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#100 by LouScheffer on 03 Feb, 2013 12:03
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Ariane would seem to be the most similar cost benchmark. They are in the same "expensive but reliable" niche, and successfully attract commercial customers. By what percentage would ULA need to bring Atlas costs down to be competitive with Ariane?QuoteWhat would a reasonable price be for an Atlas or Delta?
From a commercial perspective... The facile but only reasonable answer is "competitive with other commercial providers". -
#101 by Jim on 03 Feb, 2013 12:47
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standing in the way of other, more promising approaches (SpaceX, Blue Origin, ...).
How is that?
Ok, the connection to SpaceX and Blue is not watertight. But the main point is that the two companies that are possibly the best positioned to revolutionize access to space via innovation, LM and Boeing, don't appear to be moving in that direction. My impression is that the reason for this is short-sightedness; it would take a decade or more to get a (potentially huge) return-on-investment on developing a fully-reusable launcher. SpaceX and Blue stand out because they appear to be able to look beyond the next fiscal quarter.
How are they standing in the way of the other's?
Also, maybe there is no revolution to be had. -
#102 by Joel on 03 Feb, 2013 13:14
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How are they standing in the way of the other's?
I mean, there is a fight for scarce gvmt resources. But it's more a lost opportunity than anything else. -
#103 by Xplor on 03 Feb, 2013 13:55
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Ariane would seem to be the most similar cost benchmark. They are in the same "expensive but reliable" niche, and successfully attract commercial customers. By what percentage would ULA need to bring Atlas costs down to be competitive with Ariane?QuoteWhat would a reasonable price be for an Atlas or Delta?
From a commercial perspective... The facile but only reasonable answer is "competitive with other commercial providers".
This seems like a reasonable comparison.
Based on Ariane 2012 sales of $1.7B and launches of 7 Ariane 5 and 2 Soyuz rockets, one can surmise simply that the cost of an Ariane 5 is about $220m to $230m. Similarly, ULA’s sales were somewhere around $2B and they had 10 Atlas V and Delta IV launches, indicating around $200m/launch.
Within ULA’s price they must still be recouping the $5B combined Boeing and Lockheed investment (less the couple billion already written off as total loss). On the other hand, Europe paid about $12B for the development and upgrades of Ariane V, so no Ariane recoupment is required. If amortized over a generous 100 launches (66 have flown in last 17 years), this amounts to $120m not included in the Ariane Price.
By these metrics EELV’s are actually quite the bargain. -
#104 by Xplor on 03 Feb, 2013 14:14
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Ok, the connection to SpaceX and Blue is not watertight. But the main point is that the two companies that are possibly the best positioned to revolutionize access to space via innovation, LM and Boeing, don't appear to be moving in that direction. My impression is that the reason for this is short-sightedness; it would take a decade or more to get a (potentially huge) return-on-investment on developing a fully-reusable launcher.
You are making an assumption that a fully-reusable launcher is cost effective. Where is the proof? It is technically very challenging getting a useful payload to LEO on a reusable launcher, let alone GTO or GSO. Than to say one has to do this cost effectively adds even greater challenge. Now do this in a limited payload market with very diverse orbital destinations.
Can you describe the reusable architecture that supports the range of missions required by the US government currently enabled by EELV’s? This includes 10 to 42 klb to LEO, 10 to 20 klb to GTO, up to 14 klb to GSO, not to mention sun synch, MEO and Earth escape.SpaceX and Blue stand out because they appear to be able to look beyond the next fiscal quarter.
Elon and investment partners have invested less than $200m of private sector money in SpaceX. This has been coupled with over $800m in already received in government investment. This is good business. The jury is still out on SpaceX’s ability to provide cost effective, reliable launches.
Blue Origin has demonstrated limited VTVL, about 1% the energy required to get to orbit. For now it is an interesting hobby, I have no idea if it will lead to an orbital launch capability. -
#105 by edkyle99 on 03 Feb, 2013 14:33
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Based on Ariane 2012 sales of $1.7B and launches of 7 Ariane 5 and 2 Soyuz rockets, one can surmise simply that the cost of an Ariane 5 is about $220m to $230m.
You need to add the European government support money (nearly $200 million?) to that sales total, then divide.
Same with EELV. You need to add the roughly $1 billion annual launch support contract (or whatever it is called).
- Ed Kyle -
#106 by Ronsmytheiii on 03 Feb, 2013 15:12
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With the recent Russian issues with quality assurance (ie Proton, Sealaunch failures) I would like to see the effect it will have on the general LV market. If ULA is able to start the dual launch manifest, that could dramatically lower their prices and make them competitive in the market place.
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#107 by Joel on 03 Feb, 2013 15:23
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You are making an assumption that a fully-reusable launcher is cost effective.
No, I am not saying that. I am saying that decreasing the launch cost with say 2 orders of magnitude (which would bring down the price for a person to go to orbit from the ridiculously expensive $20M to the still very expensive $200K) would not be possible without fully-reusable launchers.It is technically very challenging getting a useful payload to LEO on a reusable launcher, let alone GTO or GSO.
Fully-reusable transport from LEO to GTO/GSO is much less of a challenge, since the thrust requirements are so much lower. Think SEP. The real challenge is to get to LEO. -
#108 by Xplor on 03 Feb, 2013 16:33
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Based on Ariane 2012 sales of $1.7B and launches of 7 Ariane 5 and 2 Soyuz rockets, one can surmise simply that the cost of an Ariane 5 is about $220m to $230m.
You need to add the European government support money (nearly $200 million?) to that sales total, then divide.
Same with EELV. You need to add the roughly $1 billion annual launch support contract (or whatever it is called).
- Ed Kyle
The $1B support contract is included in ULA's sales figure. -
#109 by Xplor on 03 Feb, 2013 16:45
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It is technically very challenging getting a useful payload to LEO on a reusable launcher, let alone GTO or GSO.
Fully-reusable transport from LEO to GTO/GSO is much less of a challenge, since the thrust requirements are so much lower. Think SEP. The real challenge is to get to LEO.
SEP and other options could be implemented now. A typical expendable rocket gets 4 times the payload to LEO as GSO. SEP is currently sometimes used to support GSO insertion and station keeping, but only when the satellite has large amounts of power available. With today's “high” launch prices you would think that there is ample motivation for someone (rocket manufactures, satellite builders, others) to develop your suggested SEP tug. It isn’t happening for a number of reasons including long transit times, radiation damage in the Van Allen Belt, development cost, etc. It is easy to say that getting to LEO is the real challenge, but it is only a fraction, energy wise or cost, of the way to GSO. -
#110 by Hyperion5 on 03 Feb, 2013 17:10
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With the recent Russian issues with quality assurance (ie Proton, Sealaunch failures) I would like to see the effect it will have on the general LV market. If ULA is able to start the dual launch manifest, that could dramatically lower their prices and make them competitive in the market place.
I know the Zenit uses Russian-built engines, but wouldn't it still count as Ukrainian? I don't know about dual manifests making ULA competitive against the others, considering that'd require the Delta IV Heavy for many GTO launches. Ariane is much more likely to benefit from Russian troubles than anyone else, since they already do dual manifests. There's also the problem that within the next three years the big GTO satellite market will suddenly see not one but three new competitors. We've got the Angara 5 derivatives (Angara A5 & Angara A5/KVRB), Spacex's Falcon Heavy, and the new Chang Zheng 5 family. All of those families have more capacity to LEO than the Delta IV Heavy, and all but the Falcon Heavy should outmatch the Delta IV Heavy to GTO.
What ULA needs now is an absolutely driven CEO who takes the company independent of Boeing & Lockheed, rationalizes down to one LV family, and makes the investments needed to compete full-on against Spacex, Ariane, the Chinese and the Russians. That sounds like a tall order for anyone. -
#111 by Jim on 03 Feb, 2013 18:00
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What ULA needs now is an absolutely driven CEO who takes the company independent of Boeing & Lockheed
And how is he to do that? -
#112 by edkyle99 on 03 Feb, 2013 18:54
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With the recent Russian issues with quality assurance (ie Proton, Sealaunch failures) I would like to see the effect it will have on the general LV market. If ULA is able to start the dual launch manifest, that could dramatically lower their prices and make them competitive in the market place.
Sealaunch Intelsat 27 does not appear to have been a "Russian" failure. The system currently under suspicion is part of the Ukrainian launch vehicle.
- Ed Kyle -
#113 by Hyperion5 on 03 Feb, 2013 19:00
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What ULA needs now is an absolutely driven CEO who takes the company independent of Boeing & Lockheed
And how is he to do that?
It could be a she for all we care, Jim.
The way I see this might happen is you get together a group of investors who offers to buy out enough of Boeing & Lockheed Martin's stakes to gain majority control of the firm. Once the firm is nominally under the new investors' control, you implement the turnaround plan. Given the contract with Boeing, I figure any such action would have to be taken around 2016.
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#114 by joek on 03 Feb, 2013 19:21
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Similarly, ULA’s sales were somewhere around $2B and they had 10 Atlas V and Delta IV launches, indicating around $200m/launch.
Do you have a source for that $2B? That seems very low based on what NASA and DOD suggest. There have been substantial EELV cost increases recently; to paraphrase the fine print, "beware of past pricing as an indicator of future pricing".
Based projections over the next 5-7 years... NASA's estimate is closer to $300M each (Atlas V), or FY2013 $219M through FY2020 $329M (not including launch infrastructure costs, see below). DOD's original block buy proposal puts the price at $375M/core ($15B, 8 cores/year, 5 years). Commercial would presumably insure their payloads through third parties, which may reduce those costs vs. what the U.S. government pays for "mission assurance" (how much, if any, is unclear).
NASA also estimates that if they have to pay their share of launch infrastructure costs, it could add an average $100M to each EELV (Atlas V) mission. Given current policy, commercial would have to pay a share of infrastructure costs, and is one of the reasons noted for EELVs not being competitive; a change to allow ULA to charge only the marginal cost to commercial is unlikely. Then there is the complaint that ULA can not adequately guarantee commercial launch dates or opportunities, as commercial has to take second seat to U.S. government demands. -
#115 by joek on 03 Feb, 2013 19:49
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The way I see this might happen is you get together a group of investors who offers to buy out enough of Boeing & Lockheed Martin's stakes to gain majority control of the firm. Once the firm is nominally under the new investors' control, you implement the turnaround plan. Given the contract with Boeing, I figure any such action would have to be taken around 2016.What ULA needs now is an absolutely driven CEO who takes the company independent of Boeing & Lockheed
And how is he to do that?
Won't happen before 1-May-2017 unless by some miracle the FTC's consent order is rescinded before then (regardless of the Boeing contract), which would require DOD's agreement, Boeing and LM being reasonably cooperative, and market conditions which allowed it--which would mean a competitive U.S. government launch market (specifically DOD/NSS payloads, or the reason for ULA's/EELV's existence).
With those out of the way (*cough*), you're now free to finance and implement that turnaround plan. -
#116 by CommercialSpaceFan on 03 Feb, 2013 23:32
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Given current policy, commercial would have to pay a share of infrastructure costs, and is one of the reasons noted for EELVs not being competitive; a change to allow ULA to charge only the marginal cost to commercial is unlikely.
This is a serious problem for American competitiveness in the commercial market. It is very hard for a US company to compete with foreign governments. Remember the 1990’s, sort of the hay day of commercial competition, where Atlas and Delta had a significant fraction of the global commercial satellite market. This also represented a period of serious losses for all players. This is unsustainable for a company, but no problem for a nation where this is part of national policy.
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#117 by Hyperion5 on 04 Feb, 2013 06:05
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The way I see this might happen is you get together a group of investors who offers to buy out enough of Boeing & Lockheed Martin's stakes to gain majority control of the firm. Once the firm is nominally under the new investors' control, you implement the turnaround plan. Given the contract with Boeing, I figure any such action would have to be taken around 2016.What ULA needs now is an absolutely driven CEO who takes the company independent of Boeing & Lockheed
And how is he to do that?
Won't happen before 1-May-2017 unless by some miracle the FTC's consent order is rescinded before then (regardless of the Boeing contract), which would require DOD's agreement, Boeing and LM being reasonably cooperative, and market conditions which allowed it--which would mean a competitive U.S. government launch market (specifically DOD/NSS payloads, or the reason for ULA's/EELV's existence).
With those out of the way (*cough*), you're now free to finance and implement that turnaround plan.
Well it's more likely to happen than you might think. Things you think can't happen or aren't predicted to happen by intelligence agencies happen quite regularly throughout history. Witness the US intel agencies missing the signals pointing towards the Iranian Revolution in 1979, their total lack of predicting the demise of the USSR in 1989, and being caught flat-footed again by the Arab Spring in 2011. You see the same unpredictability to some degree in aerospace, particularly because geopolitics is so inherently tied to the sector. In 1990, I rather doubt either Boeing or Lockheed Martin were predicting that in just 15 years the Russians, French, their own missteps and DoD contracting would wipe them out of the commercial launch market. Nor would they have been predicting that the two firms' rocket businesses would merge. They almost certainly were not expecting the Atlas rocket family to adopt a Russian engine as its main powerplant.
You think it'll take a sea change to see ULA significantly change their way of business. I'd say based on the changes their employees have seen since the Cold War alone that big changes in aerospace are more regular than one might think. Just look at the Soyuz launching out of Kourou for one example, or Russian moon rocket engines being used on a Ukrainian/American rocket called the Antares. -
#118 by LouScheffer on 04 Feb, 2013 11:30
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I agree. A broad outline might be:
Won't happen before 1-May-2017 unless by some miracle the FTC's consent order is rescinded before then (regardless of the Boeing contract), which would require DOD's agreement, Boeing and LM being reasonably cooperative, and market conditions which allowed it--which would mean a competitive U.S. government launch market (specifically DOD/NSS payloads, or the reason for ULA's/EELV's existence).
With those out of the way (*cough*), you're now free to finance and implement that turnaround plan.
Well it's more likely to happen than you might think.
First, suppose SpaceX succeeds in its government test flights. Now the government has an second American vendor, so the FTC is less concerned. DOD would like ULA to survive (to keep two launch options), but only needs them to make one rocket, so they remove the constraints about needing two vehicles from ULA, and maybe even help with the transition. Boeing and LM would rather lose less money, so they let ULA free. Now you only(!) need a big enough market. -
#119 by Lobo on 04 Feb, 2013 23:03
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Given current policy, commercial would have to pay a share of infrastructure costs, and is one of the reasons noted for EELVs not being competitive; a change to allow ULA to charge only the marginal cost to commercial is unlikely.
This is a serious problem for American competitiveness in the commercial market. It is very hard for a US company to compete with foreign governments. Remember the 1990’s, sort of the hay day of commercial competition, where Atlas and Delta had a significant fraction of the global commercial satellite market. This also represented a period of serious losses for all players. This is unsustainable for a company, but no problem for a nation where this is part of national policy.
Conversely, when there is a government run agency, over time they inherently become less efficient usually. Our government is an easy example of this, but I’d assume it’d be the case to some degree in foreign governments too. Which means even a rocket subsidized by a foreign government has costs that grow and grow until either the government has to subsidize with a ton of money, or they decide to do something else.
I think Ariane 5 is having some financial issues, and that’s part of the reason they are looking to move to the smaller Ariane 6 later. And Arianespace isn’t exactly a government agency, but a company a little like ULA that tries to guarantee governments space access, as well as compete commercially.
I’m not sure if Japan’s H-IIA or H-IIB will run into increasing costs like ArianeSpace and ULA have, as those are a government primary launcher too.
Anyway, the point being, is a quick and nimble and efficient private company which always has an eye on making a better product for a lower price, could carve itself out a very lucrative niche as these various LV’s have costs go up over time due to the costs of either being part of a government, or having to service a government as a primary customer, raise launch costs over time making commercial customers look for lower cost alternatives.
SpaceX seems to be making a run in that direction. They conform to government overhead when lucrative to do so, but always seemingly with keeping prices down to be attractive in the commercial market first and foremost. They’ve certainly got some government investment dollars from NASA to help get things going, but that was always with the goal of having a commercial viable launcher that could a also meet –some- government needs. At least enough to get some government seed money and some government contracts to further their goals in the commercial market. Yet they don’t seem to be doing too much that takes them away from their commercial goals chasing government dollars. Where it’s inline with their goals of cost and efficiency, they pursue it, where it’s not, they don’t seem to.
Sort of going after the 80% of the market, even though margins might not be as high in that area, rather than the 20% of the market (US government) even if there’s higher margins to be had. And that 20% market already has a boutique supplier for most of their needs. But there are some needs that ULA doesn’t do, and I think they target meeting that rather than trying to directly compete with ULA on standard launch services.
Those needs being a cargo spacecraft that can go to the ISS, and a crew spacecraft for the same. Additionally, an over 23mt heavy lift vehicle built from their standard commercial LV’s.
And I suppose, what most who are questioning or critical of ULA’s business model are mainly not understanding is why doesn’t ULA really try to get more than just that limited bread-and-butter government work? Why don’t they make moves to try to start getting commercial market share? Either streamline to one LV, or perhaps have one LV as the uber-expensive and reliable government LV (Delta IV for example) and then streamline the other LV to be a viable competitor in the commercial market. The more commercial launches Atlas would get, the higher the production rate, and the lower the cost. Just standard economics of scale.
So some of us look at ULA and wonder why they don’t seem to really do anything in that direction. Or at least not much that’s apparent.
But, maybe the answer is simply, unless the government changes what they need for their normal launch services, and what they are willing to pay for that, ULA doesn’t have to change it’s business model at all. If they are willing to pay huge sums of money in ensure redundant access to space for their national security payloads, and they need that access to space to comply with their massively regulated and beuracratic needs, and ULA can….then maybe that’s a pretty good and safe business model.
ULA offers the government something no one else can right now. A domestic launch service with two very reliable redundant vehicles in the range they need, and full national security secrecy when needed, that can launch for either coast, and integrate all the payloads vertically.
It was like after the Iraq war when Halliburton got a lot of government contracts which caused a lot of heartburn by the political Left because of the VP’s former seat at their board of directors. But in truth Halliburton could just do what the government needed done and very few other companies could. Favoritism really had nothing to do with it. Bill Clinton gave a ton of contract sot Halliburton too prior to the Bush Administration, and they get government contracts now under the Obama Administration (although, suddenly we don’t hear a peep from those who had issues with it when Cheney was VP…funny that…)
Halliburton is one of the few companies that can conform to government bueracracy and secrecy, and red tape, and has the capabilities to do what is needed done quickly.
ULA is perhaps like that too, and perhaps we all keep thinking that they should be doing all they can to compete commercially, when they don’t really care too…unless the government is telling them they need to. They got their niche and share of the market that they are interested in, and aren’t all that interested in the rest.
Why aren’t they streamlining down to just Atlas V, or Delta IV, or Atlas Phase 2, etc? Because the government hasn’t told them they need them to…so they don’t. When the government changes what they want, then ULA will change what they do and/or how they do it. And probably not before regardless of how the rest of us armchair space fans think they should.
;-)
But that position leave a chunk of launch services market underserved, and it would seem that Musk is making a play for that market. ArineSpace, Sealaunch, Russia, etc. have all sort of tried, but had probably for various reasons to create a relatively low cost option for companies with decent sized payloads.
And later, it will be interesting to see how much Musk decides to try to nibble into ULA’s bread and butter, if at all. It might just require too many changes to their basic services to get too much into the US government launch businesss, and it might be deemed not worth the trouble. (although the pad at VAFB would indicate Musk does want to nibble in there, as I think the number of commercial payloads that have orbits that are best served from VAFB are limited compared to government payloads that do…but I could be wrong about that)
So that will be interesting to see how that might play out in the latter half of this decade…
The way I see this might happen is you get together a group of investors who offers to buy out enough of Boeing & Lockheed Martin's stakes to gain majority control of the firm. Once the firm is nominally under the new investors' control, you implement the turnaround plan. Given the contract with Boeing, I figure any such action would have to be taken around 2016.