Author Topic: What happens in the next 5 years in the launch market if F9R works?  (Read 73598 times)

Offline Bynaus

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I think the F9R will first create a secondary marked niche for re-used cores. They might be their own customers at first (the aptly named ElonSats), but over time, there will be new satellite business models built upon the availability of many cheap (discount) rides into space. I don't think the high premiums on the "first-ride" cores will go away very quickly: The old style "battlestar galactica" operators will still be ready to pay them for a while. But over time, this way of operating satellites will simply be pushed out of business. Then, people will start to realize that the reliability of a booster that has been re-used a couple of time is, statistically speaking, higher than the one of a new booster (because the flown booster has not shown any flaws in previous flights, while an unflown booster might still have issues - although this has of course to be balanced against wear and tear). In the long run, customers might even have to be given a discount to fly on a new booster...

But these are long-term developments that I do not expect to happen within the next five years (as stated in the OP). In the next 5 years, we will see SpaceX launch the ElonSats on used boosters, and perhaps, if that works reasonably well, a few more payloads at discounted prices, while the initial ("new booster" prices stay more or less the same (unless the prices of SpaceX' competitors come down substantially, which I cannot imagine given e.g. the development of the Ariane 6).
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Offline Alexsander

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Human-rated Dragon + Low price launches = Space Tourism.

Offline john smith 19

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If it can lift it in reusable mode, they pay reusable price. 
And that's the question. What is the "reusable price?"
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If it's massive enough that it can only be lifted by SpaceX in expendable mode, then they pay expendable price.  They care not a whit whether SpaceX gets the stage back or not, once it has put their product into the desired orbit.  If SpaceX can't lift it at all, or can't meet their price requirements, then they can go to Ariane or someone else.
I'd suggest you're mistaken. Perhaps an analogy would help.

If LV's are aircraft then launches (which is what a customer can buy from SpaceX or other ELV companies) are tickets. 1 time use with an X% chance of failure.

Anyone suggesting that a customer would pay a price including the full cost of an F9 1st stage is basically saying that when an airline buys a new aircraft it charges the whole cost (about $150m for a 787-3) to the first paying passengers (about 335 max)

A seat price of about $447 000 for the first flight.

That is exactly what some people here are suggesting will happen.

Does it still sound sensible to you?
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If expendable price and reusable price are the same, then their decision point rests on whether someone else can launch it more reliably or cheaply.
Which is possible but will give zero price elasticity. :(

I think this talk of a decision of expendable F9 vs. reusable F9 based on payload should rather be reusable F9 vs. reusable F Heavy.  Loads that are at the high end of F9's capabilities and that would require that the first stage be crashed would in my opinion be moved up to FH.
A reasonable idea. Do you have a current schedule for the first FH launch? I believe it's meant to be this year.
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What about this thought (just really off the top of my head, no real thought) - Re-usability may bring the price down enough that it may make sense to launch substantially lower mass payloads on F9 or FH than would otherwise be launched but then use the excess capacity to do dogleg trajectories allowing for launches not normally achievable from a given launch site.
Interesting tradeoff. Trouble is the reusability means you're already taking a payload hit.
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I agree with this concept of "SpaceX time", actually its Elon time as it applies to Tesla as well but in this case I think things are coming together much faster than expectable.  Remember the 10% chance of landing on  the water?  and in the first three tries it was 2-1/2 successes?  And the recent barge landing was pretty good for so many new changes introduced in one flight, further encouraging me to think this is going rapidly.  And the more we hear about Falcon the more is understood about how re-usability isn't being added so much as functionality built in from the beginning now getting to the point of use. 
History says otherwise. Early expectations were full reusability using parachutes/air bags (like Kistler). That evolved to full retro thrust recovery. Now we're at first stage only retro thrust.

You should be on firmer ground when you say that the design was partly driven by recovery and refurbishment needs. IE making sure all parts are salt water compatible, checking for easy(ish) access and ensuring what you can't remove easily you can inspect easily.

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I think re-flight will happen in 2015 though maybe not to orbit.  Maybe a hop in New Mexico or Texas after a full launch.
That's not a re flight. It's a hop. It would prove nothing. :(
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I really don't think they'll find much that needs attention or study, and I have some feeling that they'll fast track that landed stage into a quick launch (not lab analysis as most predict) to make a show of it.
I hoped their 1st barge landing would be intact and they'd understood all the problems.

I was disappointed.  :(

You might like to keep in mind the 3rd Dragon flight was over a year after the 2nd,
Granted they don't have NASA looking over their shoulders on this but I think there will be quite a delay after  the first one lands successfully before a reflight. It might be they go to destructive testing during some examinations and it never reflies (but paves the way for all future F9 1st stages to do so without any hitches).

No they won't. Why would they even think they could? The customer has 0 leverage here. If they ask for a discount and SpaceX doesn't give it to them what are they going to do? Find a cheaper launch provider? Good luck!
Actually all customers have options.

No satellite builder likes to be committed to a single vehicle. They know launch failures can ground a vehicle pending investigation. So yes they can go elsewhere.

Any customer could argue that the this is not a F9 V1.1 but a radically different stage, so they are at the start of the 3/7 rule. In fact they have not had a fully successful 1, let alone 3 yet.  :(

They can also argue that some of that recovery hardware could fail and turn a successful (expendable) flight into RUD.  You wouldn't want those fins to deploy during ascent, would you?

If it's a commercial payload they they 3 tonnes smaller than the expendable version if they find the $/lb is exactly the same they might as well buy the expendable version anyway. After all if they want to save on the launch price they can launch on a Pegasus XL. smaller payload --> smaller price (but actually much higher $/lb).

Your assumption that SpaceX holds all the cards is very misguided. It's a common negotiating tactic to convince your opponent they are powerless and you're doing them a favor.

Most satellite companies know better.

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Offline Mader Levap

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I agree with this concept of "SpaceX time",
You seem do not understand that phrase "SpaceX time" is quite negative. As in "they are always late". These days it is not that bad (they learn!), but in past their slips were really something.

My bet is 2017 at earliest.
I think re-flight will happen in 2015 though maybe not to orbit.
My bet is about actual flight to orbit. I don't care about firing stage again on test stand or suborbital hops in New Mexico or whatever. Only orbital flight counts.
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Offline newpylong

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Re-fly in 2016, won't begin selling prev flown flights until 2017. That's optimistic too.

Offline Bynaus

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A seat price of about $447 000 for the first flight.

That is exactly what some people here are suggesting will happen.

Does it still sound sensible to you?

Well, if they are used at paying $1 000 000 per flight (with the competition) and always used to fly in brand-new airplanes for the last 50 years - then why not? Even at that price it is the lowest you can get on the market.

Of course, as I said, in such a situation, new business models using the ~$500 follow-up trips (in the "slightly used" airplane) will be spawned.

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Re-fly in 2016, won't begin selling prev flown flights until 2017. That's optimistic too.

Agree with that.
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Offline francesco nicoli

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If it can lift it in reusable mode, they pay reusable price. 
And that's the question. What is the "reusable price?"



well, reusable price for one flight is:

(second stage price)+(first stage price/nr of reuses)+(refurbishment).

ssuming that:

Second stage accounts for a 1/3 of the current 60M pricetag,
nr reuses is 10,
This leaves 24 millions + refurbishment, for a payload of 10T instead of 13 T to LEO, which implies a Kg cost of  at least 2500$/KG being rather optimistic....


but in fact there is no reason why the customer price should be this one AS LONG AS SpaceX is the only reusable operator.
There are only two options. Either the reused boosters are reliable or they are not. If they are not SpaceX will offer a substantial discount but insurers will capture the large part of the advantage. If it is totally reliable the price SpaceX will set will be just enough to beat the competition and get the avaiable share of the market, because the compettitors would not be able to further lower the price.

So either Mr. Musk behaves as a fool (and I don't think he is) or the price reduction effect brought about by Falcon 9SR will be very limited as long as it remains the only reusable operator.

« Last Edit: 01/20/2015 01:26 pm by francesco nicoli »

Offline francesco nicoli

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In fact, this can be best modelled as an Edgeworth-Bertand Price Oligopoly, where SpaceX is the "follower" who sets the price equal to the leader's price (minus a iota, meaning a very little discount) and the leader sets the price at his lowest possible price.
As long as SpaceX is the only reusable, it will work like this:

- ULA (or the other non reusable competitor) sets a price.
- SpaceX sets then its price equal to the ULA's price minus an arbitrarily low value.
- SpaceX meets all the share of the market it can service given its supply chain.
- the residual market goes to the competitor.
« Last Edit: 01/20/2015 02:13 pm by francesco nicoli »

Offline The Amazing Catstronaut

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In fact, this can be best modelled as an Edgeworth-Bertand Price Oligopoly, where SpaceX is the "follower" who sets the price equal to the leader's price (minus a iota, meaning a very little discount) and the leader sets the price at his lowest possible price.
As long as SpaceX is the only reusable, it will work like this:

- ULA (or the other non reusable competitor) sets a price.
- SpaceX sets then its price equal to the ULA's price minus an arbitrarily low value.
- SpaceX meets all the share of the market it can service given its supply chain.
- the residual market goes to the competitor.


This will certainly be the case for a while. Musk's bet seems to be that the supply chain will adapt as the residual market is slowly squeezed: airforce contracts and a majority commercial market share will cut the oxygen gently off to any but the most highly subsidised providers.

The remainder will be victims of economic darwinism, and then will be forced to re-use. By that time, SpaceX will be able to drop launch costs to the pre-stated figure with first or even second generation reusable LV's. Musk's promise to drop the launch market price to a figure where space is truly within reach would thus be fulfilled by the very same people who desired to keep prices high in the first place.
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Offline francesco nicoli

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The remainder will be victims of economic darwinism, and then will be forced to re-use.

or disappear altogether. If they will be forced to reuse (ie. 5 years dev programme at best) the price will seriously decrease. Otherwise SpaceX will become a monopolist except for non-commercial payloads and will have no incentive whatsoever to lower prices.
« Last Edit: 01/20/2015 03:38 pm by francesco nicoli »

Offline francesco nicoli

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besides, this also suggests that selling reusable vehicles, as Reaction Engines plans to do with Skylon, rather than selling flights on a reusable vector,  like SpaceX aims to, should have much wider effects on the equilibium price- the first creating downard competition, the second creating a monopoly.

Offline Ludus

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I just saw Elon's Seattle Q&A. Launching over 4000 several hundred kilo satellites as an in-house project (over 15 years) does do that.

You are seriously lowballing the launch need. :)

A configuration with 4000 sats and a lifespan of 5 years will require launching 800/year forever.

Edit: fixed quote
I just realized that before I looked at the thread again. This is really a continuous production business making and launching as you say, 800 sats a year forever. This connects to Elon's comments about the Aerospace biz not really understanding manufacturing (something spending half his time building cars would give a lot of insight in). That estimate of 5 year lifespan seems about right even if they can be built to last longer since this deals with the issue of keeping the network constantly upgraded.

Unlike other approaches he seems more flexible about exactly how big or expensive the sats are. it seems closer to guess 8 launched at a time than 80, so more like 100 launches per year than 10.

Offline Ludus

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At least according to the Wiki there were 92 launches to orbit in 2014 of which 88 were successful. That's the current market size. A project that ends up demanding about 100 launches per year indefinitely is pretty big.

Online edkyle99

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If F9R actually proves to be rapidly reusable what are the consequences 2015-2020?
If F9R works and is cost effective (still to be proven), it will put pressure mostly on Orbital Sciences Antares.  This is because F9R, giving up performance for re-usability, will not be able to fly most EELV or heavy commercial GTO missions.

 - Ed Kyle
« Last Edit: 01/20/2015 04:14 pm by edkyle99 »

Offline sublimemarsupial

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If F9R actually proves to be rapidly reusable what are the consequences 2015-2020?
If F9R works and is cost effective (still to be proven), it will put pressure mostly on Orbital Sciences Antares.  This is because F9R, giving up performance for re-usability, will not be able to fly most EELV or heavy commercial GTO missions.

 - Ed Kyle

... which is what FHR is for. If F9R works, then FHR will as well.

Offline baldusi

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I just saw Elon's Seattle Q&A. Launching over 4000 several hundred kilo satellites as an in-house project (over 15 years) does do that.

You are seriously lowballing the launch need. :)

A configuration with 4000 sats and a lifespan of 5 years will require launching 800/year forever.

Edit: fixed quote
I just realized that before I looked at the thread again. This is really a continuous production business making and launching as you say, 800 sats a year forever. This connects to Elon's comments about the Aerospace biz not really understanding manufacturing (something spending half his time building cars would give a lot of insight in). That estimate of 5 year lifespan seems about right even if they can be built to last longer since this deals with the issue of keeping the network constantly upgraded.

Unlike other approaches he seems more flexible about exactly how big or expensive the sats are. it seems closer to guess 8 launched at a time than 80, so more like 100 launches per year than 10.
An expendable Falcon 9 v1.1 can do 11,940kg to a 1,250km high, 70deg inclined orbit and 11,045kg to a Polar. All this according to NASA's NLS II site. Reusable should be around 8,600kg. Let's assume that the satellites are 500kg. So Falcon 9 can probably do 16 set/launch. Or about 50launches/year, in single core, reusable mode. Heavy could probably do it in 20 if its not volume limited. Which is a lot but not unheard of (Soyuz seems happy to do it). It would probably require three pads at Vandemberg, though.

Offline Ludus

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An expendable Falcon 9 v1.1 can do 11,940kg to a 1,250km high, 70deg inclined orbit and 11,045kg to a Polar. All this according to NASA's NLS II site. Reusable should be around 8,600kg. Let's assume that the satellites are 500kg. So Falcon 9 can probably do 16 set/launch. Or about 50launches/year, in single core, reusable mode. Heavy could probably do it in 20 if its not volume limited. Which is a lot but not unheard of (Soyuz seems happy to do it). It would probably require three pads at Vandemberg, though.

That seems reasonable. So about 1 F9R launch/recovery per week from Vandenburg with 16 Satellites onboard.

Offline meekGee

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If F9R actually proves to be rapidly reusable what are the consequences 2015-2020?
If F9R works and is cost effective (still to be proven), it will put pressure mostly on Orbital Sciences Antares.  This is because F9R, giving up performance for re-usability, will not be able to fly most EELV or heavy commercial GTO missions.

 - Ed Kyle

I think FHR will become the main workhorse.

Using the barge and fly-back, there's almost no penalty for reuse.  The side cores have a minimal boost-back, and the center core has just a braking burn.

Additionally, the cost of the expendable second stage is amortized over a much larger payload. (Or in other words, is a much smaller fraction of the cost of the flight.)

That barge is key.
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Offline Lar

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Yep...

IF they don't use BFR (or Mini BFR) for launching these.... , 50 F9 or 15ish FH launches a year may be reason to revisit the decision not to do the engineering for second stage reuse, though.
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Offline meekGee

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Yep...

IF they don't use BFR (or Mini BFR) for launching these.... , 50 F9 or 15ish FH launches a year may be reason to revisit the decision not to do the engineering for second stage reuse, though.

The cost of the (expendable) upper stage is about 3% that of the (expendable) FH rocket.  (both in #engines and structure)

Suppose (some may consider this a tad optimistic) that each 1st stage core can fly 20 times, and that the cycle cost (barge, inspection, etc) is 5% of a new stage.  So the amortized cost of a re-flown core is now 10% of what it was.  (5%+5%).

Still, even under these assumptions, the cost of the expendable second stage is only 1/3 of the cost of the launch.

And we don't know the penalties of second stage reuse.

So overall, pursuing 2nd stage reuse on a 3-core rocket only makes sense (a necessary condition) if the cost of re-flying cores goes below 10% of an expendable launch.   Which will happen, but not right away.

----

I was thinking about an integrated 2nd-stage-dispenser vehicle, but that didn't quite add up either...
« Last Edit: 01/20/2015 08:46 pm by meekGee »
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