Europe finally begins to realize that reusability cuts costs
Capitalism in space: Faced with stiff and increasing competition from SpaceX, European governments are finally beginning to realize that their decades of poo-pooing the concept of rocket reusability might have been a big mistake.
In what was likely an unexpected question during a Nov. 19 interview with Europe 1 radio, French Economy and Finance Minister Bruno Le Maire was asked if SpaceX meant the death of Ariane.
“Death? I’m not sure I’d say that. But I am certain of the threat,” Le Maire said. “I am worried.” Le Maire cited figures that are far from proven — including a possible 80% reduction in the already low SpaceX Falcon 9 launch price once the benefits of reusability are realized. “We need to relfect on a reusable launcher in Europe, and we need to invest massively in innovation,” Le Maire said.
Then there was a report out of Germany that has concluded that SpaceX commitment to reusability is about to pay off.
The article also cites those in Europe and with the U.S. company ULA that remain convinced that they can compete with expendable rockets. In reading their analysis, however, I was struck by how much it appeared they were putting their heads in the sand to avoid facing the realities, one of which has been the obvious fact that SpaceX has been competitively running rings around them all. This is a company that did not even exist a decade ago. This year it very well could launch more satellites than Europe and ULA combined.
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Capitalism in space: Faced with stiff and increasing competition from SpaceX, European governments are finally beginning to realize that their decades of poo-pooing the concept of rocket reusability might have been a big mistake.
In what was likely an unexpected question during a Nov. 19 interview with Europe 1 radio, French Economy and Finance Minister Bruno Le Maire was asked if SpaceX meant the death of Ariane.
“Death? I’m not sure I’d say that. But I am certain of the threat,” Le Maire said. “I am worried.” Le Maire cited figures that are far from proven — including a possible 80% reduction in the already low SpaceX Falcon 9 launch price once the benefits of reusability are realized. “We need to relfect on a reusable launcher in Europe, and we need to invest massively in innovation,” Le Maire said.
Then there was a report out of Germany that has concluded that SpaceX commitment to reusability is about to pay off.
The article also cites those in Europe and with the U.S. company ULA that remain convinced that they can compete with expendable rockets. In reading their analysis, however, I was struck by how much it appeared they were putting their heads in the sand to avoid facing the realities, one of which has been the obvious fact that SpaceX has been competitively running rings around them all. This is a company that did not even exist a decade ago. This year it very well could launch more satellites than Europe and ULA combined.
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
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
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.
As long as re-usability is properly executed.
The Space Shuttle was NEVER executed the correct way. It was essentially not re-usable.
The Falcon is about 50% re-usable. When the whole of the second stage is re-usable then it will get real cheap to fly.
Counting the just the 1st stage, Falcon 9 is already way over 50% reusable. Adding in the fairing will get it to 85% or so reusable.
SpaceX could have lots of room to cut prices and still make a profit but they also have to look at revenue. Cutting the price means they not only have less profit but less money to spend on R&D. They could cut prices by 80% and still make a profit but would that leave them enough cash to realize their long term goals?
I’m not sure how many launches they can do a year from Florida but at their current prices, they must be within striking distance of their launch capacity. It will be some time yet before their Texas facility is operational and not all customers can benefit from launching in California.
They still have four major projects eating up capital, the Dragon Crew, F9 Block V, FH, and BFR/BFS. Some of those will drop off soon but even then, their investors might appreciate some healthy margins for a time.
The point of cutting prices is to generate more customers and to price out the competition. They already price out the competition and they might be able to secure enough customers at current prices, or close to them, to meet launch capacity.
I suspect that they wont be cutting prices too drastically as long as there is excess launch capacity and a lack of competition. But they will be well positioned for when capacity, demand, and competition grow.
Dick Eagleson wrote: “Counting the just the 1st stage, Falcon 9 is already way over 50% reusable.”
The first stage has 9 engines and the upper stage has only 1. The engines are an expensive part. The first stage is WAY over 50%.
Dick Eagleson wrote: “Adding in the fairing will get it to 85% or so reusable.”
I was surprised at just how expensive those fairings are: about $5 million. That is pricey.
It is no wonder that SpaceX has abandoned the reusable upper stage in favor of a reusable BFS.
wodun,
Block V development should finish up in a few months, and much of the design team may already be assigned to BFR. Falcon Heavy development likewise will finish up soon, allowing for additional team members on BFR and BFS. Dragon Crew development should be complete in a year or so, leaving pretty much the entire development crew for the next Big Falcon project.
I suspect that SpaceX’s plans for developing Big Falcon in a short 5-year time frame because they cannot count on being ahead of the competition (so far only Blue Origin, and mild competition from ULA) for too much longer. New Shepard is not competition for Falcon 9, but New Glenn will be.
I would not be surprised if SpaceX plans to leave the standard 10 ton launch market to New Glenn, when the Falcon 9 Block Vs are exhausted, because SpaceX should be in business with Big Falcon. SpaceX already left the small launch market to other companies, because the market was not large enough at the time. Now that the small launch market is coming into play,
wodun,
You got it. SpaceX isn’t going to leave any money on the table it doesn’t have to. But it will continue to take costs out of its operations wherever it can to maintain the best possible margins when actual price competition does show up.
For now, range limitations are likely to become an issue as the several nascent smallsat launch companies reach operational status over the next two years and want launch slots at Kennedy/Canaveral. USAF’s 45th Space Wing is talking about gearing up to handle 48 launches per year as a goal, but SpaceX, alone, may account for half that number out of Kennedy/Canaveral as soon as next year.
I think Dragon 2, F9 Block 5 and FH have already all passed their peak points of capital consumption. The coming year should see all three generating their first revenues. The new BFR plant and the build-out of the Boca Chica Spaceport will account for most of SpaceX’s capital expenditure in 2018.
Edward,
An F9 payload fairing doesn’t cost $5+ million, that’s just its pro-rata contribution to the price of a standard F9 launch.
I think the engineering development for Dragon 2 and F9 Block 5 is already essentially complete. With the possible exception of that Raptor-powered upper stage for it that USAF seems to want, the same is true of FH. I think much of the SpaceX engineering staff is already neck-deep in BFR work.
Dick Eagleson wrote: “An F9 payload fairing doesn’t cost $5+ million, that’s just its pro-rata contribution to the price of a standard F9 launch.”
I missed that distinction when learning of the $5 million price tag. Cost: what it takes to produce; price: what it sells for. The price paid by the customer becomes part of his cost to produce his own end product.
“I think the engineering development for Dragon 2 and F9 Block 5 is already essentially complete.”
I tend to include test up to first launch as part of development, but then again I spent time in test as well as design and assembly. By the time something ends up in test, most of the designers are off on another project (e.g. Big Falcon), so when something goes wrong (e.g. an engine fire), a designer(s) may have to be brought back to help fix the problem.
When I first started out, I worked in a group so small that we designers also assembled and tested what we made. That gave us first hand knowledge of where we screwed up. Hard learned lessons for future designs. My last job was in test, where we discovered where the design and assembly groups had screwed up.
As noted in the article, Europe is now learning its own lessons from not recognizing, a few years ago, SpaceX and Blue Origin as serious contenders.
@ Edward
I suspect that SpaceX’s plans for developing Big Falcon in a short 5-year time frame because they cannot count on being ahead of the competition (so far only Blue Origin, and mild competition from ULA) for too much longer.
I hope you so!
I would not be surprised if SpaceX plans to leave the standard 10 ton launch market to New Glenn, when the Falcon 9 Block Vs are exhausted, because SpaceX should be in business with Big Falcon. SpaceX already left the small launch market to other companies, because the market was not large enough at the time. Now that the small launch market is coming into play
Depleting the F9 Block V could take decades depending on how big the fleet is and how many times each is reused. This is good because the future is so uncertain. Will the BFR really cost as much to the customer as a F9? Awesome if true.
I am not well versed in GEO satellites but reports of declining demand are a little troubling. It may not be wise to abandon any markets.
@ Dick Eagleson
For now, range limitations are likely to become an issue as the several nascent smallsat launch companies reach operational status over the next two years and want launch slots at Kennedy/Canaveral. USAF’s 45th Space Wing is talking about gearing up to handle 48 launches per year as a goal, but SpaceX, alone, may account for half that number out of Kennedy/Canaveral as soon as next year.
Is BO also working on alternative launch sites?
It really looks like any purely commercial launch would be handled better off government property so that government/commercial launches don’t conflict with scheduling. Might not be much of a problem now and it is a good problem to have but just shows how much thought SpaceX has put into the future.