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Russia cuts Proton price to match SpaceX

Capitalism in space: Dmitry Rogozin, the head of Roscosmos, yesterday said that Russia will cut costs so that the price they charge for a Proton launch will match SpaceX.

Russia is struggling to regain its Proton customer base after the launch failures of the past few years. I don’t think matching SpaceX’s prices will do it. Right now satellite companies view them as offering a less reliable product, and until they can prove this impression false they need to offer their rocket for even less that SpaceX.

This is in fact what SpaceX did at the beginning. Its rockets were untested and thus risky to use. To compensate they offered a cheaper way to space. Now Russia has to do the same, or the business will continue to go to others. I wonder if Rogozin understands this.

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  • Col Beausabre

    This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object. While a firm that loses money on every launch will sooner or later go out of business, in its case more government money gets pumped back in. Yes, I know that’s a boon for the customers – Russian taxpayers end up subsidizing their launches – but no private entity can compete against a country’s resources. Remedies – 1) The WTO (slow and liable to cheating by Russia) 2) Sanctions (forbid any US firms or firms wanting to do business in the US or with US based firms from using Roscosmos)

  • mpthompson

    Col Beausabre, Remedy 3, become even more competitive. SpaceX knew going into this market that the majority of their competition is government owned/controlled entities. Also, I doubt they were naive to believe the market wouldn’t respond in some manner to their lower prices and not have contingency plans in place.

    In the end, this will force SpaceX to become even more competitive. Something which they have demonstrated great skill at and will be good for the market overall. Even with the price cuts, the burden seems to be on Roscosmos to prove that they can deliver “reliable” Proton launches at the reduced costs.

    I believe the bigger threat to SpaceX is that the market may simply not respond as fast to lower launch costs (ie. grow faster) than they anticipated. If there were clear signs the launch market was growing faster, anti-competitive practices such as this would be less significant.

  • eddie willers

    This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object.

    Rockets that fail will find no market, regardless of price.

  • Tom Billings

    There is also the point that in the black economy of Russia, outside of official budgets, ROSCOSMOS has actually been a supplier of funds, through corruption, to those who are Putin vassals.

    In order to cut its Proton prices, ROSCOSMOS will have to end that flow to Putin’s Oligarchs. Whether this can first be done is unknown. Whether it can be sustained without the loss of those oligarchs from Putin’s supporters remains deeply in doubt.

  • Edward

    Col Beausabre wrote: “This is the beginning of the end for SpaceX. Roscosmos is a government entity so price is no object.

    I think the opposite is the case. This is another sign that Roscosmos and some or many of its rockets are in serious trouble. With the pricing being the same, SpaceX’s Falcon 9 is the preferred rocket. Even if the price of Proton is further reduced, only customers with redundant payloads (e.g. constellations that can afford to lose a satellite or so without greatly affecting their business plan) are likely to risk a Proton launch. This was seen with Falcon 9 and the Air Force launching GPS satellites in the early days; there were enough of these satellites that they could lose one and still build their replacement constellation.

    ULA, on the other hand, has a very strong reliability record. This reliability has been high in their marketing strategy. Although they have worked hard to reduce their launch prices, they have not felt compelled to try to match SpaceX prices, yet they do not fear that they are going out of business.

  • pzatchok

    Russia is losing not just the launches but the only source of profit they have a hope of keeping.
    The US Astronaut deliveries.
    The 400 million from that alone kept them flying.

    They will need at least half a billion a year to replace the cash America gave them.
    They will never make that up in volume. They can not even afford that on their own economy. You can not just print the cash and hope, even in a communist state. Inflation will happen.

    This is like Germany giving away the Trabant just to keep the factory open. Even if people accepted them they would never go any buy the next one.

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