Another Falcon 9 launch success


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The competition heats up: SpaceX has successfully launched its second commercial Asiasat satellite into orbit in just over a month.

“These two satellites launching a month apart are really growth satellites for us,” [William Wade, AsiaSat’s president and CEO] said. “They’re not replacements. They’re new, incremental growth satellites for us across Asia, with C-band on AsiaSat 6 mainly in China, and Ku-band on AsiaSat 8, which was mainly for the Indian subcontinent as well as the Middle East.”

AsiaSat paid SpaceX $52.2 million for each of the launches, according to regulatory filings. [emphasis mine]

As has been noted frequently, that price of $50 million per launch is anywhere from half to a quarter what other companies have been charging. Asiasat got a great deal, and every commercial satellite and launch company in the world is aware of this.

9 comments

  • Michael J. Listner

    It’s notable that the $50 million dollar/launch is reportedly a discounted rate.

  • Granted, but their full price is still significantly cheaper than everyone else. And you can tell that these numbers are being taken seriously when every other launch company is scrambling to rethink its business model and rebuild its rockets.

  • Now that Space X is well-established, I’m wondering how long it will be before they make it to B-school textbooks. Sure, the business and operational models are still works-in-progress, especially considering the research component, but Space X is very much a change agent in the orbital lift market.

  • Competential

    Is it? Elon Musk has said that the price will be $4,100 per kilogram, and with 13 tonnes to LEO that is spot on $52 million.

  • fred k

    I think that SpaceX is losing money at this price. Here’s my back of the envelope calc:

    Labor costs:

    4000 employees, costing $200K per employee per year

    that’s 800 million per year, or 16 flights at $50 million accounting only for labor costs.

    Assuming that overhead, you need a higher flight rate than the current one. This is true with reusability or not.

    Caveats:

    SpaceX is getting a lot more than $50million per flight for Commercial cargo.

  • Pzatchok

    Janitors get paid 200,000 a year?

    A lot of people keep saying they are losing money on each flight but not a single one has proven anything yet.

    Considering the company is still in operation I would say they are charging just enough and not losing anything.

    Never assume what the old contractors charged the US government is the correct amount for simple profitability.

  • fred k

    200K is a very rough estimate averaged over all employee classes. It is an approximation that would include other overhead costs not directly counted as employee salary. Feel free to adjust it up or down.

    I think my numbers illustrate an interesting point: Overhead dictates a “high” Flight rate for effective amortization.

  • Edward

    Pzatchok,

    You are correct that defense contractors, over the decades, fell into an expensive trap when serving the government’s needs. For instance, government created FAR regulations that add tremendously to the costs of providing goods and services.

    Fred,

    If we adjust your $200K estimate down by 25%, then at $50 million per launch SpaceX makes a profit on its 13th launch. On the other hand, if SpaceX charges $60 million per launch, then we only have to reduce your estimate by a mere 10% ($180K) for SpaceX to make a profit on its 13th launch.

    It seems to me that SpaceX is looking for the correct price for its launch services, suggesting that your estimate is high.

  • fred k

    My guess is that SpaceX is shooting for 20+ flights per year to close their business case.

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