AvWeek reporting 9(!) new SpaceX contracts, 2-3 Heavies

[Stellvia]

SpaceX closed 9 deals, w/possible 2-3 heavies. Four more in the next few weeks, incl one non-GEO, then maybe 4 more before end of the year.

-- https://twitter.com/AvWeekParis/status/509358113716449280

Not sure where to put this, so I thought I'd start a new thread

[meekGee]

Do contracts close with such immediate terms?  Or are these contracts that were simply previously confidential and only announced today?

[moralec]

8 new flights for this year? 

[ugordan]

8 new flights for this year? 

Deals, not flights...

[Stellvia]

8 new flights for this year? 

I read that as 8 more *contracts*

So, 17 new contracts. Makes Arianespace's announcement of five look a bit sad, doesn't it

Do they need the additional capacity of Brownsville? Yes, yes they do...

[moralec]

Sorry for jumping to that dumb conclusion. Anyway, the  obvious question to ask is:  how many new flights do you think they may need to add to their 2014 manifest to satisfy these new contracts?

[wannamoonbase]

8 new flights for this year? 

I read that as 8 more *contracts*

So, 17 new contracts. Makes Arianespace's announcement of five look a bit sad, doesn't it

Do they need the additional capacity of Brownsville? Yes, yes they do...

Don't get to far ahead of things. 
Firstly, what is the time frame of the 17 contracts?
Second, they'll have 4 pads between KSC, CCAFS, VAFB and Brownsville.  Lots of capacity there.
Third, Brownsville is allowed 12 launches per year currently, but if they prove to be a good neighbor and need additional capacity then increasing the limit of 12.

[meekGee]

That's what I expected, but then it read differently...  Phrasing!

[Lars_J]

Sorry for jumping to that dumb conclusion. Anyway, the  obvious question to ask is:  how many new flights do you think they may need to add to their 2014 manifest to satisfy these new contracts?

If the contracts were just signed, there is no chance that the satellites would be even close to be built, tested, and ready for launch. These launches won't be happening until 2016 at the earliest, I would think.

[moralec]

Sorry for jumping to that dumb conclusion. Anyway, the  obvious question to ask is:  how many new flights do you think they may need to add to their 2014 manifest to satisfy these new contracts?

If the contracts were just signed, there is no chance that the satellites would be even close to be built, tested, and ready for launch. These launches won't be happening until 2016 at the earliest, I would think.

Makes sense. Thank you!!

[AncientU]

SpaceX closed 9 deals, w/possible 2-3 heavies. Four more in the next few weeks, incl one non-GEO, then maybe 4 more before end of the year.

-- https://twitter.com/AvWeekParis/status/509358113716449280

Not sure where to put this, so I thought I'd start a new thread

Timing makes sense in light of seven successful v1.1 flights in last 12 months.  Questions about launch rates and reliability are being put to rest.  Suspect that insurance rates are falling, too.

[Space Ghost 1962]

Its interesting to compare ALL launch services providers NEW contracts right now.

It tells you a bit about how the market is changing.

Those for SpaceX are about speed/cost to space. Those about ULA are about assurance/performance in some form. Those about Ariane are about full service.

Nothing yet about reusability. Nothing yet about unreliability (Proton/Soyuz US). Nothing about institutional payloads under cost pressure. Possibly cadence soon.

Those are on the the list of what's to appear as market forces. "May you live in interesting times"

[TrevorMonty]

With 7 successful 9v1.1 flights and recent proof that they can deliver a 21day turn around between launches, expect a lot more of these contracts.

[Robotbeat]

And here I thought SpaceX was starting to nibble down their manifest.

Maybe SpaceX will always have a growing backlog, with new customers signing up faster than their ever-increasing launch rate... At some point, that'd require substantial market elasticity. Well, I hope so, anyway.

Also, there may be a noticeable uptick in diabetes rates due to all the Kool-Aid consumption...

[Chris Bergin]

Not sure where to put this, so I thought I'd start a new thread

Yep, right idea. We'll set up specific threads when we know which ones. This is all coming from Ms. Shotwell's speech in Paris it seems.

[Marslauncher]

Have been searching the intergoogles for a possible video... nothing yet... still searching.

[FutureSpaceTourist]

Do we have a thread for Arianespace orders? Their comment the other day about retaining 60% of the market (2014 orders?) seems a little premature!

Edit: typo 

[Space Ghost 1962]

And here I thought SpaceX was starting to nibble down their manifest.

Hardly. It's starting to get interesting. After many boring years.

Maybe SpaceX will always have a growing backlog, with new customers signing up faster than their ever-increasing launch rate... At some point, that'd require substantial market elasticity. Well, I hope so, anyway.

It's market turbulence. Expect things to shift between, not more. Might be a few more, but that's not really an increase just getting ahead to ride a hypothetical wave ...

Also, there may be a noticeable uptick in diabetes rates due to all the Kool-Aid consumption...

Or worse. Lloyd Bridges (que mas macho!) in "Airplane!".

Right now watch the steady progression of providers. My pick of winners will be based next on cadence maintained - watch this. We'll see.

[edkyle99]

Do we have a thread for Arianespace orders? They're comment the other day about retaining 60% of the market (2014 orders?) seems a little premature!

They announced five six new orders at the Paris conference after cutting prices, according to SFN, so Arianespace retains a healthy market share.  ILS and Sea Launch seem to be in decline at present by comparison.

 - Ed Kyle

[JasonAW3]

Sorry for jumping to that dumb conclusion. Anyway, the  obvious question to ask is:  how many new flights do you think they may need to add to their 2014 manifest to satisfy these new contracts?

If the contracts were just signed, there is no chance that the satellites would be even close to be built, tested, and ready for launch. These launches won't be happening until 2016 at the earliest, I would think.

There's also the possibility that the sats are already built, with the intent of launching with a certain competitor, who now looks like they might have an issue with getting things up.  Into space, that is...

[sdsds]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

[docmordrid]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

It does look good on paper, until you look at Zenit 3SL's failure rate: 36 launches, 3 full fails and one partial fail, resulting in a shortened satellite lifetime. Then there is the added overhead and logistics.

[Jarnis]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

These things do bad things to your sales prospects;



Low price goes only so far once you dunk a few expensive satellites on launch failures.

[meekGee]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

It does look good on paper, until you look at Zenit 3SL's failure rate: 36 launches, 3 full fails and one partial fail, resulting in a shortened satellite lifetime. Then there is the added overhead and logistics.

Just to keep perspective - SpaceX's sample size is still too small to determine their failure rate...  Though it does look good, especially as thing stabilize.

[ThereIWas3]

I don't think 'reusability' by itself will ever be a 'market pressure'.  It can reduce cost, which is a market pressure, and it may speed up delivery of service (do not have to wait for a vehicle to be manufactured for your mission, as we have some out back), which is a market pressure.

[a_langwich]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

It does look good on paper, until you look at Zenit 3SL's failure rate: 36 launches, 3 full fails and one partial fail, resulting in a shortened satellite lifetime. Then there is the added overhead and logistics.

Just to keep perspective - SpaceX's sample size is still too small to determine their failure rate...  Though it does look good, especially as thing stabilize.

I agree, in the longer view.  But, to put perspective on your perspective  ,  I think the market here discounts the longer view in the same way it does for stock price. 

Proton has a great long-term success/failure rate, but two recent failures are very troubling.  Fregat has a great record, but a recent failure and denial of responsibility and inability to even figure out there was a failure for a while, and the market will be spooked for a short while.  [The second failure, that of failing to look like you know what you are doing and are competently doing it, likely scares the market much more than the first.  Same for the Proton.]  Sea Launch has had three failures, and then compounded on that there's the question whether it is fully supported by the Russian company selling it (weren't they talking about ditching the US starting location?  moving to Russia?  haven't Russian officials in the parent company been punished for the investments they've made in Sea Launch?), and whether the Russians and Ukrainians are working well together and fully committed to helping each other succeed.

SpaceX, on that same short term timeline, has succeeded.  And they are still flippin cheap.  Cheap enough to make you take a crazy chance, and it's not a crazy chance anymore.

Proton and Soyuz/Fregat will come back, and I'm sure the market will forget their failures, just like it forgot Apple's dreadful 1990s failures, and like the lenders forget Donald Trump's bankruptcies.  SpaceX will fail, too, eventually, and have to come back from it.

I _hope_ Zenit and the Ukrainian space industry emerge from all this turmoil intact, both for the Ukrainian people and for the global space industry.  Doesn't look good for Sea Launch, though, right now.

[baldusi]

Zenit has an awful 86% success rate. Proton has consistently been doing a 91%. Apparently the threshold for this market is at least 90% reliability to play. But Proton is also heavily scheduled for Russian payloads (both military and civil, but government owned anyways).
The interesting part is that F9 is on a different category than either Zenit and Proton (GTO wise).
So, it might just happen, that while Ariane had to offer serious discounts on the light satellites, they can hike the price for the primaries. Those 6 tonne birds are really expensive and thus the Ariane 5 track record is almost a necessity. Only the existence of Falcon Heavy and Atlas V puts an upper bound.

[Kabloona]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

It does look good on paper, until you look at Zenit 3SL's failure rate: 36 launches, 3 full fails and one partial fail, resulting in a shortened satellite lifetime. Then there is the added overhead and logistics.

Just to keep perspective - SpaceX's sample size is still too small to determine their failure rate...  Though it does look good, especially as thing stabilize.

But not too small to make F9 look pretty darn good. 100% successful >primary< payload delivery on the first twelve launches is impressive given that you would expect the highest failure rate early in the life cycle with teething problems. Neither Pegasus nor Taurus achieved that record, and they were less complex designs. No wonder customers are lining up.

[Robotbeat]

I just don't understand why Sea Launch doesn't seem able to compete on price/value. On paper doesn't a Zenit 3SL powered by an RD-171 and launched from the equator look simply awesome? Isn't it 6 tons to a standard GTO, and capable of near GEO insertion for smaller payloads?

It does look good on paper, until you look at Zenit 3SL's failure rate: 36 launches, 3 full fails and one partial fail, resulting in a shortened satellite lifetime. Then there is the added overhead and logistics.

Just to keep perspective - SpaceX's sample size is still too small to determine their failure rate...  Though it does look good, especially as thing stabilize.

But not too small to make F9 look pretty darn good. 100% successful >primary< payload delivery on the first twelve launches is impressive given that you would expect the highest failure rate early in the life cycle with teething problems. Neither Pegasus nor Taurus achieved that record, and they were less complex designs. No wonder customers are lining up.

Neither did Ariane 5, either! Several early failures.

FWIW, a good way of guesstimating the reliability in the case of no main payload failures (because nothing is 100% reliable) is to assume half a failure... So 12 flights is 12/12.5... About 96% reliability, conservatively speaking. Just a guesstimate, though. Could also take a Bayesian approach which would give much the same answer.

[gregpet]

Possible connection between Elon's stand down order and these 9 contracts being signed?  Maybe there was a lot more riding on the Asiasat 6 launch than we know...In other words, he knew how close they were to signing a bunch of contracts and wanted to be "super" careful....

[Comga]

Please all: Back On Topic. (Which is NOT SeaLaunch, or Arianespace)
Which is up to 17 new contracts
That would be floodgates opening. 
There hasn't been much on my listing past 2016.
The last of these probably won't launch for four to six years, assuming they are built by then.

[FutureSpaceTourist]

Peter B. de Selding (@pbdes):

Sky Perfect JSat selects SpaceX to launch JCSat-16 after choosing Arianespace for JCSat-15. Risk management. #WSBW2014

https://twitter.com/pbdes/status/509640670852972544

I assume this is one of the 9?

[mvpel]

That tweet, with SpaceX beating up Ariane and taking her lunch money, certainly puts the last couple of years' worth Ariane vs. Falcon discussion into the proper context. Musk's words from late November 2012:

http://www.bbc.com/news/science-environment-20389148

Ariane 5 has no chance. ... I don't say that with a sense of bravado but there's really no way for that vehicle to compete with Falcon 9 and Falcon Heavy. If I were in the position of Ariane, I would really push for an Ariane 6. I think that's the right move.. ... Not only can we sustain the prices, but the next version of Falcon 9 is actually able to go to a lower price. So if Ariane can't compete with the current Falcon 9, it sure as hell can't compete with the next one.

And just under two years later, here's the proof. Well done, SpaceX!

[abaddon]

SFN is reporting that Ariane has six new launch contracts, all in the F9 sweet spot of <3.5 tons to GTO.  So I wouldn't call this SpaceX beating up Ariane just yet.

That said, it's been stated that the new launch contracts were at a sharply discounted rate compared to prior contracts, which is directly attributable to the F9's pricing.  I wonder if we are going to see an increase in the Arianspace subsidy over the next few years?  I remember someone from SpaceX (Gwynne?) responding to Ariane saying they would remain price competitive that they were fine with that idea, as long as it didn't just come from bigger subsidies.

Also, more on topic, other than this tweet we don't have a lot of info, as compared with the Ariane new contracts.  Hopefully we get some more detailed info soon.

[Space Junkie]

Is it known whether SpaceX is still giving early adopter discounts?

I assume the FH customers are getting deals since it hasn't flown yet. They are charging full price for the F9 now though, right?

[king1999]

Is it known whether SpaceX is still giving early adopter discounts?

I assume the FH customers are getting deals since it hasn't flown yet. They are charging full price for the F9 now though, right?

I doubt they would give out any discount now. The FH has already signed up first two or three launches before this.

[Coastal Ron]

SFN is reporting that Ariane has six new launch contracts, all in the F9 sweet spot of <3.5 tons to GTO.  So I wouldn't call this SpaceX beating up Ariane just yet.

That said, it's been stated that the new launch contracts were at a sharply discounted rate compared to prior contracts, which is directly attributable to the F9's pricing.

So yes, SpaceX is beating up on ESA - they are forcing them to sell their services at an even greater loss.

I wonder if we are going to see an increase in the Arianspace subsidy over the next few years?

I can't see how they couldn't, since they were already selling their services at a loss, and now it's even bigger.

Also, more on topic, other than this tweet we don't have a lot of info, as compared with the Ariane new contracts.  Hopefully we get some more detailed info soon.

Here is a SpaceNews article that talks about the challenges ESA faces:
http://www.spacenews.com/article/launch-report/41821the-world’s-biggest-satellite-fleet-operators-want-europe-to-build-ariane

Key quote:

"In a briefing, de Rosen said Eutelsat had agreed to let Arianespace launch Eutelsat’s 172B satellite — the first all-electric satellite ordered by Eutelsat — even though a SpaceX launch would have been less expensive."

So SpaceX is winning on price.  However no one wants to get locked into a monopoly if they don't have to, so this order was understandable.  But ESA can't sustain that, which is what their customers are telling them.

[Lars_J]

SFN is reporting that Ariane has six new launch contracts, all in the F9 sweet spot of <3.5 tons to GTO.  So I wouldn't call this SpaceX beating up Ariane just yet.

That said, it's been stated that the new launch contracts were at a sharply discounted rate compared to prior contracts, which is directly attributable to the F9's pricing.

So yes, SpaceX is beating up on ESA - they are forcing them to sell their services at an even greater loss.

And these smaller sat launches are the ones they are selling cheaper - the ones that will be mounted under a larger sat. And unless they can sell those larger sat slots, scheduling the launches will be difficult.

[Danderman]

It appears that the launch market is very sensitive to price, assuming a reasonably reliable launch system.

This goes against the collective wisdom of many greybeards who told us that the GEO comsat market was not particularly price sensitive.

On the other hands, the adherents of CATS - the philosophy that the great barrier to space development is price - have argued for years that there needed to be a market based on price and reliability. We seem to be nearing the emergence of that market.

The logical development would be new entrants into the market that are competitive with SpaceX.

BTW, all of this market competition stuff started with the enactment of the Launch Services Purchase Act of 1990.

[abaddon]

Also, more on topic, other than this tweet we don't have a lot of info, as compared with the Ariane new contracts.  Hopefully we get some more detailed info soon.

Here is a SpaceNews article that talks about the challenges ESA faces:
http://www.spacenews.com/article/launch-report/41821the-world’s-biggest-satellite-fleet-operators-want-europe-to-build-ariane

Thanks for the link!  Good reading.  I was actually asking/hoping for a more in-depth article on the SpaceX signings, since all we have right now are some tweets with very little info.  So far it doesn't seem like enough information has been released by SpaceX for any embellishment.

Also worth noting from the article you linked:

Given the advent of electric propulsion and the dramatic launch-cost reduction offered by Space Exploration Technologies Corp., the operators say, the new Ariane 6 needs to be in service by 2019 or face the risk that Europe’s Arianespace launch consortium will be permanently sidelined.

The letter was signed by six members of the European Satellite Operators Association. Signatories included the chief executives of Intelsat, SES, Eutelsat, Inmarsat, Hispasat and HellasSat.

Ouch!  Based on another recent article http://www.spacenews.com/article/launch-report/41770esa-ministerial-in-doubt-as-france-germany-remain-far-apart-on-future it seems impossible that any Ariane 6 could be ready by 2019 in the most optimistic of timelines.  And as the article also states, the six commercial satellite titans noted above don't want Ariane 5 ME, which could be developed in that time-frame.

Seems like Ariane is between a rock and a hard place.  And if SpaceX can pull off the Falcon Heavy in the next year or two things are really going to get dicey.

[obi-wan]

But not too small to make F9 look pretty darn good. 100% successful >primary< payload delivery on the first twelve launches is impressive given that you would expect the highest failure rate early in the life cycle with teething problems. Neither Pegasus nor Taurus achieved that record, and they were less complex designs. No wonder customers are lining up.

Neither did Ariane 5, either! Several early failures.

FWIW, a good way of guesstimating the reliability in the case of no main payload failures (because nothing is 100% reliable) is to assume half a failure... So 12 flights is 12/12.5... About 96% reliability, conservatively speaking. Just a guesstimate, though. Could also take a Bayesian approach which would give much the same answer.

12 missions without a failure is an 87.4% reliability at 80% confidence. It's a 94.4% reliability at 50% confidence level.

[sghill]

SFN is reporting that Ariane has six new launch contracts, all in the F9 sweet spot of <3.5 tons to GTO.  So I wouldn't call this SpaceX beating up Ariane just yet.

That said, it's been stated that the new launch contracts were at a sharply discounted rate compared to prior contracts, which is directly attributable to the F9's pricing.

So yes, SpaceX is beating up on ESA - they are forcing them to sell their services at an even greater loss.

Hold on,  "loss" or discount?  The distinction is vital.  Can you provide a link to where they are selling launches at a loss versus selling them at a lower profit? 

Also, small changes in the Euro/US Dollar exchange rate translates into wide variances in margin since Arianespace prices its launches in US dollars.  A $0.10 variance in exchange rates translates into a 10 million Euro difference in launch pricing, so a downward trend against the dollar (which we've seen throughout 2014) gives them considerable wiggle room on pricing.  Also, they had actually raised prices, so they may be going back down to where they were. 

And separately, here's a link to Arianespace asking ESA for higher subsidies back in February in response to exchange rates and SpaceX competition:  http://aviationweek.com/space/arianespace-esa-we-need-help 

The article also discusses just how bad the financial situation is with the Soyuz launches by Arianespace from Guiana Space Center.

[abaddon]

Hold on,  "loss" or discount?  The distinction is vital.  Can you provide a link to where they are selling launches at a loss versus selling them at a lower profit? 

Arianespace is already subsidized to the tune of around 100 million euros a year as per the link you yourself cited.  If you imagine around 10 launches a year that's roughly -10 million euros per launch, which is the definition of "at a loss".  It remains to be seen how the reduced prices on these newly signed launch contracts are going to affect the bottom line, but given they were already asking for increased subsidies in February it seems likely the recent discounts are going to come directly out of European taxpayer's pockets.

Based on the article it sounds like they used to lose more money per launch in the previous decade than now.  I'm not sure when (or if) they were most recently profitable.

[ncb1397]

rianespace commercial launch consortium on April 12 reported a higher-than-expected 1.013 billion euros ($1.3 billion) in revenue for 2011, up 12.9 percent over 2010, with a profit of 1.6 million euros.

The Evry, France-based company’s final revenue figure, released following a meeting of its shareholders, was helped by 145 million euros in support payments in 2011 made by the 19-nation European Space Agency (ESA).

ESA governments agreed to provide Arianespace 217 million euros, covering 2011 and 2012, to permit the company to avoid the losses it posted in 2009 and 2010. Having allocated two-thirds of that sum to its 2011 accounts, Arianespace will have 72 million euros remaining for 2012.

http://www.spacenews.com/article/esa-subsidy-boosts-arianespace-black

From what I can tell, Arianespace is usually in the red before subsidies which can barely boost them into the black(barely and sometmes not at all). What is ironic though is that this is exactly what the Europeans accuse SpaceX of doing - dumping launches on the international market below cost. Maybe they are just peeved that someone else has apparently stolen their playbook?

[abaddon]

From what I can tell, Arianespace is usually in the red before subsidies which barely boosts them into the black. What is ironic though is that this is exactly what the Europeans acuse SpaceX of doing - dumping launches on the international market below cost.

Loudly proclaiming another countries competitor is doing something you are yourself doing in righteous indignation is SOP for the average government.  I'd be more surprised if they weren't.

If it ever becomes more than bluster then there is something to sit up and take notice about.

[meekGee]

"Loss" is difficult to define here.  Are said $100M getting divided among the launches, or are they supporting infrastructure and (ahem...) assured access to space?

The tell should be:  if AS were to suddenly get 5 more flights at this rate, would it cause them to require less or more subsidy?

[Herb Schaltegger]

To try to bring this thread back on-topic (that is, SpaceX's new business, not Arianepace subsidies), has any more information leaked out regarding the customers? To my mind, SpaceX will truly be in "the big leagues" when they book some of the heavier Ka-band DTH television satellites for western hemisphere customers like Directv or Dish Network. Those birds weigh upwards of 6 tonnes at launch and so, presumably, would be ideal payloads for Falcon Heavy. So far, Directv has had successful launches with all the existing market players (Arianespace, ILS and SeaLaunch). With ILS and SeaLaunch in such trouble, it would be nice to see a large, American customer like them book a payload with SpaceX.

[abaddon]

"Loss" is difficult to define here.  Are said $100M getting divided among the launches, or are they supporting infrastructure and (ahem...) assured access to space?

If they charged 10 million more per flight there would be no subsidy.  Why not call a spade a spade?  The 100 million euros per year allows them to lower their launch prices by ~10 million a year.  (That in and of itself is a simplification, since they operate three different launchers.  But the general point still stands).  The previous article also indicated they were asking for larger subsidies to be able to remain price competitive.  Are you going to argue that the costs of the supporting infrastructure have unexpectedly increased and that's why the increased subsidy is required?

But as Herb notes this is really continuing to go OT.

To try to bring this thread back on-topic (that is, SpaceX's new business, not Arianepace subsidies), has any more information leaked out regarding the customers?

We've heard of only one new contract (that is presumably part of the nine) that I am aware of.  Was hoping we'd know more by now...

[sghill]

Hold on,  "loss" or discount?  The distinction is vital.  Can you provide a link to where they are selling launches at a loss versus selling them at a lower profit? 

Arianespace is already subsidized to the tune of around 100 million euros a year as per the link you yourself cited.  If you imagine around 10 launches a year that's roughly -10 million euros per launch, which is the definition of "at a loss".  It remains to be seen how the reduced prices on these newly signed launch contracts are going to affect the bottom line, but given they were already asking for increased subsidies in February it seems likely the recent discounts are going to come directly out of European taxpayer's pockets.

Based on the article it sounds like they used to lose more money per launch in the previous decade than now.  I'm not sure when (or if) they were most recently profitable.

I agree with the sentiment of your response, but the EU may consider the non-monetary benefits of that 100 Euro investment (such as assured access to space) to be higher than the monetary figure of the incentive as part of a balanced scorecard.  So the subsidy should really be kept out of the determination of whether it's a loss or not, and only considered as part of the balanced scorecard as a whole.  In other words, when is a spade not a spade? I know that sounds funny, but it's basically how every not-for-profit on the planet has to look at things.

The more accurate question then is: "Including the level of subsidies given to Arianespace, are they losing money after each launch?"  If the answer is yes, then they need more incentive money from ESA to keep solvent.  If the answer is no, then they have pricing wiggle room while still meeting the intent of that incentive (subsidy) money that's given to them.  Hence my question in the first place.

Arianespace & Ariane 6 are already on an uphill battle no matter what year it hits the market.    If SpaceX establishes re-useability then Arianespace can turn out the lights.

Only if the EU politically allows it.  They may force their member states to use Arianespace for launches.

We are only at the very start of this market being disrupted.

[wannamoonbase]

Given the advent of electric propulsion and the dramatic launch-cost reduction offered by Space Exploration Technologies Corp., the operators say, the new Ariane 6 needs to be in service by 2019 or face the risk that Europe’s Arianespace launch consortium will be permanently sidelined.

The letter was signed by six members of the European Satellite Operators Association. Signatories included the chief executives of Intelsat, SES, Eutelsat, Inmarsat, Hispasat and HellasSat.

Ouch!  Based on another recent article http://www.spacenews.com/article/launch-report/41770esa-ministerial-in-doubt-as-france-germany-remain-far-apart-on-future it seems impossible that any Ariane 6 could be ready by 2019 in the most optimistic of timelines.  And as the article also states, the six commercial satellite titans noted above don't want Ariane 5 ME, which could be developed in that time-frame.

Seems like Ariane is between a rock and a hard place.  And if SpaceX can pull off the Falcon Heavy in the next year or two things are really going to get dicey.

The signed letter referenced above says it all.  With or without re-usability by 2019 SpaceX will almost certainly be in full stride with the F9 and FH and sucking up much of the launch market demand.

And importantly they'll have contracts lined up for several years too. 

Arianespace & Ariane 6 are already on an uphill battle no matter what year it hits the market.    If SpaceX establishes re-useability then Arianespace can turn out the lights.

We are only at the very start of this market being disrupted.

[ncb1397]

Arianespace & Ariane 6 are already on an uphill battle no matter what year it hits the market.    If SpaceX establishes re-useability then Arianespace can turn out the lights.

Let's hope not. I hope they put some small landing motors and legs on Ariane 5 and are able to recover boosters with the best of them. If anything, Hydrolox might make a better technology for reusability given that it burns more cleanly than kerolox. That carbon atom really is quite versatile which is a good thing for carbon based lifeforms(thank you carbon) but maybe not so much for creating a chemically simple and clean environment that might simplify maintainance.

[Mader Levap]

  They may force their member states to use Arianespace for launches.

You can subsidy horse buggies against those newfangled "car" thingies only for so long.

I hope they put some small landing motors and legs on Ariane 5 and are able to recover boosters with the best of them.

Haha, no. If anything, they should make Ariane 6 at least partially reusable. Otherwise their rocket will be already obsolete on arrival.

[Comga]

  They may force their member states to use Arianespace for launches.

You can subsidy horse buggies against those newfangled "car" thingies only for so long.

I hope they put some small landing motors and legs on Ariane 5 and are able to recover boosters with the best of them.

Haha, no. If anything, they should make Ariane 6 at least partially reusable. Otherwise their rocket will be already obsolete on arrival.

Can we follow Chris' instructions and take all this Arianespace stuff over to the Ariane 6 thread?
Positing landing engines and legs on an Ariane 5 is Off-Topic here is so very many directions. 
It is acknowleged that we may not get any information to post on these 9 new SpaceX contracts for a very long time, but that's fine.  A new post here should tell forum members that news has come in on this subject.  That's why we have threads and not just a completely open discussion.

[Space Ghost 1962]

... has any more information leaked out regarding the customers? To my mind, SpaceX will truly be in "the big leagues" when they book some of the heavier Ka-band DTH television satellites for western hemisphere customers like Directv or Dish Network. Those birds weigh upwards of 6 tonnes at launch and so, presumably, would be ideal payloads for Falcon Heavy. So far, Directv has had successful launches with all the existing market players (Arianespace, ILS and SeaLaunch).

This will be the first update to look for - which big bird flies on FH. Until then its all off topic noise and some nonsense. Which is it?

Past that, a long way off, likely will be Brownsville pad coming online as a well-tuned "factory" for commercial launch services.

Nothing more really fits. Think SpaceX contracts.

[Stellvia]

9Sept-SpaceX 2014 sales:9 signed, 2 just b4 Euroconsult. Included 2 FH, option 3rd. 4 more flts nearly closed at mtg./3-4 more poss by 31Dec

-- https://twitter.com/TheLurioReport/status/511293072370855936

[su27k]

9Sept-SpaceX 2014 sales:9 signed, 2 just b4 Euroconsult. Included 2 FH, option 3rd. 4 more flts nearly closed at mtg./3-4 more poss by 31Dec

-- https://twitter.com/TheLurioReport/status/511293072370855936

If 9 is just 2014 sales, I suspect we already know most of them: SES-9/10, Thaicom 8, BulgariaSat-1, Inmarsat has 1 firm order and 2 options, plus the rumored JCSat-16 and Koreasat 5A, that's 7 signed and 2 options, including 1 FH.

[LouScheffer]

SFN is reporting that Ariane has six new launch contracts, all in the F9 sweet spot of <3.5 tons to GTO.  So I wouldn't call this SpaceX beating up Ariane just yet.

That said, it's been stated that the new launch contracts were at a sharply discounted rate compared to prior contracts, which is directly attributable to the F9's pricing. 

Overall, this seems good for the market, and perhaps even for SpaceX.  If there are two reputable providers who will launch a 3.5t satellite for $50M, then more folks will build their business plans around this, order more satellites, and get them launched sooner.  But Ariane can only launch a subset of these additional orders since they need to pair each with a heavy satellite, whereas SpaceX can theoretically crank up production (worst case) or get re-use to work (best case). 

[RanulfC]

That tweet, with SpaceX beating up Ariane and taking her lunch launch money, certainly puts the last couple of years' worth Ariane vs. Falcon discussion into the proper context. Musk's words from late November 2012:

http://www.bbc.com/news/science-environment-20389148

Ariane 5 has no chance. ... I don't say that with a sense of bravado but there's really no way for that vehicle to compete with Falcon 9 and Falcon Heavy. If I were in the position of Ariane, I would really push for an Ariane 6. I think that's the right move.. ... Not only can we sustain the prices, but the next version of Falcon 9 is actually able to go to a lower price. So if Ariane can't compete with the current Falcon 9, it sure as hell can't compete with the next one.

And just under two years later, here's the proof. Well done, SpaceX!

Fixed that for you

Randy

[RanulfC]

  They may force their member states to use Arianespace for launches.

You can subsidy horse buggies against those newfangled "car" thingies only for so long.

The analogy is flawed and not applicable. More to the point would be "you can only subsidy your hand-built, very expensive cars against these "mass-produced" and cheaper cars for so long..."

Which points to the real-world that European automobile makers didn't all go out of business against Henry Ford and as much as HE complained about the "subsidies" and government deals he ended up using as much as he could get as well to stay competative.

Keep your "lessons" in perpective

Randy

[simonbp]

What, is Ariane now some sort of "luxury launcher"? Does it have leather-upholstered farings and shiny chrome SRBs?

Before F9 (v.1.1), the equation was either cheap, risky launches on Proton/Zenit or expensive, reliable launches on Ariane/Atlas. Now Falcon appears to be both cheap and reliable, which is why they are making money hand over fist. Unfortunately for competition, none of SpaceX's competitors are able to do both cheap and reliable (though Long March is catching up).

[macpacheco]

What, is Ariane now some sort of "luxury launcher"? Does it have leather-upholstered farings and shiny chrome SRBs?

Before F9 (v.1.1), the equation was either cheap, risky launches on Proton/Zenit or expensive, reliable launches on Ariane/Atlas. Now Falcon appears to be both cheap and reliable, which is why they are making money hand over fist. Unfortunately for competition, none of SpaceX's competitors are able to do both cheap and reliable (though Long March is catching up).

No Ariane like ULA is a pork barrel based business. As such it employs probably at least twice as many people throughout its supply chain than a similarly sized SpaceX type supply chain, plus one of ULA problems is its dependence on many subcontractors that have a de facto monopoly over what they supply ULA with, giving them unfair pricing power, I wouldn't be surprised if Ariane has the same problem. Lots of limitations due to labor union deals, most pork barrel programs (ULA/Ariane included) are JOBS programs. So eliminating a job for cost cutting = bad politics with those that give you money (US Congress / European counterparts).
But where you read Luxury, you should read ultra conservative, unwilling to take chances with anything out of the box thinking, due to internal resistance (specially internal/supplier intertia). The SpaceX model leads to a much lower cost of effect a change in its products vs ULA/Ariane.
It takes a culture that is constantly innovating to keep innovating. Once you get afraid of change, its really hard to break the bonds that slow down innovation.

[Jim]

No Ariane like ULA is a pork barrel based business. As such it employs probably at least twice as many people throughout its supply chain than a similarly sized SpaceX type supply chain, plus one of ULA problems is its dependence on many subcontractors that have a de facto monopoly over what they supply ULA with, giving them unfair pricing power, I wouldn't be surprised if Ariane has the same problem. Lots of limitations due to labor union deals, most pork barrel programs (ULA/Ariane included) are JOBS programs. So eliminating a job for cost cutting = bad politics with those that give you money (US Congress / European counterparts).
But where you read Luxury, you should read ultra conservative, unwilling to take chances with anything out of the box thinking, due to internal resistance (specially internal/supplier intertia). The SpaceX model leads to a much lower cost of effect a change in its products vs ULA/Ariane.
It takes a culture that is constantly innovating to keep innovating. Once you get afraid of change, its really hard to break the bonds that slow down innovation.

I believe this is incorrect and unsupported and you may be repeating yourself.

[ChrisWilson68]

But not too small to make F9 look pretty darn good. 100% successful >primary< payload delivery on the first twelve launches is impressive given that you would expect the highest failure rate early in the life cycle with teething problems. Neither Pegasus nor Taurus achieved that record, and they were less complex designs. No wonder customers are lining up.

Neither did Ariane 5, either! Several early failures.

FWIW, a good way of guesstimating the reliability in the case of no main payload failures (because nothing is 100% reliable) is to assume half a failure... So 12 flights is 12/12.5... About 96% reliability, conservatively speaking. Just a guesstimate, though. Could also take a Bayesian approach which would give much the same answer.

12 missions without a failure is an 87.4% reliability at 80% confidence. It's a 94.4% reliability at 50% confidence level.

Sigh.  Does nobody here understand statistics beyond a basic undergraduate course?

Any estimate of reliability has to have an assumption about prior probabilities.  You can't just say X events with Y outcome means Z probability with Q confidence.

People so often just grab a formula and plug in numbers without finding out the assumptions in that formula.  What prior probability distribution is assumed by the formula you plugged numbers into to get this answer?

I get really tired of seeing statistics misused because people don't understand that there are assumptions behind the formulas and it's necessary to examine those assumptions before coming to a conclusion.

In this case, we have industry-wide experience that we could use to give a more accurate prior probability distribution than some simplistic distribution that is probably built into the formula that these numbers come from.

Here's an example to illustrate the problem.  Suppose I toss a coin 10 times and it comes up heads 10 times.  What are the odds the coin is a two-headed coin?

The answer is it depends on the assumption about how many two-headed coins there are in the bag from which I selected the coins.  If the bag is half two-headed coins, it's very likely the tested coin is two-headed.  But if there are a million coins in the bag and only one is two-headed, it's very likely that the coin is fair and it was just a fluke that I happened to get 10 heads.

The number of two-headed coins in the bag gives us the prior probability that the selected coin is two-headed, before we've done any testing.  Each test we do (a flip of the coin) allows us to refine the probability, but it's all based on the prior probability.

If we know nothing about the bag and how many two-headed coins are in it, we might just assume half are two-headed and make a calculation based on that.  But if we've examined several other coins in the bag, we have some better data to go on in choosing a prior probability.

In the case of rockets its even more complicated because unlike a coin, there is the issue of a distribution of failure rates.  For example, it may be 10% likely you have a failure that shows up with 100% likelihood on each launch (a design flaw), 10% likely you have a failure that shows up with 50% likelihood, and 10% likely you have a failure that shows up with 2% likelihood.  That distribution of kinds of failures and how long they typically take to show up affects the confidence calculation for launches going forward on a new rocket.

Oversimplifying things by using a formula with simplified prior probability distribution assumptions just gives unjustified confidence in the results it offers.

[Chris Bergin]

Back on topic people.

[Nilof]

One of the key issues to think about is that of fixed vs marginal costs. Afaik, there is no organization that sells launches below marginal costs. Government subventions have more to do with making sure their launchers break even in the case where they don't launch as often as they would like.

Material and propellent costs to build rockets if vertically integrated are a very small part of the total costs. The cost of launching them overwhelmingly consists of wages. Since qualified labor generally is not something you can hire on an on/off basis, these wages are fixed costs. Launching twice as many rockets with the same infrastructure and labor force would only cost marginally more to the organization manufacturing and launching the rockets, even if the system is completely expendable.

The key issue is keeping track of the costs involved in maintaining a production line running, and gauging how big your labor force has to be. That and streamlining your subcontractor supply line.

[oldAtlas_Eguy]

No matter how many launches you do off a single pad there will be some of your workfoce idle due to inefficiencies in processing flows that use specalties at only some points in the flow.  Parralelling flows makes more usage but unless the flows number more than two there will still be some labor waste.  having 2 pads in a locatiion and two parrallel time offest flows such that they are like one week apart will almost certainly make maximum use of labor pool. This will be the case once LC39A is operational. 

So once this occurs and reusability is thrown in I wonder just how much of a price drop will occur.  It is possible that SpaceX's prices for these new contracts may be for less prices than the posted amounts because they are for NET 2016 and SpaceX will have 2 Cape pads with possibly Boca Chica and VAFB in operation.