The European partnership building the new Ariane 6 rocket struggles to keep its costs down to compete with SpaceX.


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The competition heats up: The European partnership building the new Ariane 6 rocket struggles to keep its costs down to compete with SpaceX.

Ariane 5 has been a huge triumph, orbiting half of the world’s communications satellites and claiming 60% of the 2012 world market for geostationary launches. But while the rocket is extremely precise and reliable it is also hugely expensive, with a single-payload flight costing €150-200 million. However, even at that price Ariane 5 launches are understood to be loss-making for ESA’s launch operator, Arianespace. Its high cost in in large part blamed on its industrial organisation; while private-sector SpaceX has tailored the Falcon programme for low cost production, the Ariane 5 project is organised in part to satisfy the demands of European multi-national politics.

Speaking exclusively to Flight Daily News, ESA’s Stefano Bianchi, who heads the Vega programme and now spends much of his time dedicated to Ariane 6 development, stresses that the programme is on course as set out by ESA’s member states, and any major change of configuration would require ministerial agreement.

But, he says, he and his colleagues are confident they can bring Ariane 6 to fruition at the target launch cost of €70 million – a level that would match or even undercut SpaceX. [emphasis mine]

This story is in connection with the conflict between France and Germany about how to build Ariane 6. I have specifically highlighted the cost figures to illustrate once again the reality that everyone in the industry knows (except for one commenter on my webpage), that the cost of a SpaceX launch runs in the neighborhood of $60 to $100 million, one third to half the cost of Arianespace and significantly less than the cost of practically every other launch company.

Any company that realistically wants to compete with SpaceX has to be totally honest about these facts. Their customers are honest about them, for certain.

Update: The CEO of ULA admits that the real cost of its military launches averages about $225 million per launch.

He claims they can get the cost down to $100 million per launch, but only if the military makes a bulk buy of 50 launches from them, but even that barely competes with SpaceX’s accepted launch fees ranging from $75 to $100 million, per launch. No need to buy 50 rockets from SpaceX to get these prices.

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21 comments

  • wodun

    Kelly likes to compare the Falcon 9 with the space shuttle. I don’t know if his numbers are correct but it hardly matters because the space shuttle doesn’t exist as an alternative. We have to look at the best choice from existing options until we have a working time machine.

    He also confuses costs and prices as well as GAAP with government accounting.

  • Edward

    This post and your previous post (https://behindtheblack.com/behind-the-black/points-of-information/nasa-reveals-that-the-second-flight-of-sls-in-20210-might-not-be-manned) suggest that both Europe and the US have boondoggles as their major rockets, designed for political reasons rather than for efficiency or efficacy.

    Inefficiency and poor results are what we get when we allow government to run things, like a monopoly. This is what the Soviet Union (and other communist and socialist countries) got from their own government-run, monopolized economies. We are even paying high prices from the “bulk buys” that were supposed to reduce the price tag of rockets from the ULA monopoly.

    We are getting the opposite from space companies that are competing with each other to provide space access services. Efficiency and desirable results are what we are getting from their competitions.

    It is terrible that much of NASA and the ESA have been hijacked from performing science and research into the unknown so that they can satisfy political needs, as in the need of various legislators to redistribute the taxpayers’ hard-earned money.

    But then, we don’t exactly hold these politicians accountable for mishandling our money.

  • Edward

    If I am reading the update and its linked article correctly, 36 booster cores cost $8.1 billion, but buying 50 cores would cost only $5 billion. That is quite a price break.

    I wonder if we would have been “offered” that price if SpaceX weren’t competing with ULA.

  • Granted, Shuttle doesn’t exist, but the $500M launch cost doesn’t look so bad compared to $225M for an Atlas V. 50% greater payload to LEO, 7 people, and two weeks on station. It was a lot of bang for the buck. Of course, the problem was it tended to go bang about 2% of the time.

  • Pzatchok

    He also tends to forget to add in all the ground support costs worldwide for each launch, the original design and construction costs9spread out over each ships flights) and each ships refit costs.

    It might have only cost 200million to launch it that day but I bet it cost about a billion to get it ready over the previous year.

  • Pzatchok

    ULA’s numbers are total fluff. No way in hell did they get a 3 billion dollar price break. Few million per maybe but not billions.

    Plus no manufacturer is EVER going to lose money on a sale by giving a discount for a bulk buy.
    So the lower price of 100,000,000 per rocket core is still at a profit for them. A price they actually could have sold all of them for in the first place.
    Its not like the manufacturer has to add in the costs of building a new manufacturing facility to his costs. He already has that. If he is going by standard manufacturing cost pricing I bet he is making at least a 100% profit on each one still. He does have overhead costs, payroll and the often forgotten cost of materials replacement. He has to look ahead to find a source for new engines of course.
    But I bet the plan is to charge the US government development costs if he can’t find an already constructed engine.

  • Kelly Starks

    >… I have specifically highlighted the cost figures to illustrate once again the reality that everyone in the industry knows
    > (except for one commenter on my webpage), that the cost of a SpaceX launch runs in the neighborhood of $60 to $100 million,..

    ;/
    Just because you don’t listen, doesn’t mean others aren’t telling you otherwise.

  • Kelly Starks

    No I specifically stated, and showed the accounting and other records, that the shuttles flights direct costs were $50M a flight, but total program cost divided by # of flights was about $1.2B. Contrasting with $440m per Dragon/Falcon flights with only 1/4th as much cargo and no people. (GAO numbers, CBO, etc)

  • Kelly Starks

    >… It is terrible that much of NASA and the ESA have been hijacked from performing science
    > and research into the unknown so that they can satisfy political needs,…

    They always were primarily for political needs. Science was just done for PR. They usually didn’t even look at the data collected.

  • Kelly Starks

    They offered far better then that in the past.

    You have to remember that in space launches all the costs in overhead, little in per launch costs. So if you double the buy and shorten the time for delivery, the costs drop a lot.

    Economies of scale just like with everything else.

  • Kelly Starks

    You don’t get economics do you.

  • Pzatchok

    And were are you getting the 440 million per dragon flight because its not what they are charging their customers?

    I go by what a private company charges. When it involves a government bureau I tend to look at the more than what they say. Like in this case NASA’s total budget for the year minus all other projects. When they are working with billions a lot can be hidden.

    And have you accounted for each shuttle flights adjustment for inflation? It didn’t cost the same for the first launch as the last.

    And as for crew launches. Please the closest thing NASA has planned isn’t even slated for flight in the next 3 years let alone a manned flight.
    If space X makes 4 3 person flights a year at a quoted price of 225 million each flight then thats only about a billion to get 12 crew members onto the station. And back. not yet accounting for inflation thats way less than the shuttle cost per crew member. Add in the same amount of cargo flights at the same price and it still beats the shuttle after cost adjustments.

    And you have yet to tell us why Space X can’t charge less than 200 million per flight but the EU can.

    If the shuttle was that cost effective it would have taken ALL the private launches away from Ariane Space. But instead Ariane was always able to under cut the shuttle. Why.

  • Edward

    I am very much aware of the armies of bean counters and overseers that are foisted upon the defense contractors. The rooms filled with them are larger than the rooms of engineers. The overhead is unbelievable … and I have seen it with my own eyes.

    I still wonder if such a low price would have been mentioned if SpaceX were not offering a similar price.

    And if you think that the “big boys” can offer such a low price even with those armies of bean counters, why are you having such a difficult time believing that SpaceX can launch at a similar or lower price without all that extra overhead? That is economics.

  • Kelly Starks

    In bulk buys there is less paperwork, and a more streamlined and efficient production run, hence the lower cost.

    And by the way, that wasn’t the only overhead I was referring to. I also ment engineering testing, facilities, other fixed costs you actually need regardless just to support the craft and missions.

    As to
    >..why are you having such a difficult time believing that SpaceX can launch at a similar or lower price without all that extra overhead?

    Eliminating FAR contract bureaucracy BS lowers your costs about a factor of 4 in everything, including dev.
    Putting a elite, legendary team (Lockheed Skunk Works under Kelly Johnson, Scaled Composites under Rutan, etc) can get you a 30 fold cost reduction.

    Yet SpaceX, with a team of greenies worked insane hours, without proper training and material, skipping all the cost saving and quality efficiency processes etc, did all their R&D etc for 1/100th the cost of a similar gov program?

    SpaceX with a staffing level which would give you a billion a year in expenses, reportedly charges far less then that to customers?

    I have a difficult time believing you can do that without cutting some nasty corners, or smoke and mirrors.

  • Kelly Starks

    > And were are you getting the 440 million per dragon flight because its not what they are charging their customers?

    That’s the total cost to NASA for each Falcon/Dragon flight to the ISS. CBO numbers from 2011(?) that I’ve posted a few times.

    NASA had to pay SpaceX for a lot more then the flights, to get the flights. And absorbed support costs.

  • Kelly Starks

    > And have you accounted for each shuttle flights adjustment for inflation? It didn’t cost the same for the first launch as the last.

    No that was averaging all program costs since the program started in the ’70s. Inflation does skew it. As well as being a FAR contract with its buracray vrs a SR contract like SpaceX and Orbital have.

    Final years they weer doing about 4 flights a year for about $5B, so about $1.25B a flight for shuttle then. They companies that do the shuttle progam said they could drop that by a factor of 4 if they could get SAR like contracting rules, which would certainly be expected. If they could fix some system things and do some simple refits (access hatch’s??! Close Michaud and more ET construction to a factory already working, etc) you could likely drop costs another order of mag.

    >..If the shuttle was that cost effective it would have taken ALL the private launches away from Arianne Space. But instead
    > Arianne was always able to under cut the shuttle. Why.

    Ok, now your just being silly. shuttle and Arianne are gov run and funded programs. They charge whatever was politically convenient regardless of costs, and they are driven to fly or not fly what the gov. decides (from ITAR to agency whims). Shuttle was ordered out of the commercial launch business entirely in ’87, while as a mater of national pride Arianne was to be a dominant player. So assuming one costing less then the other to operate would impact what they charge customers, or what customers they would decide to carry, etc. is ridicules. Its like thinking the Army would of course switch to Russian tanks if they were more economical.

  • Edward

    > I have a difficult time believing you can do that without cutting some nasty corners, or smoke and mirrors.

    Smoke and mirrors are an illusionist’s trick. I doubt that the successful delivery of supplies to ISS and satellites to orbit are illusions.

    I have watched as bureaucrats added countless unnecessary corners, so there are plenty of corners that need to be cut off and forever forgotten. Each of those corners makes the hardware more expensive, and eventually it becomes less expensive to add yet another expensive corner than to “risk” a billion dollar satellite (which should only cost a tenth of that). Soon, so many corners and so much bureaucracy have been added that you end up with ten-billion dollar boondoggles (e.g. Constellation, Orion, SLS, ISS, STS) instead of hundred million dollar rockets or spacecraft. And you only get 1% of what you paid for.

    But, Kelly, you think that is the goal of NASA in the first place (if that is the case, what a waste of good talent and money, and what a loss of exploration). Let SpaceX, Orbital Sciences, Blue Origin, Sierra Nevada, Boeing, XCOR, Virgin Galactic, Armadillo, Bigelow, etc. have a different goal — good service at low cost. Maybe they can show the bureaucrats how it *should* be done, and force them to do it cheaper, better, and faster.

    SpaceX’s “green” people have done better than the scientists, engineers, and techs of the 1950s (despite their having a decade of experience with (exploding) rockets). I suspect that the SpaceXers are not nearly as green and are better trained and managed than you think they are.

  • Kelly Starks

    >> I have a difficult time believing you can do that without cutting some nasty corners, or smoke and mirrors.

    > Smoke and mirrors are an illusionist’s trick. I doubt that the successful delivery of supplies to ISS and satellites to orbit are illusions.

    You sound like the folks who claimed the shuttle was proved completely safe after 20 successful flights. A couple non crashes doesn’t mean your building a good product. You have to actually methodically test things, check your requirements lists, review and sign them off. You know they things professional commercial aircraft, space craft (car, appliance) makers do.

    You seem to assume all modern engineering efforts and processes are just busywork that all companies (except SpaceX) are to stupid to realize doesn’t benefit them, and all their customers just except since they don’t worry about costs. Really, profession manufacturers do that so things don’t fail and kill people and trash things.

    >…I suspect that the SpaceXers are not nearly as green and are better trained and managed than you think they are.

    And how many folks do you know in the business who got back stage tours or who know folks working there?

    And again, the high failure rate.

  • Edward

    Kelly,

    You are the most Orwellian person I think I have ever discussed any topic with. You certainly like to use words differently:

    “High failure rate” for successful flights
    “Subsidy” for profit
    “green” for capable
    “cutting nasty corners” for reducing bureaucracy (strangely, you consider that less paperwork is OK in bulk buys, but not during operations)

    > And how many folks do you know in the business who got back stage tours or who know folks working there?

    Yep, you got me there. The SpaceX employees that I have talked to (not just talked to someone who got a tour) seemed excited to work there, not pessimistic about the company’s abilities or future.

    Some of them that I spoke with further even thought that getting 30 signatures to make a change was too much. I am not making this up, that is what they said, and that is when I told them that they were not exaggerating (they already knew that, as they came from bureaucratic companies, too) because I once actually *did* have to get 30 signatures (32, minimum, to be exact) to make a change. Plus, (again, I am not making this up) I had to get permission from my bosses bosses bosses boss to make a change, even changes that were *required* by our bureaucratic processes. And this was for each and every change, and there were a lot of changes over that time period.

    And that was only one small part of the massive bureaucracy that exists inside that “OldSpace” company.

    If I sound frustrated to have worked at such a bureaucracy, or that such a bureaucratic system even exists, I was and am.

  • g.g

    “the $500M launch cost”

    Didn’t you mean the $1.2B launch cost?

  • g.g

    “That’s the total cost to NASA for each Falcon/Dragon flight to the ISS. CBO numbers from 2011(?) that I’ve posted a few times. NASA had to pay SpaceX for a lot more then the flights, to get the flights. And absorbed support costs.”

    NASA paid SpaceX over five billion dollars? Because that’s what twelve times 440M amounts to.

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