Launch has always been a terrible way to make money. Reuse doesn't change that equation.But there's lots of other ways to make money. Commsats are much more effective....which is why SpaceX is entering the commsat market....and SpaceX does envision increased launch.And I think you left out one part of your calculation: more total payload per launch. That's part of how SpaceX intends to lower the cost by a factor of >100x.SpaceX's constellation would require thousands of satellites to be launched per year. And Mueller envisions them eventually growing very large (meaning you're not going to be cluster launching them much). So SpaceX most certainly envisions thousands of launches in far less than a century.
Despite my excitement about the increased access to space thanks to reusability, I am still struggling to fully reconcile myself with the Business Case for full reusability, from a launch provider point of view.Basically, if you take it to its logical conclusion where launch costs indeed drop to say 1% of their current level as per Elon's dream, you will end up with a tremendously high ratio between the initial cost of the asset (the reusable rocket) and the revenue earned per each individual launch.So any payback calculation from a launch provider's point of view, for building or buying a single launch vehicle, will run into the hundreds of launches just to break even.And that's before you even buy/construct a second or third vehicle to serve as backup in case of inevitable failure or repair requirements. Then you may be talking about a thousand launches just to earn back the initial cost of the asset.And if you then factor in the inevitable loss of a launch vehicle at some point, this high asset cost/revenue ratio means the loss hits you much harder than a loss in the current launch environment would, from a financial point of view.Anyway, it is exciting times for space enthusiasts like us, but it seems almost like Elon's greater goal of lowering the cost of access to space is killing the very golden goose that his company is earning its revenue from. Now, he can do that because he is the first in this space, but as I said before, unless you suddenly have tens of thousands of launches per year - which seems a century away at least - the low margin high volume nature of the business model seems to discourage more entrants into this market. And seems to make profit prospects based on being purely a launch provider rather gloomy, in my view.No doubt a lot of unexpected and exciting stuff will happen, but as it stands I am struggling to figure out the working business model for the end state that Elon has in mind.
I am struggling to figure out the working business model for the end state that Elon has in mind.
Quote from: M.E.T. on 07/03/2017 08:01 amI am struggling to figure out the working business model for the end state that Elon has in mind.I am at a loss trying to imagine the failure mode you are afraid of. The starting part is clear:(1) Launch becomes cheaper(2) Now every launch brings in much less revenue, and every launch failure is more painful than beforebut then what? "Therefore launch providers operate at a loss and go bankrupt?" Why would that happen?Are all low-cost airlines bankrupt now, and we are back to the days where taking a flight was a bit of a luxury? No, of course. _Some_ do go bankrupt, but those who find the right balance between "minimize prices" and "be profitable" survive. Overall, it results in more efficient passenger air transport. Yes, this means that being an airline is not easy, but the goal of economy is not to make airlines lives easy - its goal is to optimize all kinds of economic activity.
Quote from: gospacex on 07/03/2017 01:13 pmQuote from: M.E.T. on 07/03/2017 08:01 amI am struggling to figure out the working business model for the end state that Elon has in mind.I am at a loss trying to imagine the failure mode you are afraid of. The starting part is clear:(1) Launch becomes cheaper(2) Now every launch brings in much less revenue, and every launch failure is more painful than beforebut then what? "Therefore launch providers operate at a loss and go bankrupt?" Why would that happen?Are all low-cost airlines bankrupt now, and we are back to the days where taking a flight was a bit of a luxury? No, of course. _Some_ do go bankrupt, but those who find the right balance between "minimize prices" and "be profitable" survive. Overall, it results in more efficient passenger air transport. Yes, this means that being an airline is not easy, but the goal of economy is not to make airlines lives easy - its goal is to optimize all kinds of economic activity.Good question. I guess it's the difficulty in seeing the type of volumes in orbital launches that we see in air travel. It is easy to talk about 10,000 orbital launches a year, but it just seems to boggle the mind thinking about all the technological and regulatory hurdles that will have to be cleared to get there.I'm sure it will happen. I'm just pointing out that I find it difficult to connect all the dots yet.
Quote from: gospacex on 07/03/2017 01:13 pmQuote from: M.E.T. on 07/03/2017 08:01 amI am struggling to figure out the working business model for the end state that Elon has in mind.I am at a loss trying to imagine the failure mode you are afraid of. The starting part is clear:(1) Launch becomes cheaper(2) Now every launch brings in much less revenue, and every launch failure is more painful than beforebut then what? "Therefore launch providers operate at a loss and go bankrupt?" Why would that happen?Are all low-cost airlines bankrupt now, and we are back to the days where taking a flight was a bit of a luxury? No, of course. _Some_ do go bankrupt, but those who find the right balance between "minimize prices" and "be profitable" survive. Overall, it results in more efficient passenger air transport. Yes, this means that being an airline is not easy, but the goal of economy is not to make airlines lives easy - its goal is to optimize all kinds of economic activity.Good question. I guess it's the difficulty in seeing the type of volumes in orbital launches that we see in air travel. It is easy to talk about 10,000 orbital launches a year, but it just seems to boggle the mind thinking about all the technological and regulatory hurdles that will have to be cleared to get there.
Quote from: M.E.T. on 07/03/2017 01:42 pmQuote from: gospacex on 07/03/2017 01:13 pmQuote from: M.E.T. on 07/03/2017 08:01 amI am struggling to figure out the working business model for the end state that Elon has in mind.I am at a loss trying to imagine the failure mode you are afraid of. The starting part is clear:(1) Launch becomes cheaper(2) Now every launch brings in much less revenue, and every launch failure is more painful than beforebut then what? "Therefore launch providers operate at a loss and go bankrupt?" Why would that happen?Are all low-cost airlines bankrupt now, and we are back to the days where taking a flight was a bit of a luxury? No, of course. _Some_ do go bankrupt, but those who find the right balance between "minimize prices" and "be profitable" survive. Overall, it results in more efficient passenger air transport. Yes, this means that being an airline is not easy, but the goal of economy is not to make airlines lives easy - its goal is to optimize all kinds of economic activity.Good question. I guess it's the difficulty in seeing the type of volumes in orbital launches that we see in air travel. It is easy to talk about 10,000 orbital launches a year, but it just seems to boggle the mind thinking about all the technological and regulatory hurdles that will have to be cleared to get there.Lower launch costs don't need dramatic increases in launch volume (although it should lead to an increase, economics 101). Elon demonstrates this experimentally right now: "merely" by making the rocket "the right way" and optimizing his operations for cost, he steals market from existing players. It works even with current volume, because all pre-existing players were inefficient (they were either government programs or monopolies).
That is a reduction between first and second generation reusable vehicles of a factor of 6. If the next generation reusable LV can match the reduction factor then the price per kg drops to about $500/kg.
Quote from: oldAtlas_Eguy on 07/03/2017 04:25 pmThat is a reduction between first and second generation reusable vehicles of a factor of 6. If the next generation reusable LV can match the reduction factor then the price per kg drops to about $500/kg.The difference between the DC-3 and the Constellation was reliability and improved payload. The 707 brought a step change in lower maintenance costs and fast turnaround times. It appears to me that SpaceX Falcon is in that region where reliability is being evaluated - and if proven cost-effective, the next iteration of Falcon - supposedly the last - will see lower launch costs.
Despite my excitement about the increased access to space thanks to reusability, I am still struggling to fully reconcile myself with the Business Case for full reusability, from a launch provider point of view.[rest of the post omitted]
STS at $500M per launch with a LEO payload capability of 25mt max is $20,000/kg.SpaceX's F9 at $50M per launch of a used booster and recovery ASDS with a LEO payload capability of 15mt max is $3,333/kg.That is a reduction between first and second generation reusable vehicles of a factor of 6. If the next generation reusable LV can match the reduction factor then the price per kg drops to about $500/kg.Also that in ticket price for passengers goes from the F9/D2 of $20M/passenger to $3.4M/passenger.A forth generation reusable LV would then drop the passenger ticket price to orbit to just $500K.The fifth generation would then get down to $80K per passenger. The timeline is that in 5 years the 3rd generation reusable vehicles would start flying. 20224th - 20275th - 2032At the 5th generation prices the tourist alone would be in the high hundreds to a few thousand. Now add the capability to visit the Lunar surface at $400K or go to Mars at $500 to $1M. And the volume of persons going into orbit will be very large >100X compared to our current 12/year rate (which just dropped to 10 because of high costs).An FH with reusing the US and faring and able to recover the boosters too could come down to a Price of $30M and deliver to LEO 20mt is $1,500/kg a factor of 2 reduction which could happen in 3 years or less. In actauality that reduction could be here almost immediately with FH without reusing the US because a all used booster FH at a price <$80M (possibly as low as $60M) could deliver that $2,000 to $1,500/kg as still part of the 2nd gen vehicle. This would be a reduction of a factor of 10 between it and STS.If this is achieved then the 4th generation reusable LV would achieve the very large passenger counts and bulk to orbit payload tonnage for $20K to orbit for passengers and $20/kg for cargo.4th generation reusable vehicles could be as little as 10 years into the future.
Quote from: oldAtlas_Eguy on 07/03/2017 04:25 pmSTS at $500M per launch with a LEO payload capability of 25mt max is $20,000/kg.SpaceX's F9 at $50M per launch of a used booster and recovery ASDS with a LEO payload capability of 15mt max is $3,333/kg.That is a reduction between first and second generation reusable vehicles of a factor of 6. If the next generation reusable LV can match the reduction factor then the price per kg drops to about $500/kg.Also that in ticket price for passengers goes from the F9/D2 of $20M/passenger to $3.4M/passenger.A forth generation reusable LV would then drop the passenger ticket price to orbit to just $500K.The fifth generation would then get down to $80K per passenger. The timeline is that in 5 years the 3rd generation reusable vehicles would start flying. 20224th - 20275th - 2032At the 5th generation prices the tourist alone would be in the high hundreds to a few thousand. Now add the capability to visit the Lunar surface at $400K or go to Mars at $500 to $1M. And the volume of persons going into orbit will be very large >100X compared to our current 12/year rate (which just dropped to 10 because of high costs).An FH with reusing the US and faring and able to recover the boosters too could come down to a Price of $30M and deliver to LEO 20mt is $1,500/kg a factor of 2 reduction which could happen in 3 years or less. In actauality that reduction could be here almost immediately with FH without reusing the US because a all used booster FH at a price <$80M (possibly as low as $60M) could deliver that $2,000 to $1,500/kg as still part of the 2nd gen vehicle. This would be a reduction of a factor of 10 between it and STS.If this is achieved then the 4th generation reusable LV would achieve the very large passenger counts and bulk to orbit payload tonnage for $20K to orbit for passengers and $20/kg for cargo.4th generation reusable vehicles could be as little as 10 years into the future.If the shuttle for 1st generation reusable and Falcon 9 2nd gen, introducing cost effective rapid reuse, I assume BFR would be 3rd gen, introducing bulk transport efficencies to spaceflight. What would 4th gen be, to get a 6-fold reduction in cost over BFR? There would have to be some new technoligy to pull off gen 4. Perhaps some kind of practical fusion pulse drive, taking the Orion NPP concept for superheavy lift in a more enviromentally friendly direction?In any case, I dont see gen 4 happening anywhere near as fast as gen 2 and gen 3, since gen 2 could have happened as early as the Delta Clipper days and gan 3 just relies on launch market expansion from gen 2.