Another Falcon 9 launch success
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.
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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.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
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You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
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.
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.
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.
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.
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.
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.
My guess is that SpaceX is shooting for 20+ flights per year to close their business case.