Author Topic: Reusability effect on costs  (Read 167136 times)

Offline CuddlyRocket

Re: Reusability effect on costs
« Reply #180 on: 10/09/2016 05:54 AM »
Seems to me the key phrase is "as we recover some of the costs associated with the investment that we put into the Falcon 9 to achieve (reusability), then we might get a little bit more (price reduction)..."

Which says to me they're simply trying to recoup the major investment they've made in recoverability efforts, the ASDS fleet, etc, before dropping the price significantly.


Except she did not say they would "drop the price significantly."

She said "a little bit more."

You do realize that "little bit" and "significantly" are not synonyms?

You don't tell your customers or potential customers that with a 10% reduction SpaceX will have nice, big, fat profit margins. People get miffed if they think you're coining it at their expense! Far better to imply there'll be a little more cost reduction in future and have them be pleasantly surprised at consequent price reductions rather than have them thinking 'about time!'

Offline guckyfan

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Re: Reusability effect on costs
« Reply #181 on: 10/09/2016 06:10 AM »
Also support posts like accountant, lawyer and janitor costs are split between all parts of the company, they are not launch cost.

The cost of the company is the cost of the launch as long as you have one revenue stream, which is launch services. The more you launch and the higher the revenue, the thinner you spread these costs across a single launch. It's pretty simple, really.

You are saying development cost of the next car generation is part of the production cost of the present car generation. That's not simple, it's simply wrong.

Offline b0objunior

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Re: Reusability effect on costs
« Reply #182 on: 10/09/2016 08:15 AM »
Also support posts like accountant, lawyer and janitor costs are split between all parts of the company, they are not launch cost.

The cost of the company is the cost of the launch as long as you have one revenue stream, which is launch services. The more you launch and the higher the revenue, the thinner you spread these costs across a single launch. It's pretty simple, really.

You are saying development cost of the next car generation is part of the production cost of the present car generation. That's not simple, it's simply wrong.
I think he's talking about net profit, still wrong thought.

Offline TrevorMonty

Re: Reusability effect on costs
« Reply #183 on: 10/09/2016 08:31 PM »
If a company needs to recover their R&D investment, which is normal practice, then discounts on RLV launch costs a going to be small.
What say there is no requirement to recover R&D investment, then launch costs only need to cover operational costs plus modest profit. Blue may well be in this situation, Bezos is funding Blue to get more people into space, not to grow his future in near term.


Offline envy887

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Re: Reusability effect on costs
« Reply #184 on: 10/10/2016 04:28 PM »
Seems to me the key phrase is "as we recover some of the costs associated with the investment that we put into the Falcon 9 to achieve (reusability), then we might get a little bit more (price reduction)..."

Which says to me they're simply trying to recoup the major investment they've made in recoverability efforts, the ASDS fleet, etc, before dropping the price significantly.


Except she did not say they would "drop the price significantly."

She said "a little bit more."

You do realize that "little bit" and "significantly" are not synonyms?

Shotwell is obviously tempering expectations, that's part of her job.

Lars Hoffman, who is also a senior SpaceX exec, put it a little bit 8) differently a few weeks ago:

Quote
Hoffman: expect to take a couple years to refine the refurb process and costs. See “significant” cost savings in a few years. #AIAASpace
https://twitter.com/jeff_foust/status/775816294234857474

Offline DOCinCT

Re: Reusability effect on costs
« Reply #185 on: 10/10/2016 05:15 PM »
Also support posts like accountant, lawyer and janitor costs are split between all parts of the company, they are not launch cost.

The cost of the company is the cost of the launch as long as you have one revenue stream, which is launch services. The more you launch and the higher the revenue, the thinner you spread these costs across a single launch. It's pretty simple, really.

You are saying development cost of the next car generation is part of the production cost of the present car generation. That's not simple, it's simply wrong.

You either borrow the money to pay for the development costs or you self-fund it out of revenue stream (profits).  Boeing is $30Billion in the hole on the 787 aircraft which has been amortized over 10 years. They won't break even until they sell 1,100 planes, thus recouping the investment.  Sales of existing planes helped pay for that cost.

Offline guckyfan

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Re: Reusability effect on costs
« Reply #186 on: 10/10/2016 05:27 PM »

You either borrow the money to pay for the development costs or you self-fund it out of revenue stream (profits).  Boeing is $30Billion in the hole on the 787 aircraft which has been amortized over 10 years. They won't break even until they sell 1,100 planes, thus recouping the investment.  Sales of existing planes helped pay for that cost.

None of this makes those cost part of the launch cost of the present generation of rockets. And that's where the argument started.

Offline savuporo

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Re: Reusability effect on costs
« Reply #187 on: 10/12/2016 03:02 AM »
http://spacenews.com/shotwell-says-spacex-homing-in-on-cause-of-falcon-9-pad-explosion/

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Two more full-duration static-fire tests are planned for the stage to gain confidence for limited reuse of the first stage. “We’ll feel pretty good about reflying each stage once or twice” once those tests are complete, she said. An updated version of the Falcon 9, to be rolled out next year, should be able to reuse its first stage up to 10 times


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Offline Radical_Ignorant

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Re: Reusability effect on costs
« Reply #188 on: 10/15/2016 11:12 PM »
Financial house of cards. That's nice. Yeah. What cost is, that's quite a question. It's not that SpaceX is outsourcing rocket production and cost is in bill for the booster. It's some artificial figure. And it is also true that SpaceX has some running costs and income from launch services. As GS stated less than 10% of company is working on other things than current rocket, so basically idea that SpaceX operating costs divided by nr of launches is their cos is pretty close. Especially that EM likes vertical integration and costs of materials are not big. So that's pretty good approximation IMHO. Reusability can free up some resources to achieve greater launch rate and thus reduce cost. But still bottleneck to this can be in  some launch process operations.

Offline gosnold

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Re: Reusability effect on costs
« Reply #189 on: 10/17/2016 05:33 PM »
I found this interesting slide in a CNES presentation (IAC-16,D2,4,6,x32453) at the last IAC.

Also, there was a presentation from RuAG about fairing reusability (IAC-16,D2,5,13,x35869), and they think it is feasible. They are working on it. I attached one slide with the estimated savings.


Online john smith 19

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Re: Reusability effect on costs
« Reply #190 on: 10/17/2016 06:06 PM »
If a company needs to recover their R&D investment, which is normal practice, then discounts on RLV launch costs a going to be small.
In pretty well every other industry except the launch business, where historically major new developments have been funded either directly by governments or with very substantial funding by a government who expects to use the vehicles heavily. IE the EELV programme.
Quote
What say there is no requirement to recover R&D investment, then launch costs only need to cover operational costs plus modest profit. Blue may well be in this situation, Bezos is funding Blue to get more people into space, not to grow his future in near term.
We'll see either way.

So 2 reuses or 10 reuses is not going to bring down the launch cost very much at all.   :(

It just won't

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Offline envy887

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Re: Reusability effect on costs
« Reply #191 on: 10/17/2016 08:33 PM »
...
So 2 reuses or 10 reuses is not going to bring down the launch cost very much at all.

Cost or price? I can't imagine even 1 reuse not bringing the per launch expended cost down significantly.

Price, however needs a driver. SpaceX has no real reason to lower the price right now.

Offline JamesH65

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Re: Reusability effect on costs
« Reply #192 on: 10/18/2016 12:28 PM »
If a company needs to recover their R&D investment, which is normal practice, then discounts on RLV launch costs a going to be small.
In pretty well every other industry except the launch business, where historically major new developments have been funded either directly by governments or with very substantial funding by a government who expects to use the vehicles heavily. IE the EELV programme.
Quote
What say there is no requirement to recover R&D investment, then launch costs only need to cover operational costs plus modest profit. Blue may well be in this situation, Bezos is funding Blue to get more people into space, not to grow his future in near term.
We'll see either way.

So 2 reuses or 10 reuses is not going to bring down the launch cost very much at all.   :(

It just won't

Why should SpaceX drops launch price when they are still cheaper than anyone else? They can use a few years of launches to get some real cash in for R&D; as others drop their price, they have the margin to drop theirs. The only reasons to drop now would be to increase market size, but since they have a long manifest waiting anyway, there is no point. Which is a shame, as there are scientists waiting for cheaper launch costs. They will just have to wait a bit longer.

Offline savuporo

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Re: Reusability effect on costs
« Reply #193 on: 10/18/2016 12:34 PM »
Why should SpaceX drops launch price when they are still cheaper than anyone else?..
For the same reason why Spirit Airlines charges less.
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Offline envy887

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Re: Reusability effect on costs
« Reply #194 on: 10/18/2016 12:50 PM »
Why should SpaceX drops launch price when they are still cheaper than anyone else?..
For the same reason why Spirit Airlines charges less.
They charge less because they can increase total revenue through a variety of mechanisms, most of which don't apply to the orbital launch market. Also, they have competition that's much more competitive than SpaceX's.

Online Robotbeat

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Re: Reusability effect on costs
« Reply #195 on: 10/19/2016 03:13 AM »
...
So 2 reuses or 10 reuses is not going to bring down the launch cost very much at all.   :(

It just won't
Yeah it would.

Let's say SpaceX can't actually produce more than 9 Falcon cores per year (let's forget upper stages for now). That means they can do 9 F9 launches or 3 Heavies or some mixture in between. That's it. That's as good as they've done so far, but this here would be at the limit of their production capability. No more growth possible.

If they can reuse stuff 10 times (with minimal refurb, for the sake of this argument), that means, say, 20 Falcon 9s and 20 Falcon Heavies per year (assume some of the center cores are expended). Or 90 Falcon 9s per year.

An order of magnitude more launches with the same manufacturing line. That'd DRAMATICALLY cut down on the cost per launch to SpaceX, thus giving them huge profits or allowing large price reductions.
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Online john smith 19

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Re: Reusability effect on costs
« Reply #196 on: 10/19/2016 03:19 AM »
...
So 2 reuses or 10 reuses is not going to bring down the launch cost very much at all.

Cost or price? I can't imagine even 1 reuse not bringing the per launch expended cost down significantly.

Price, however needs a driver. SpaceX has no real reason to lower the price right now.
Cost. Price is whatever SX want to charge customers. And I'll repeat SX is not  cheaper than all other suppliers in the comm sat market. It is competitive with Arianespace in this sector.  It's not I'd-be-crazzzy-to-buy-a-launch-from-anyone-else good.If you're worried about launch risk however you'd go with Ariane 5 right now.

While you throw away the upper stage system price drops to roughly the refurb cost of the lower stage  plus the cost of the new upper stage.

As a customer I'd want substantially  lower prices because SX are getting half their rocket back. I certainly don't want to pay the full (expendable) launch price. Can I have that offset against the cost of a future launch? 

I'll remind people $62m to LEO is only relatively cheap to orbit. Look at how the round trip costs between 2 cities roughly on opposite sides of this planet (roughly the same energy cost) by air compare to see what real low cost means.
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Online john smith 19

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Re: Reusability effect on costs
« Reply #197 on: 10/19/2016 03:24 AM »
An order of magnitude more launches with the same manufacturing line. That'd DRAMATICALLY cut down on the cost per launch to SpaceX, thus giving them huge profits or allowing large price reductions.
This story only works if there are enough payloads out there that will accept using F9 or FH at the prices SX charge.

BTW Shotwell stated the FH core will be different to the F9 lower stage which implies they will not be interchangeable. Once you commit to making that core an FH core you've also committed to a certain mix of F9 and FH launches. Not necessarily an issue as long as you don't have a surge of launches that exhausts your store of the right kind of cores or your refurb capability.
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Offline JamesH65

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Re: Reusability effect on costs
« Reply #198 on: 10/19/2016 09:13 AM »
As a customer I'd want substantially  lower prices because SX are getting half their rocket back. I certainly don't want to pay the full (expendable) launch price. Can I have that offset against the cost of a future launch? 

As a customer, you can complain all you like, but if SpaceX are cheaper, and you go with someone else because you are not getting a discount since SpaceX are getting half their rocket back, then you are making a bad business decision. You are paying more for the same service, because you are being petty. Shareholders might have something to say about that.

SpaceX just need to be cheaper, whether reusable or not, for people to use them in preference.





Online john smith 19

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Re: Reusability effect on costs
« Reply #199 on: 10/19/2016 11:18 AM »
As a customer, you can complain all you like, but if SpaceX are cheaper, and you go with someone else because you are not getting a discount since SpaceX are getting half their rocket back, then you are making a bad business decision. You are paying more for the same service, because you are being petty. Shareholders might have something to say about that.

SpaceX just need to be cheaper, whether reusable or not, for people to use them in preference.
All things being equal you might be right. But then you factor in their recent safety record IE your chance of getting to orbit.

The 2nd explosion will have an effect on sales that only a successful RTF will cure.  :(

My interest is solely on lowering the price of launch for a viable payload by a lot.

2-10 flights of re use and an expendable US won't deliver that.
« Last Edit: 10/19/2016 11:20 AM by john smith 19 »
BFS. The worlds first Methane fueled FFORSC engined CFRP structured A380 sized aerospaceplane tail sitter capable of flying in Earth and Mars atmospheres. BFR. The worlds biggest Methane fueled FFORSC engined CFRP structured booster for BFS. First flight to Mars by end of 2022. Forward looking statements. T&C Apply So, you are going to Mars to start a better life? Picture it in your mind. Now say what it is out loud.

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