Who will compete with SpaceX? The last two and next two years.

[guckyfan]

SpaceX current high flight rate is due to large backlog on their manifest. When they've caught up on thst manifest then we well see what regular flight rate will be.

They might have won more contracts and will win more contracts when it becomes clear they can fly them on schedule.

[AncientU]

SpaceX was not profitable in 2015 (as revealed by WSJ) and most probably ohb 2016. They might be this year but their last formosat launch was certainly at a loss. 

ArianeGroup - Arianespace's parent company - is very profitable (see Safran or Airbus annual reports).

ULA is even more profitable (look at LockMart and Boeing quarterly results).

Profitability of a company is a poor measure of their competitive advantage.  (Take Amazon as an example.)  Customer value for price paid is the metric that defines competition.

On Arianespace, Europe is underwriting their vehicle development ($5B or so for Ariane 6) and subsidizing their launches -- without this support, Arianespace would be deeply in the red and long out of business -- if they were a real 'private' company.

ULA is also profitable, but too expensive for any commercial competition; they are surviving on a sweet deal block buy and a $1B annual subsidy, while downsizing at a rapid pace.  The USG is their sole customer and it will remain so since the company has banked profit for ten years instead of reinvesting/innovating.

Since this thread is about competing, we should discount these two heavily subsidized (almost quasi-government) organizations.  Yet today, SpaceX is out flying them both, stealing launches from their historic customer bases, and may (will) continue to do so indefinitely.

Edit:
Here's a new article from the business perspective:

New Space Age Offers Promise and Peril for Investors

SpaceX, a side project of Tesla (ticker: TSLA) founder Elon Musk, has grabbed a leading market share in commercial satellite launches by undercutting its main rival, Europe’s Arianespace, by up to 40%.

http://www.barrons.com/articles/new-space-age-offers-promise-and-peril-for-investors-1503723070

[oldAtlas_Eguy]

SpaceX current high flight rate is due to large backlog on their manifest. When they've caught up on thst manifest then we well see what regular flight rate will be.

They might have won more contracts and will win more contracts when it becomes clear they can fly them on schedule.

As well as they have a list of 30+ launches for next year 2018. So this year will be close to and possibly 20 launches which will be followed by next year which is likely to be more. So how are you going to get a steady syate value without multiple years in a row with near equal launch counts. The way the things are going is that the annual increases in launches will continue as the constellation launches start in 2019/2020 supplanmting the delayed launches which will be almost all cleared by EOY 2018 but even then some will remain. Also a multi-launch DOD bid for contract for 2020 is soon forthcoming. I believe it is for a combined 4/5 launches. Add that to SpaceX commercial expected manifest and you could easily get 30 launches performed in 2020 before even considering any SpaceX constellation launches.

I do not expect the anual launch count to stay at a certain value or that it would reduce. It has all the indications of increasing year-over-year of about 5 launches: 2018 -25, 2019-30, 2020-35, 2021-40, 2022-45, 2023-50.

Their increase year-over-year may accelerate if launch costs lowered by more low cost launches due to both availability of launch (used boosters) and discaounts for the use of used boosters start to create some elascity in the sats being produced and the end uses (business cases) that are opened up that are yet been profitable because of higher launch and sat manufacturing costs.

Think of what Safran is currently doing for OneWeb. They are pioneering mass production techniques and cost saving in the satellite manufacturing. Once this becomes more widespread the total cost of providing a on-orbit capability when combined with cheaper launch closes many business cases that otherwise would not close at the higher sat and launch costs. An explosion in number of sats amd launches is but 5 years away. And the Launch providers in position to capitalize on this explosion of launch demand are SpaceX and BO since their LV's are not as constrained by production and supply chain restrictions. The demand will grow so much that it will probably fill the manifest and capabilities of all launch providers that can meet certain price thresholds that include expendables.

[Mike Jones]

SpaceX receives around 1bn$ per year from US government (mainly NASA) so no they are not different from Arianespace or any other international competitors. By the way spaceX is 15 years old and still launching from US government launch sites in Vandenberg and Cape Canaveral.
ULA is even more supported by  the US government, that's clear and made possible by the huge gap in yearly space budget in the US vs Rest Of World...

[envy887]

SpaceX was not profitable in 2015 (as revealed by WSJ) and most probably ohb 2016. They might be this year but their last formosat launch was certainly at a loss. 

ArianeGroup - Arianespace's parent company - is very profitable (see Safran or Airbus annual reports).

ULA is even more profitable (look at LockMart and Boeing quarterly results).

That is net profit, and doesn't reflect the difference in money spent on development. Launch operating profit (or revenue per launch minus recurring cost per launch) is the relevant metric, and that's not exactly clear, especially on the SpaceX side. They are spending a lot on money on development though...

[meekGee]

SpaceX receives around 1bn$ per year from US government (mainly NASA) so no they are not different from Arianespace or any other international competitors. By the way spaceX is 15 years old and still launching from US government launch sites in Vandenberg and Cape Canaveral.
ULA is even more supported by  the US government, that's clear and made possible by the huge gap in yearly space budget in the US vs Rest Of World...

It's not the amount. It's how it figures into your company's plan.  SpaceX used profits from NASA launches (not straight-out pay outs), alongside commercial revenue, to innovate even more and provided a huge amount of payback - rockets, engines, capsule, future vehicles....

ULA sat on "free money" and did basically nothing with it.  No significant R&D, no effort to get commercial revenue.  Even when their very existence was threatened, their response was to secure a block buy, and do the minimal necessary design work in order to plausibly claim they are not doing "nothing".

Arianne is at least not averse to commercial work, but bottom line, they too chose to avoid rocking the boat.

Both are very lucky that BO is as slow as it is.

[oldAtlas_Eguy]

What I was trying to point out in my previous post is that a very quickly rising demand over the next 5 years will cause ever launch provider to be busy. Their competitive positions will only be a deciding value in the profit total they make and the total number of launches they make in a year not whether or not they will be in business or not. To use the current payload constrained (customer constrained model) where competition is the end all in who gets what market share and those with insufficient market share will go out of business is the wrong model when evaluating what will be the status-que 5 years from now.

[AncientU]

What I was trying to point out in my previous post is that a very quickly rising demand over the next 5 years will cause ever launch provider to be busy. Their competitive positions will only be a deciding value in the profit total they make and the total number of launches they make in a year not whether or not they will be in business or not. To use the current payload constrained (customer constrained model) where competition is the end all in who gets what market share and those with insufficient market share will go out of business is the wrong model when evaluating what will be the status-que 5 years from now.

An expanding market doesn't necessarily raise all boats equally.  New orders will be coming from players who are entering the game because costs have dropped sufficiently to close their business cases.  They will be ordering from whomever can rapidly expand their launch volume (maintain backlog at a manageable level) and continue dropping their costs.

Say the market doubles to around 200 launches five years from now...  how will market share be divided in 2022?

[Coastal Ron]

SpaceX receives around 1bn$ per year from US government (mainly NASA)...

You need to be more explicit in what you are saying, because someone could interpret what you are saying to mean that you think SpaceX is receiving subsidies from the U.S. Government, and that would not be true.

SpaceX has contracts that they won under competitive bidding to perform services for the U.S. Government. The largest part of that would be for NASA under Commercial Cargo and Commercial Crew, but they also have won contracts for doing launches for the USAF. And let's remember that SpaceX is listed as one of the official launch options via the NASA Launch Services (NLS) II Contract.

...so no they are not different from Arianespace or any other international competitors.

You are wrong. Arianespace receives direct subsidies for their launches. Pretty much everyone else outside of the U.S. is supported by their government in one way or another, and some have even said that the $1B/year ULA receives is a form of subsidy (some disagree, so let's not debate it here).

Bottom line though is that SpaceX receives no subsidies, unlike their international competitors.

By the way spaceX is 15 years old and still launching from US government launch sites in Vandenberg and Cape Canaveral.

SpaceX pays the U.S. Government to lease their launch sites, and they pay the going rate. SpaceX received no special treatment and no special discounts just because of who they are. So I'm not sure what you are alleging here...

[oldAtlas_Eguy]

What I was trying to point out in my previous post is that a very quickly rising demand over the next 5 years will cause ever launch provider to be busy. Their competitive positions will only be a deciding value in the profit total they make and the total number of launches they make in a year not whether or not they will be in business or not. To use the current payload constrained (customer constrained model) where competition is the end all in who gets what market share and those with insufficient market share will go out of business is the wrong model when evaluating what will be the status-que 5 years from now.

An expanding market doesn't necessarily raise all boats equally.  New orders will be coming from players who are entering the game because costs have dropped sufficiently to close their business cases.  They will be ordering from whomever can rapidly expand their launch volume (maintain backlog at a manageable level) and continue dropping their costs.

Say the market doubles to around 200 launches five years from now...  how will market share be divided in 2022?

In 2022 the market will be divided much like it is now but with SpaceX a slightly larger share. Currently right now SpaceX has by count of launches 23% of the launch provider market. Remember that the F9 is classed as a Heavy class LV at >20mt. But many of the current year 52 launches were by medium and small launchers that also many of F9 launched payloads would fit. Also BO will start taking significant share but as the total launches increase the expendable launchers just cannot increase their launch rate as easily as a reusable launcher. So they will have their own internal constraints on launch rates such that those additional launches will show up in SpaceX and BO's manifest. At 50 per year with a total number of launches per year world wide of 200 that's is still only 25% . If BO snags another 20% ~30 to 40 launches and the remainder 110 to 120 go the the rest of the field where their launch rates increase by a factor of 2 but their market share actually decreases by 20%. As time goes by their market share will continue to decrease with reusable cheaper launch providers shares increasing.

[Mike Jones]

You are wrong too CoastalRon ! NASA is paying each launch at a much higher price than commercial missions on falcon 9. That's an indirect subsidy allowing them to bid low on commercial market. Everybody outside USA knows this fact. This pernicious system is applied by NASA and USAF at a much larger scale than the 100 M$ yearly subsidy received by Arianespace or the government support received by roscosmos or MHI.

If you think that SpaceX is paying the real cost at Vandenberg and Cape Canaveral by leasing the pads for a few millions over 20 years you are in denial.

Every spacefaring nations support their domestic launch service provider. That's a fact and SpaceX is no exception. The support received by ULA from USAF is just so huge that in comparison NASA's support to SpaceX seems more acceptable for their supporters.

[rockets4life97]

You are wrong too CoastalRon ! NASA is paying each launch at a much higher price than commercial missions on falcon 9.

If you weren't aware, the U.S. government pays more for everything from office supplies to air planes. Getting a government contract is always a good way to make profit.

[oldAtlas_Eguy]

You are wrong too CoastalRon ! NASA is paying each launch at a much higher price than commercial missions on falcon 9.

If you weren't aware, the U.S. government pays more for everything from office supplies to air planes. Getting a government contract is always a good way to make profit.

That is by law the US gov has to pay the provider at a reasonable profit margin. That is usually toward the higher end for a given product (>average profit margin). Part of the bid analysis is the gov determining if the provider is actually bidding with an appropriate profit margin or is trying to force others out of the business by an "unfair" bid.

[envy887]

You are wrong too CoastalRon ! NASA is paying each launch at a much higher price than commercial missions on falcon 9.

NASA does not buy a launch on Falcon 9 (At least for CRS). They buy a delivery to the ISS, which includes a spacecraft and a month of on-orbit ops. These services have much higher fixed costs per mission than a commsat launch, so CRS and commsat prices are not comparable.

If you think that SpaceX is paying the real cost at Vandenberg and Cape Canaveral by leasing the pads for a few millions over 20 years you are in denial.

What are the real costs to the USAF and NASA for the SpaceX pads at VAFB, CCAFS, and KSC? Very little. What is the real market value of those pads? Also very little. SpaceX builds and operates their own facilities on these pads at essentially no cost to the taxpayer. And this has little to do with their competitiveness.

[Robotbeat]

NASA pays more for Dragon launches because Dragons are very expensive, maybe more than an entire Falcon 9.

I don't think that Dragon launches have a particularly high profit margin for SpaceX. Dragon requires a huge amount of overhead, and NASA is basically the only customer (unlike Falcon).

SpaceX could cut a lot of costs if they didn't fly Dragon any more.

[AncientU]

Copied over from another thread:

SpaceX's great year continues, looking good to have the most launches of any launch provider globally this year.

China expects about 30 launches.

Q:  How many launches are you planning for this year?

A:  Around 30; China has a lot of domestic launch needs. For example, the Beidou navigation constellation is still at the deployment stage to become a global system by 2020. Also, there are some Chinese domestic programs for Earth observation, weather satellites, and also human exploration and deep space exploration programs. All these areas are requiring a significant number of launches. Last year we were on par with the U.S. for 22 launches. I think this year we might be No. 1 in terms of launches. (Editor’s note: this interview was conducted before the July 2 failure of China’s Long March 5 rocket.)

http://spacenews.com/back-to-back-commercial-satellite-wins-leave-china-great-wall-hungry-for-more/

Please note, I've copy/pasted this thread-within-thread discussion, starting with the post quoted above, and continued it in the Chinese launch schedule thread, starting here.

It seems more relevant there.

China is the real competition for gross number of orbital launches.  They don't have access too much of the commercially competed market, though, do they?  Essentially all of their launches are national -- which is quite impressive in itself.

[Coastal Ron]

You are wrong too CoastalRon !

That has happened, but so far you have not provided any proof to back up your claims, so let's look at what your allegations are:

NASA is paying each launch at a much higher price than commercial missions on falcon 9.

SpaceX advertises their STANDARD launch prices on their website, which today is $62M to move up to 5.5mT to GTO. However for NASA science payloads the U.S. Government has already pre-negotiated standard launch prices under the NASA Launch Services Program. Here is the Vehicle Information page for the program, and you can click on Falcon 9 to see what SpaceX offers.

All of that covers standard services, but each launch customer may have different NON-STANDARD services that they require, and each launch provider bids that separately. So maybe that is the source of your confusion?

For instance, SpaceX won a $112M contract for the NASA SWOT satellite, and in the press release NASA stated about the price:

"The total cost for NASA to launch SWOT is approximately $112 million, which includes the launch service; spacecraft processing; payload integration; and tracking, data and telemetry support."

I've worked for government contractors before, so this is standard stuff to me, but maybe you're new to the world of government contracting and that is why you are making wrong assumptions.

That's an indirect subsidy allowing them to bid low on commercial market.

Subsidy. You keep using that word, I don't think it means what you think it means...   

Seriously though, SpaceX has won all of their government contracts thru the competitive bid process, so how in any way are there subsidies involved?

You have a lot of explaining to do, and you better document your justifications.

If you think that SpaceX is paying the real cost at Vandenberg and Cape Canaveral by leasing the pads for a few millions over 20 years you are in denial.

Or you're wrong. Only one way to know - show us some facts. Because SLC-40 would likely just be sitting there unused if SpaceX hadn't leased it, so the U.S. Government is making money off of an asset that otherwise would not have been generating any income. So somehow you are going to have to show that SpaceX is paying below market rates, which unless you have inside information from the U.S. Government is going to be hard to do.

Every spacefaring nations support their domestic launch service provider. That's a fact and SpaceX is no exception. The support received by ULA from USAF is just so huge that in comparison NASA's support to SpaceX seems more acceptable for their supporters.

My background includes product costing for manufacturing companies, for both commercial and government contractors, and I have made it my mission to understand the cost structure of space transportation systems. I say that just so you know you're not dealing with a normal space enthusiast. Impress us with accurate information, not unsupported allegations.

[AncientU]

What I was trying to point out in my previous post is that a very quickly rising demand over the next 5 years will cause ever launch provider to be busy. Their competitive positions will only be a deciding value in the profit total they make and the total number of launches they make in a year not whether or not they will be in business or not. To use the current payload constrained (customer constrained model) where competition is the end all in who gets what market share and those with insufficient market share will go out of business is the wrong model when evaluating what will be the status-que 5 years from now.

An expanding market doesn't necessarily raise all boats equally.  New orders will be coming from players who are entering the game because costs have dropped sufficiently to close their business cases.  They will be ordering from whomever can rapidly expand their launch volume (maintain backlog at a manageable level) and continue dropping their costs.

Say the market doubles to around 200 launches five years from now...  how will market share be divided in 2022?

In 2022 the market will be divided much like it is now but with SpaceX a slightly larger share. Currently right now SpaceX has by count of launches 23% of the launch provider market. Remember that the F9 is classed as a Heavy class LV at >20mt. But many of the current year 52 launches were by medium and small launchers that also many of F9 launched payloads would fit. Also BO will start taking significant share but as the total launches increase the expendable launchers just cannot increase their launch rate as easily as a reusable launcher. So they will have their own internal constraints on launch rates such that those additional launches will show up in SpaceX and BO's manifest. At 50 per year with a total number of launches per year world wide of 200 that's is still only 25% . If BO snags another 20% ~30 to 40 launches and the remainder 110 to 120 go the the rest of the field where their launch rates increase by a factor of 2 but their market share actually decreases by 20%. As time goes by their market share will continue to decrease with reusable cheaper launch providers shares increasing.

BO will be fortunate to launch a handful of times in 2022.  SpaceX is more likely to break 100 than BO to reach 30-40 by then.

To answer my own question above, I believe that in the 200 world-wide orbital launch 2022 scenario, SpaceX will have between one third and one half of the market -- 67-100 launches.

[IainMcClatchie]

Both [Arianne and ALU] are very lucky that BO is as slow as it is.

This is a pretty interesting insight.

SpaceX isn't an existential threat to ULA, because the US government wants their to be two providers, so that they can keep launching when one provider has to stand down to deal with a mishap.

Blue Origin, on the other hand, is very much an existential threat to ULA.  I think the $1 billion/year "maintaining capability" payment to ULA will go away shortly after BO is able to bid on USG launches.  That is, BO has to get all the clearances first.

So it's very interesting that ULA and BO are doing business with one another.  BO could service the commercial market without being able to bid on USG launches.  That would give BO access to a good portion of their market they want without threatening the capability cash cow to ULA.  If BO contributes the majority of the value to ULA (the notion that much of the value of the rocket is the engine), that's better for BO.

I wonder if BO is going slow for contractual reasons.

[meekGee]

Both [Arianne and ALU] are very lucky that BO is as slow as it is.

This is a pretty interesting insight.

SpaceX isn't an existential threat to ULA, because the US government wants their to be two providers, so that they can keep launching when one provider has to stand down to deal with a mishap.

Blue Origin, on the other hand, is very much an existential threat to ULA.  I think the $1 billion/year "maintaining capability" payment to ULA will go away shortly after BO is able to bid on USG launches.  That is, BO has to get all the clearances first.

So it's very interesting that ULA and BO are doing business with one another.  BO could service the commercial market without being able to bid on USG launches.  That would give BO access to a good portion of their market they want without threatening the capability cash cow to ULA.  If BO contributes the majority of the value to ULA (the notion that much of the value of the rocket is the engine), that's better for BO.

I wonder if BO is going slow for contractual reasons.

BO has been slow since forever, I don't think you need a nefarious/cunning explanation...

But, I think the endgame of the ULA/BO saga is an inevitable merger (which will promptly be sensed by LIGO)

It solves everyone's problems in one fell swoop.