pressure it is under.
Launching commercial satellites is big business. About 25 satellites a year are launched into geostationary (or high) orbit at between $50m (£33m) and $90m a time. On top of that is the cost of the satellite ($100m apiece), plus sharply rising insurance costs - the result of what Arianespace calls "a very bad year" in 1994.
About half of these satellites are used for beaming television programmes around the world. The rest are for transmitting telephone calls and data, scanning the earth - weather forecasting, for example - and for scientific experiments.
The biggest single launch customer is Intelsat, which is owned by 200 of the world's post and telephone companies and manages their telephone satellites. Its launch record and plans tell the story of changing dominance. It has put 43 satellites into space since 1965. Until 1983, they were all launched on American rockets built by private companies - either Delta or Atlas/Centaur. It first tried Ariane in 1983, and over the next 10 years nine of its 14 launches went up on European vehicles. The last three launches, however, have used Atlas rockets, built by Lockheed Martin. Intelsat plans five more launches this year - three will be with Ariane, but two will go up on Chinese Long March rockets.
Behind this trend lie two events - the destruction of the Space Shuttle Challenger in 1986, and the end of the Cold War. American companies, including Martin Marietta, McDonnell Douglas and General Dynamics, started to wind down production of their launch vehicles because the government said it wanted the Space Shuttle to take over commercial launches. Washington is highly interventionist on such issues - it funds much of the research and development through Nasa - and the aerospace companies duly withdrew.
Arianespace, meanwhile, was being encouraged by its European state owners to compete hard for the business (also, of course, with the aid of state cash) and proved it could offer a reliable service. (Despite the misfortunes of 1994, it has had only five failures in 62 launches). When the Shuttle blew up, it found it had the field to itself: Nasa uses the vehicle only for military missions. In 1990, Intelsat tried two launches on the US Titan III, a derivative of an ICBM missile, but only one of them succeeded.
But now the Americans are back in the market. Patrice Larcher, marketing manager of Arianespace, says that the Delta, an elderly but reliable design built by McDonnell Douglas, is once again a formidable competitor for lighter loads, while Martin Marietta's Atlas is being sold hard. "I think Lockheed Martin is getting its act together," says Jim Asker, senior space technology editor of the Washington-based journal, Aviation Week and Space Technology. Mr Larcher says the Chinese meanwhile "can offer a very good contract and will become more formidable". They will, he says, always undercut the Europeans whatever price they offer.
Neither the Americans nor the Chinese are potentially as damaging to the Europeans as the Russians, though. "They are the real wild card," Mr Asker says. "Everyone is worried about them." Mr Larcher says the Russian Proton is a "good old reliable rocket", which has been pushing satellites into space for years. The Russian company Khrunichev has put its marketing in the hands of Lockeed Martin, which has generated 16 bookings so far, compared with Arianespace's 38-strong order book.
Competition will increase as the demand for launches slows. In the next three years, 25 satellites a year will be put up, then the number will slip to 18. "That is because satellites launched recently have a longer life," Mr Larcher says.
In lower orbit, there are further signs that the Europeans are losing out.
Iridium, a multinational consortium based in Washington, is putting 72 satellites into low earth orbit to provide a "constellation" that will carry mobile phone messages around the world. The launch business has been divided between the McDonnell Douglas Delta, the Khrunichev Proton and Great Wall Industry's Long March.