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The Dinosaurs of the Launch Industry

They were just hit by an asteroid, whether they realize it or not.

by
Rand Simberg

Bio

December 8, 2013 - 11:44 am
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Tuesday’s communications-satellite launch from Cape Canaveral didn’t get much attention from the mainstream media, but it will be viewed as an historic event. Delivered by Space Exploration Technologies (SpaceX), it represented several firsts. It was the first launch of their new version of the Falcon from that location, it was the first successful restart of its upper-stage engine (it failed to do so in the previous, first flight, though it wasn’t mission critical), it was the first commercial payload for the vehicle, it was the first delivery of a satellite to geostationary orbit by the company, and it was the first commercial geostationary delivery of a foreign satellite by any U.S. launcher in many years.

The launch went flawlessly, though executives at almost every other launch company on the planet were likely at least secretly rooting for its failure, because a successful flight spells doom for the high-priced launch industry as we know it. SpaceX charged SES, the satellite owner, about a third of what they would have paid for the flight on (for example) a European Ariane V. At only $60M list price (SES got a slight discount as initial guinea pig), they are anywhere from seven to ten times less than the U.S. United Launch Alliance’s (ULA) Delta or Atlas, depending on how one does the accounting. Even the Chinese have said they don’t know how they can compete on price. And the Russians are in the process of consolidating their industry into a single company, something unlikely to drive down their costs, either.

The high prices of the American heavy Delta IV and Atlas V launchers, developed in the 1990s for the Air Force, combined with restrictions related to the International Trade in Arms Regulations (ITAR) had kept the American vehicles out of the foreign launch market for years, so SpaceX’s success in wooing SES is a watershed event that could restore America as the leader in this industry. And ULA doesn’t have any good prospects for reducing their prices much, particularly if their flight rate declines as the Air Force starts to award some of its launches to SpaceX as it proves its reliability over the next several flights. Moreover, the Atlas is dependent on the Russians for its RD-180 engines (which they’ve been threatening to cut off), and building them domestically would increase their costs even more. As Martin Halliwell, SES’s chief technology officer, said, SpaceX’s success would “shake the industry to its roots.”

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Top Rated Comments   
So SpaceX has basically designed the Model T of launch vehicles. And Free Enterprise scores another victory.
40 weeks ago
40 weeks ago Link To Comment
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All Comments   (37)
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39 weeks ago
39 weeks ago Link To Comment
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39 weeks ago
39 weeks ago Link To Comment
Guys - there is less money, then there is SpaceX. If they are an order of magnitude cheaper, they can have a much higher failure rate than ULA and still be a bargin for the goverment.

Wait till the Falcon heavy is launched - how long with the SLS last with that competition?
40 weeks ago
40 weeks ago Link To Comment
NASA went wrong with the Shuttle. The Shuttle was originally designed to be a much smaller passenger and light cargo taxi that would have had the quick turn around originally promised and there could have been many more of them. Instead a committee got hold the design. Since the few shuttles became NASA's workhorse, they delayed many projects particularly when they were wasted carrying up bits of the ISS.

Had they gone with the smaller, original version and continued building a few steadily updated Saturn V's per year for the really heavy lifting, things would have worked better. A small continuing run of Saturns would still be useful for sending larger and more capable probes into deep space and large payloads into low orbit.
40 weeks ago
40 weeks ago Link To Comment
Go Space X. I'd buy stock if it was possible. The next phase is getting to re-use the stages. If they can pull this off, it'll be revolutionary.
40 weeks ago
40 weeks ago Link To Comment
SpaceX has been heavily subsidized by the taxpayers for the development of its launchers - Think of it as the Solyndra of space. It is in no way "private enterprise." Do the research. One of the reasons the so-called "government" contractors such as ULA are expensive is because of the excessive oversight regulations place upon them because of "Mil Spec." SpaceX, if it wants to compete in the government contract area, will NOT be immune to these costs. The US government will not fly a billion dollar national defense asset on one of Elon Musk's launchers - period.
40 weeks ago
40 weeks ago Link To Comment
SpaceX's very first launch had an Air Force/OSD satellite on board, with a high expectation that the launch may fail (which it did). The Govt' doesn't build only billion dollar satellites. Do the research.
40 weeks ago
40 weeks ago Link To Comment
Greeting skeet shooter,

Whenever an author covers any events concerning Tesla, Space X, or Solar City, it seems someone will feel compelled to post your exact comment. It isn't that your comments aren't legitimate, but it seems unjustly critical. Every major industry does huge business with the government, and every major industry benefits from government subsidies and services.

Without Space X, America would have no in-country access to the ISS. Also, since the SLS is currently mothballed, Space X and other private providers are America's only access to conduct any sort of extra-orbital science or engineering.

America should have been on the Moon, with permanent facilities, a decade ago. This is not some sci-fi, fan-boy, fantasy. The Nation that controls low Earth orbit, and by extension controls the Moon, controls planet Earth.
40 weeks ago
40 weeks ago Link To Comment
I think the comment was appropriate for this article because the article was not a report on SpacEx as much as a comparison (based on arguable assumptions) between SpacEx and ULA. The comment simply addresses the differences between the two business practices. Besides, try to ever mention anything even as innocuous as a milestone regarding MPCV in any space blog and you will be immediately piled on by SpacEx fanboys. Whether or not it is justified.
40 weeks ago
40 weeks ago Link To Comment
I was / am very excited about MPCV. Hopefully, a future administration will see its value, and bring the concept to fruition.

skeet is absolutely correct in that the investment made by U.S. taxpayers in the space industry was already immense long before primadonnas like Elon Musk were even a sparkle their mothers' eyes. And yet, wasn't this always the goal? As with the great sailing ships of old, as with the railroads, aviation, computer science, and etc., government pays for and supports these sciences until a suitable civilian industry rises to take ownership.

Lets agree to give three cheers the dogged engineers and scientists, our roster of fearless rocket jockeys, the visionaries, and yes, even the political figures, who have brought the science of space exploration to a point where privately owned companies can field workable orbital vehicles.
40 weeks ago
40 weeks ago Link To Comment
Hi troll!

The SpaceX schedule has all the non-US gov customers its always had, and its executing forty year old concepts and their own tech what NASA never will--make the exploitation of off-Earth resources profitable to people who haven't bought a senator or representative.

The Air Force will buy space access on SpaceX rockets and be glad of it.
40 weeks ago
40 weeks ago Link To Comment
I'm not clear on what you are getting at. SpaceX doesn't compete with NASA; they compete with private industry. NASA is a customer, as is the USAF. NASA created the Commercial Resupply Services program to take advantage of new launch markets by offloading risk to private industry. NASA put out the RFP and selected SpaceX (and Orbital Sciences). The contract is for $1.6 billion. They've also selected SpaceX for the manned version of Dragon and now for managing Pad 39A.

These are government initiatives, not SpaceX's, and could not have been done in the past because the launch markets were not there.

Hence skeet's comment is very relevant. If you read the article and comments here, there is very anti-government portrayal as inefficient and expensive which is not the case here or historically in the space program. The loser here is not government, but private industry in the form of the incumbent contractors with business models built on cost-plus contracts. This is an example of smart, efficient government developing initiatives to work with smart, efficient private industry to maximize their complementary comparative advantages. It is also an example of disruptive innovation of business models in private industry supplanting other business models in private industry.

There are no negatives about government here, only competition between two private industry models. So the anti-government and pro-private implications and comments are entirely misplaced. The real story here is pro-"smart government" and pro-"smart private" and anti-"inefficient private".
39 weeks ago
39 weeks ago Link To Comment
Sorry, I don't consider myself a "troll." Just someone who's worked in the space business for over 30 years and happen to understand the playing field. It would be great if SpaceX succeeds, and I hope it does. My retirement doesn't depend on it and I don't have a dog in the fight. That said, the "subsidies" are true.
40 weeks ago
40 weeks ago Link To Comment
Wow!
40 weeks ago
40 weeks ago Link To Comment
Just as with almost everything else PRIVATE ENTERPRISE does it better and cheaper than Government. As all those OBOZOCARE supporters are finding out to their cost.
40 weeks ago
40 weeks ago Link To Comment
I don't think you understand the circumstances. This is not private vs government; they are both on the same side here and both doing smart things on very smart gov't initiative. It is the incumbent private industry that is the loser here (Boeing, Lockheed Martin, etc.), not government. More details in my comment above: http://pjmedia.com/blog/the-dinosaurs-of-the-launch-industry/?singlepage=true&show-at-comment=404708#comment-404708
39 weeks ago
39 weeks ago Link To Comment
Hopefully all launches of American satellites military or commercial will be from U.S. soil by U.S. companies and not subject to spying.

Hopefully even a President like Clinton can't mess us up now by giving away tech.
40 weeks ago
40 weeks ago Link To Comment
That's not hope, that's wishful thinking.
40 weeks ago
40 weeks ago Link To Comment
SpaceX are the "right" brothers. Failgov are the "wrong" brothers.
40 weeks ago
40 weeks ago Link To Comment
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