The Reaction Engines Skylon/SABRE Master Thread (6)

[JCRM]

[stuff trimmed, because nobody needs to see a page of text followed by a one line reply]
Somebody has got to build it first, and that's where ESA might have come in.

ESA do not build launchers.

They don't, but they do set policies and allocate funding.

[john smith 19]

But let's be a little more optimistic, and look at S-ELSO4, the most optimistic of the sole-operator cases presented - an order of 10 Skylons (100 launches a year), the price drops to 3.4 billion Euros, so 1 billion for the runway, 7 billion for a pair of skylons, at ten launches a year for 10 years thats still 80 million per launch in assets alone - and doesn't include the 1.8 billion Euros for a second launch facility.

The study shows, even at the pessimisticrate, a profit can be made at 41.5 billion per launch over 20 years.

Skylon uses breakthroughs in technology to leverage breakthroughs in operations to give breakthroughs in pricing

Emphasis mine.

Skylon was designed to be sold and operated like an airliner, not an ICBM. This study was written solely  to support the existing European traffic model, IE like an ELV.
IRL a Skylon consortium would sell to operators (who the study notes always make a profit) based not on some "traffic model" but on who wanted space access.

It is not the manufacturers business wheather there are enough launches to sustain the operators model, just as it is neither Airbus, or Boeing's concern wheather the airlines they sell it to can sell enough tickets on a route to make the purchase of one of their aircraft worthwhile.

Operations will allow a higher flight rate which will allow lower prices, but only if the flight rate increases.

Actually selling more Skylons lowers prices, because that allows effective competition, which is what really lowers prices, and lowers the fly away price of Skylon.

I think Skylon (or something better, it's a baseline after all) is the right way to go, but it doesn't make business sense for Arianespace to pursue it at this time. Somebody has got to build it first, and that's where ESA might have come in.

Arianegroup would not be my first choice as Skylon constructor. That would have been Airbus group, because of their background in civilian aviation and their understanding of the idea of setting a breakeven sales volume. This all inclusive pricing is the way weapon systems are sold.  It has no place in a fully reusable commercial product.

But we will see how things work out.

[JCRM]

But let's be a little more optimistic, and look at S-ELSO4, the most optimistic of the sole-operator cases presented -

Emphasis mine.

Ariane Group's business models to sell launchers to Ariane Space, The CEO's problem with reusability is  leaving his rocket-building staff unemployed after building one reusable rocket a year to service  launch operator operating in a market of 10 launches per year. You mentioned the commercail model for Skylon from the S-ELSO paper requires 30 Skylons to be succesful as a PPP, which even if he had other customers at a modest construction rate of two a year would mean he needed to be servicing launch operators dealing in a market of 60 launches a year by his third year of construction. Skylon does not answer Alain Charmeau's issue with reusability, QED.

Reusabiliy isn't really working for SpaceX either at the moment - Musk's needed to generate payloads for his launchers by this internet connectivity constellation.

At the ESA approved development and production costs for Skylon, it either needs the public purse to pay for development, or it needs something to drive payloads into the multiple launches a week region. SSP is my favourite, but LOP-G done the REL modular space stations way would be a start.
But this once again becomes a chicken and egg situation, SSP isn't viable without the launch costs possible with Skylon, and nobody is going to plan space stations to be launched by Skylon until there is a very high probability of a Skylon. Getting a working engine is a big step towards this future. Having engines working in military subsidised TSTO launchers might help demonstrate reliability (or work out the bugs towards it) and so improve investor confidence in building a high reuse SSTO but evn then it'll be a leap of faith - if you build it the payloads will come.

[t43562]

All exploration seems to be chicken-and-egg-ish.  Henry the Navigator sent ships to find a route to the east around Africa but I am not sure Portugal was really the major beneficiary of that effort and yet someone with money had to take those steps for it to eventually become very important and profitable.  There may not be a business case that makes sense until after a lot more money has been 'wasted' or at least spent without hope of immediate return.

[JCRM]

IRL a Skylon consortium would sell to operators (who the study notes always make a profit) based not on some "traffic model" but on who wanted space access.

provided they managed a 75% utilisation at 41.5 million Euros for the Skylon launch (i.e. excluding other services such as assurance)

It is not the manufacturers business wheather there are enough launches to sustain the operators model, just as it is neither Airbus, or Boeing's concern wheather the airlines they sell it to can sell enough tickets on a route to make the purchase of one of their aircraft worthwhile.

They will sell an existing craft to anyone that wants one. A leasing or finance company for the operator may want to see some evidence though.

They manufacturer will, however, do their utmost to be VERY sure that there is a market for the type of vehicle they develop before developing it.

Operations will allow a higher flight rate which will allow lower prices, but only if the flight rate increases.

Actually selling more Skylons lowers prices, because that allows effective competition, which is what really lowers prices, and lowers the fly away price of Skylon.

Absolutlely, competition is the main driver for lowering prices, but without a higher flight rate there wont be the lower costs to allow the lower prices. (short term competition may allow flying at a loss, but that doesn't end well)

Arianegroup would not be my first choice as Skylon constructor.

But that was Soundbite's suggestion[/quote]
That would have been Airbus group, because of their background in civilian aviation and their understanding of the idea of setting a breakeven sales volume. [/quote] ... and if they don't believe the market will meet that volume, then they wont continue the development of the project.  Table 6 of the paper gave IRRs for sales volumes/pricepoints - effectively breakeven points.

This all inclusive pricing is the way weapon systems are sold.  It has no place in a fully reusable commercial product.

I'm not at all sure what you mean here.

But we will see how things work out.

All exploration seems to be chicken-and-egg-ish.  [...] someone with money had to take those steps for it to eventually become very important and profitable.  There may not be a business case that makes sense [except] without hope of immediate return.

I fear SpaceX have achieved "good enough" to prevent a direct to Skylon development private investment path - without a motivated investor (such as JB with Blue), government backing (e.g Henry the Navigator and caravels) or an anchor payload (possibly stretching, but CSM/LEM for Saturn V)

[Star One]

To stay strictly on topic I just want to see if REL says anything on the matter and that’s all.

[john smith 19]

It is not the manufacturers business wheather there are enough launches to sustain the operators model, just as it is neither Airbus, or Boeing's concern wheather the airlines they sell it to can sell enough tickets on a route to make the purchase of one of their aircraft worthwhile.

They will sell an existing craft to anyone that wants one. A leasing or finance company for the operator may want to see some evidence though.

Skylons development plan includes 200 test flights. I would expect at some point during that process there would be some end user sales. I would also expect the consortium would have accumulated data necessary for leasing companies to make a decision by then.

Absolutlely, competition is the main driver for lowering prices, but without a higher flight rate there wont be the lower costs to allow the lower prices. (short term competition may allow flying at a loss, but that doesn't end well)

For a semi or fully expendable LV you're right.
For Skylon a company would go bankrupt and it's fully viable asset IE Skylon is sold off by its creditors.
Giving someone a Skylon at below retail price.

Fully reusable launch vehicle economics are rather different to either semi or fully expendable LV's.

This all inclusive pricing is the way weapon systems are sold.  It has no place in a fully reusable commercial product.

I'm not at all sure what you mean here.

The policy of including all the startup costs of a project in the first batch of vehicles is how miltary contractors (like BAe) price things. Possibly the most famous case of this was the XB70. Since only 2 aircraft were built they carried the entire startup costs of the programme, IE $500k each
Outside miltary contractors the usal pricing strategy is to calculate a profit margin over mfg costs for a vehicle (the marginal costs), accept you will not make a profit until you've sold that many vehicles and then start making a profit on every vehicle you sell.
Miltary pricing ensures the company never makes a loss. but for pretty much every other business in anything like a competitve market it's impossible.

I fear SpaceX have achieved "good enough" to prevent a direct to Skylon development private investment path - without a motivated investor (such as JB with Blue), government backing (e.g Henry the Navigator and caravels) or an anchor payload (possibly stretching, but CSM/LEM for Saturn V)

I think how things look and how things are can be very different things. It depends on how good a business case REL can make. REL have a strong technology case. Funding has always been their problem, especially finding a way to gain committments to buy Skylons which would be acted upon by a third party (the Skylon consortium).

[johnfwhitesell]

The startup costs thing is also very annoying when it comes to cars.  Whenever an automaker is struggling you will inevitably start hearing that they are "losing money on every car" a conclusion arrived at by dividing the profits by the number of cars and observing it is less then zero.

[Cheapchips]

Not sure if this is quite the thread for it, but the excellent Interplanetary Podcast #86 has part 1 of an interview with Alan Bond on his fascinating career.  Part one loosely covers up to forming Reaction Engines, originally just with the intent of preserving the technology.

https://www.interplanetary.org.uk/episodes

[Patchouli]

The startup costs thing is also very annoying when it comes to cars.  Whenever an automaker is struggling you will inevitably start hearing that they are "losing money on every car" a conclusion arrived at by dividing the profits by the number of cars and observing it is less then zero.

That has been a serious road block for a lot of startups that otherwise had a sound design and business case.

[JCRM]

Not sure if this is quite the thread for it, but the excellent Interplanetary Podcast #86 has part 1 of an interview with Alan Bond on his fascinating career.  Part one loosely covers up to forming Reaction Engines, originally just with the intent of preserving the technology.

https://www.interplanetary.org.uk/episodes

I was waiting for the second part before bringing it up, to see how relevant it is. As ever, an entertaining biography, and touching on the depth of experience including his involvement with the RZ20 LH2/LOX engine

[JCRM]

It is not the manufacturers business wheather there are enough launches to sustain the operators model, just as it is neither Airbus, or Boeing's concern wheather the airlines they sell it to can sell enough tickets on a route to make the purchase of one of their aircraft worthwhile.

They will sell an existing craft to anyone that wants one. A leasing or finance company for the operator may want to see some evidence though.

Skylons development plan includes 200 test flights.

Hempsell's test program did, but they also had a straight to Skylon development model. They couldn't get that funded. I don't know if the current management would have such a generous test program planned.

I would expect at some point during [the test] process there would be some end user sales. I would also expect the consortium would have accumulated data necessary for leasing companies to make a decision by then.

I'm sure they would make some sales, but I doubt they would make more than 20 sales a year, I doubt they could give away 50 launches a year.

Absolutely, competition is the main driver for lowering prices, but without a higher flight rate there wont be the lower costs to allow the lower prices. (short term competition may allow flying at a loss, but that doesn't end well)

For a semi or fully expendable LV you're right.
For Skylon a company would go bankrupt and it's fully viable asset IE Skylon is sold off by its creditors.
Giving someone a Skylon at below retail price.

who would then be able to further undercut the remaining operators. As I said, that doesn't end well. You end up with the reputation of Skylon being loss making, just like Concorde.

Fully reusable launch vehicle economics are rather different to either semi or fully expendable LV's.

citation needed

This all inclusive pricing is the way weapon systems are sold.  It has no place in a fully reusable commercial product.

I'm not at all sure what you mean here.

The policy of including all the startup costs of a project in the first batch of vehicles is how miltary contractors (like BAe) price things. Possibly the most famous case of this was the XB70. Since only 2 aircraft were built they carried the entire startup costs of the programme, IE $500k each

For ArianeGroup to decide to go Skylon as their reusability route- which was the original suggestion - they have to be sure it will be built, which means they can't hope for other sales, but they would have to look at the sole-operator case as the worst case example.

Outside miltary contractors the usal pricing strategy is to calculate a profit margin over mfg costs for a vehicle (the marginal costs), accept you will not make a profit until you've sold that many vehicles and then start making a profit on every vehicle you sell.

which was EXACTLY the 30 Skylon commercial model, which gives Skylon a 1.6 billion Euro pricetag. An operator needs to sell 3 flights a year at 70 million to make an acceptable to investors 10% profit. With 30 Skylons operating that's 90 launches a year - the current market isn't a third of that. What lease company or investor is going to finance the purchase of the tenth Skylon, let alone the thirtieth?

I fear SpaceX have achieved "good enough" to prevent a direct to Skylon development private investment path - without a motivated investor (such as JB with Blue), government backing (e.g Henry the Navigator and caravels) or an anchor payload (possibly stretching, but CSM/LEM for Saturn V)

I think how things look and how things are can be very different things. It depends on how good a business case REL can make. REL have a strong technology case. Funding has always been their problem, especially finding a way to gain committments to buy Skylons which would be acted upon by a third party (the Skylon consortium).

REL had a very strong technology case - although with BFS the known good hardware and downmass USPs are no longer unique; and the number of payload intact abort scenarios increases for BFS too, again eating into a Skylon USP, so the investment case is much weaker. Hopefully the new management team will come up with a good business case, but "give us 15 billion so you can try to sell to operators who will have to join in a price war between SpaceX and Blue Origin" isn't a good starting point.
I believe BFR is more likely to fly than Skylon be funded on a commercial basis. That still leaves political, strategic and vanity as options.

[CrewtaiL]

REL mentioned in the following article:

http://aviationweek.com/commercial-aviation/boeing-unveils-hypersonic-airliner-concept

"Bowcutt says advanced cooling technology will be key, for controlling the thermal environment of the cabin, systems and propulsion system. The heat exchanger technology in development by Reaction Engines for the UK company’s SABRE propulsion system could play a part, he adds. Boeing, which along with Rolls-Royce announced in April that it was investing in Reaction, says the British developer is “supporting our study.” According to Bowcutt, who first discussed the possibility of a commercial hypersonic derivative at the Wharton Aerospace West Coast conference in early June, the heat exchanger could be a “nice synergy and might have a great application.”

[john smith 19]

REL mentioned in the following article:

http://aviationweek.com/commercial-aviation/boeing-unveils-hypersonic-airliner-concept

"Bowcutt says advanced cooling technology will be key, for controlling the thermal environment of the cabin, systems and propulsion system. The heat exchanger technology in development by Reaction Engines for the UK company’s SABRE propulsion system could play a part, he adds. Boeing, which along with Rolls-Royce announced in April that it was investing in Reaction, says the British developer is “supporting our study.” According to Bowcutt, who first discussed the possibility of a commercial hypersonic derivative at the Wharton Aerospace West Coast conference in early June, the heat exchanger could be a “nice synergy and might have a great application.”

Structural heating at M3-5 is serious. The various super-hyper sonic transport concepts NASA looked at in the late 70's to early 90's recognized this.  several had active cooling circuits for the skin but I could see this being a monumental PITA if it was punctured. They seemed to think routing GH2 under the skin a good idea.
Segmented heat pipes seemed a much safer concept to me. No active pump, the pipes could be sized to be redundant and if one was ruptured it would vent it's contents and that was all.

Too bad, given the work the EU funded in LAPCAT and the associated structures programme for high Mach flight.

[john smith 19]

Hempsell's test program did, but they also had a straight to Skylon development model. They couldn't get that funded. I don't know if the current management would have such a generous test program planned.

An interesting cost point is that the estimated project cost for the 3rd runway at London Heathrow is £14Bn, roughly $18.6Bn.

I'm sure they would make some sales, but I doubt they would make more than 20 sales a year, I doubt they could give away 50 launches a year.

You need to stop thinking of Skylon as an ELV.  You seem to be equating sales of the vehicle with actual launches. That implies a production rate like an ELV (or a semi ELV, which is much the same).
In practice I'd expect the Skylon mfg company (SKYLON Holdings? or whatever it's called) to mfg more like 2-4 a year and let the customers decide how many times they launch payloads.

Just like every other mfg of transport systems does it.

For a semi or fully expendable LV you're right.
For Skylon a company would go bankrupt and it's fully viable asset IE Skylon is sold off by its creditors.
Giving someone a Skylon at below retail price.

who would then be able to further undercut the remaining operators. As I said, that doesn't end well. You end up with the reputation of Skylon being loss making, just like Concorde.

You're sounding remarkably like a British civil servant of the late 80's/early 90's. They also had that "Skylon is like Concorde" meme. 
It seems that only retirement or death had started to change the British Governments outlook.
Their experience of Concorde was why REL's founders wanted nothing to do with government funding and I think Richard Varvill is still pretty weary of it.

Firstly if you're still expecting 20 vehicles a year off the production line you're still thinking in ELV terms.

Secondly early adopters will probably price at the going market rate or just below for expendable or semi expendable vehicles.
If they purchased Skylon for internal use (and offer it to other users as a way of covering their costs) then they may be lower.

Note that the only real example we have with SX's semi expendable F9 was that there was no price cut for launches once booster recovery was available. All benefits were retained by SX. And there entry to the market was lower (but not radically so) than their actual competition, and that was eroded when customers asked for special features, as Shotwell admitted in a keynote speech.
SX is competitive,  not "OMG their-prices-are-rock-bottom-I'd-have-to-be-insane-to-use-anyone-else" good.

With multiple operators price competition becomes an actual option. At some point those orbital hotels and factories start to make financial sense. Buying a Skylon just to support them becomes an option. Actual consistent scheduled services to space become a reality.
You want your 200Kg experimental package in LEO by the start of next month? Get it to the collection gate by 2pm next Friday. 

Here's the thing. Skylon can leverage most of the expertise in large aircraft design to reduce failure rates gained over nearly a century of commercial operations, which are roughly 1/100 000 that of LV's (expendable or semi expendable).
There is no comparable body of knowledge for ELV's (because if there were wouldn't they have all started using it by now?) so what is SX going to use to give BFR "airline like" reliability? If you're launching 100 times in a year it soon becomes obvious exactly what a 2% failure rate means.
And when you come down to it a BFR is a VTO rocket driven TSTO.

I've heard lots of talk from others but only Skylon looks like it can deliver on the promise.

BTW According to this article
http://news.bbc.co.uk/1/hi/business/2935337.stm
The author rather grudgingly admits that Concorde made an operating profit of £20m/year.
That's after all the crew salaries, fuel and maintenance costs were deducted. An under appreciated fact was the operators continued to make operational improvements during its lifetime. I would expect Skylon operators to do likewise. 
Noise won't be an issue as it won't be operated (except in emergency) from regular airports.

Fully reusable launch vehicle economics are rather different to either semi or fully expendable LV's.

citation needed

I'd start with Bono & Gatland "Frontiers of Space" but I'd thought the whole "Not throwing away all, or at best half of the vehicle" thing, something no other transport system does, might have been suggestive of a bit of a difference.

For ArianeGroup to decide to go Skylon as their reusability route- which was the original suggestion - they have to be sure it will be built, which means they can't hope for other sales, but they would have to look at the sole-operator case as the worst case example.

That makes absolutely no sense if you're going to manufacture Skylons as a business.

When REL looked at this question they paid to have a market survey done by specialists in the aircraft leasing business. I'd expect SKYLON Holdings would look to see who would be interested in buying a Skylon at what cost, not as single use vehicle with a 1 in 50 failure risk (like an ELV) but as a complete launch system, capable of launching their payloads on their schedule (and depending on their longitude and required payload their home country as well).

Pretty much the same way every other mfg of transport systems does it in fact. 

Outside military contractors the usal pricing strategy is to calculate a profit margin over mfg costs for a vehicle (the marginal costs), accept you will not make a profit until you've sold that many vehicles and then start making a profit on every vehicle you sell.

which was EXACTLY the 30 Skylon commercial model, which gives Skylon a 1.6 billion Euro pricetag.

And a cost model which increases the estimated development cost from $12Bn to $17.7Bn. This sounds very strange. REL missed $5.7Bn of development costs? Really? I wonder what the development budget for F9 would have been on this model?

An operator needs to sell 3 flights a year at 70 million to make an acceptable to investors 10% profit. With 30 Skylons operating that's 90 launches a year - the current market isn't a third of that. What lease company or investor is going to finance the purchase of the tenth Skylon, let alone the thirtieth?

Funny you should say that. It's been pointed out to me that there 68 orbital launches last year and the number has been steadily climbing.

Again 30 Skylons is the number  after decades of production.
Why are you so intent on this Doomsday, big bang scenario of the market being suddenly saturated with Skylons? BTW I'd expected Skylon funding per vehicle to be supplied by customers in stages, like other LV's or other large capital expenditures are paid for.

High launch prices are not a goal. They are a consequence. They need to come down a lot so those applications that need high , predictable or consistent launch rates (be they orbital hotels or factories to large crewed missions) can start becoming a reality.

I fear SpaceX have achieved "good enough" to prevent a direct to Skylon development private investment path - without a motivated investor (such as JB with Blue), government backing (e.g Henry the Navigator and caravels) or an anchor payload (possibly stretching, but CSM/LEM for Saturn V)

Why?

They haven't delivered on upper stage recovery or reuse and IRL the BFR is 8-10 years away and it's payload is 7.5x bigger than F9 to LEO.

I find it fascinating that people don't seem to get that the thinking behind BFR is exactly the same as the thinking that drove the Saturn V and currently SLS,
bigger --> lower price per Kg.
AFAIK most people reckon any SLS "Economy of scale" in terms of $/lb will be eaten by the huge standing army charges between launches.
Musk and SX will argue they will be absorbed by the large number they will be building for Mars, but we will see.

If SX had delivered what Shotwell was talking about in 2011, a $6m F9 launch then yes I'd agree.

But they haven't. If they do US recovery (with an economic payload on board) I'll be very interested to see what prices they charge regardless of what cost savings they make due to not expending the US.

REL had a very strong technology case - although with BFS the known good hardware and downmass USPs are no longer unique; and the number of payload intact abort scenarios increases for BFS too, again eating into a Skylon USP, so the investment case is much weaker.

How so?

 As a TSTO BFR aborts assume flawless stage separation and BFS engine ignition, much in the same way Shuttle "aborts" assumed the SRB's would work OK until they ran out of fuel and could be safely separated.
Challenger demonstrated this was a very dubious assumption to bet your life on. 
Different bet-your-life assumption. Same problem with betting on it. And BFS is way too big for an LES.

Hopefully the new management team will come up with a good business case, but "give us 15 billion so you can try to sell to operators who will have to join in a price war between SpaceX and Blue Origin" isn't a good starting point.

How about "lend us $12Bn (against these legally enforceable and inflation adjusted promises to buy if we deliver a vehicle to the stated specs, which we have already accumulated) and you will fund the preferred world wide RLV supplier for the 21st century. The space launch equivalent of Boeing or Airbus.

I believe BFR is more likely to fly than Skylon be funded on a commercial basis. That still leaves political, strategic and vanity as options.

Interesting use of language. The report you seem so keen on quoting did not think SKYLON Holdings could be entirely commercially funded but did think Public/Private Partnership could get the job done.

[Eric Hedman]

REL mentioned in the following article:

http://aviationweek.com/commercial-aviation/boeing-unveils-hypersonic-airliner-concept

"Bowcutt says advanced cooling technology will be key, for controlling the thermal environment of the cabin, systems and propulsion system. The heat exchanger technology in development by Reaction Engines for the UK company’s SABRE propulsion system could play a part, he adds. Boeing, which along with Rolls-Royce announced in April that it was investing in Reaction, says the British developer is “supporting our study.” According to Bowcutt, who first discussed the possibility of a commercial hypersonic derivative at the Wharton Aerospace West Coast conference in early June, the heat exchanger could be a “nice synergy and might have a great application.”

Even if Skylon never flies, applying the cooling technology to the turbo ramjet for Boeing's concept for a mach 5 airliner cruising at 95,000 feet would be pretty awesome.  I would take a flight just for the view that much closer to space.  An airliner that can cross the Pacific in three hours and land at any major airport might make SpaceX's concept of point to point travel with BFR/BFS a bit harder to sell.  We are living in very interesting times.

[Star One]

REL mentioned in the following article:

http://aviationweek.com/commercial-aviation/boeing-unveils-hypersonic-airliner-concept

"Bowcutt says advanced cooling technology will be key, for controlling the thermal environment of the cabin, systems and propulsion system. The heat exchanger technology in development by Reaction Engines for the UK company’s SABRE propulsion system could play a part, he adds. Boeing, which along with Rolls-Royce announced in April that it was investing in Reaction, says the British developer is “supporting our study.” According to Bowcutt, who first discussed the possibility of a commercial hypersonic derivative at the Wharton Aerospace West Coast conference in early June, the heat exchanger could be a “nice synergy and might have a great application.”

Even if Skylon never flies, applying the cooling technology to the turbo ramjet for Boeing's concept for a mach 5 airliner cruising at 95,000 feet would be pretty awesome.  I would take a flight just for the view that much closer to space.  An airliner that can cross the Pacific in three hours and land at any major airport might make SpaceX's concept of point to point travel with BFR/BFS a bit harder to sell.  We are living in very interesting times.

I imagine this technology if adopted would be first used in Boeing’s proposed SR-72 rival concept.

[JCRM]

Hempsell's test program did, but they also had a straight to Skylon development model. They couldn't get that funded. I don't know if the current management would have such a generous test program planned.

An interesting cost point is that the estimated project cost for the 3rd runway at London Heathrow is £14Bn, roughly $18.6Bn.

I don't see why that's relevant. Building a runway is a solved problem, and there is demonstrable demand. An interest point is REL have been fishing for that big 10, 12, 15, 20 billion funding for 20 years.

I would expect at some point during [the test] process there would be some end user sales. I would also expect the consortium would have accumulated data necessary for leasing companies to make a decision by then.

I'm sure they would make some sales [of launches], but I doubt they would make more than 20 sales [of launches] a year, I doubt they could give away 50 launches a year.

You need to stop thinking of Skylon as an ELV.  You seem to be equating sales of the vehicle with actual launches. That implies a production rate like an ELV (or a semi ELV, which is much the same).
In practice I'd expect the Skylon mfg company (SKYLON Holdings? or whatever it's called) to mfg more like 2-4 a year and let the customers decide how many times they launch payloads.

When discussing if there was a market for an extra 90 launches a year, it appeared to me you suggested that some of the 200 test launches might be sold, thus providing data. If that's not what you meant, if they didn't sell a significant number of launches, how would leasing companies be able to gauge the demand for launches and thus make a judgement on the likelihood of a leaseholder being able to make their payments? If that's not what you meant why did you say "end user sales" not "operator sales" ?

Just like every other mfg of transport systems does it.

Yes, and they do a market study to determine the demand of their proposed transport system, before working out production rates and amortisation of development costs over production run if they are doing it on a commercial basis. This is precisely what REL did in the S-ELSO paper, looking at a number of scenarios.

For a semi or fully expendable LV you're right.
For Skylon a company would go bankrupt and it's fully viable asset IE Skylon is sold off by its creditors.
Giving someone a Skylon at below retail price.

who would then be able to further undercut the remaining operators. As I said, that doesn't end well. You end up with the reputation of Skylon being loss making, just like Concorde.

You're sounding remarkably like a British civil servant of the late 80's/early 90's. They also had that "Skylon is like Concorde" meme. 

Nice strawman and ad hominem.
If they meant a brilliant advance, screwed up by government policy then I'd agree with your assessment.
My point was that despite Concorde not being loss-making, it acquired a reputation for it (because it was in the airlines interest for it to appear so) and it was that which doomed it. (I thought this was common knowledge for anyone with an interest in British aeronautics)

I think Richard Varvill is still pretty weary of it.

And he's right to be wary of government involvement.

Firstly if you're still expecting 20 vehicles a year off the production line you're still thinking in ELV terms.

so you thought I was saying they would manufacture 20 Skylons during the 200 flight test program. Really?

Secondly early adopters will probably price at the going market rate or just below for expendable or semi expendable vehicles.

Well, duh. that's why the 70 million launch cost was used. That's roughly the current F9R price.

If they purchased Skylon for internal use (and offer it to other users as a way of covering their costs) then they may be lower.

Thus making the market even less appealing for commercial operators of Skylon.

At some point those orbital hotels and factories start to make financial sense. Buying a Skylon just to support them becomes an option. Actual consistent scheduled services to space become a reality.

Maybe, maybe not. This boils down to "If you build it they will come."
I believe Skylon is the best route to such an outcome. I believe a direct to Skylon development path is the cheapest and quickest way to get there.
Personally, as I said previously, I think space based solar power is the most likely driver of the market providing enough launches to require enough Skylons to get the launch costs down. Who is going to want to spend a couple of million for a flight to a space hotel for a week or two of bloaty-head, with a 50% change that the first few days are going to be blighted by space sickness, where the food is rubbish and there's nothing to do really except float around and look at the earth moon and stars. Space manufacturing is not going to drive the first wave.

Here's the thing. Skylon can leverage most of the expertise in large aircraft design to reduce failure rates gained over nearly a century of commercial operations, which are roughly 1/100 000 that of LV's (expendable or semi expendable).

You're more optimistic than REL, they have a 1/10,000 LOM goal

There is no comparable body of knowledge for ELV's (because if there were wouldn't they have all started using it by now?) so what is SX going to use to give BFR "airline like" reliability?

How about it not being an ELV, so it can be test-flown, then once in-service inspected and maintained, and results of those processes being fed back into design improvements.

Noise won't be an issue as it won't be operated (except in emergency) from regular airports.

SpaceX get away with sonic booms a few times a month, can you say that will still be the case when there are multiple flights a day?

Fully reusable launch vehicle economics are rather different to either semi or fully expendable LV's.

citation needed

I'd start with Bono & Gatland "Frontiers of Space" but I'd thought the whole "Not throwing away all, or at best half of the vehicle" thing, something no other transport system does, might have been suggestive of a bit of a difference.

And which of those say you don't have to be able to sell enough flights at a high enough cost over the lifetime of the vehicle to pay for it, and make a profit.

For ArianeGroup to decide to go Skylon as their reusability route- which was the original suggestion - they have to be sure it will be built, which means they can't hope for other sales, but they would have to look at the sole-operator case as the worst case example.

That makes absolutely no sense if you're going to manufacture Skylons as a business.

Just to be clear, you accept looking to develop Skylon will not resolve AraineGroup's issue of their flight rate not supporting reusability.

When REL looked at this question they paid to have a market survey done by specialists in the aircraft leasing business. I'd expect SKYLON Holdings would look to see who would be interested in buying a Skylon at what cost, not as single use vehicle with a 1 in 50 failure risk (like an ELV) but as a complete launch system, capable of launching their payloads on their schedule (and depending on their longitude and required payload their home country as well).

Pretty much the same way every other mfg of transport systems does it in fact. 

Funny, airlines and freight haulers tend to lease their vehicles.

which was EXACTLY the 30 Skylon commercial model, which gives Skylon a 1.6 billion Euro price tag.

And a cost model which increases the estimated development cost from $12Bn to $17.7Bn. This sounds very strange. REL missed $5.7Bn of development costs?

it was a much more detailed study of the costs, from a position of more knowledge than the earlier estimate, took into account 10 years of inflation and being audited to make sure things weren't hand waved or missed out. Nobody forced REL to publish these figures.
When have you heard REL use the $12Bn since 2014?

Really? I wonder what the development budget for F9 would have been on this model?

significantly more. But then SpaceX have done nothing new (well, except putting COPVs inside LOX tanks close to the freezing point of oxygen)

An operator needs to sell 3 flights a year at 70 million to make an acceptable to investors 10% profit. With 30 Skylons operating that's 90 launches a year - the current market isn't a third of that. What lease company or investor is going to finance the purchase of the tenth Skylon, let alone the thirtieth?

Funny you should say that. It's been pointed out to me that there 68 orbital launches last year and the number has been steadily climbing.

I assumed the "in Skylon's class" was implicit, 8-17 tonnes to LEO, 3-6 tonnes to GTI.

Again 30 Skylons is the number  after decades of production.
Why are you so intent on this Doomsday, big bang scenario of the market being suddenly saturated with Skylons?

Another strawman:

even if he had other customers at a modest construction rate of two a year would mean he needed to be servicing launch operators dealing in a market of 60 [extra] launches a year by his third year of construction. Skylon does not answer Alain Charmeau's issue with reusability, QED.

Who is going to buy the 10th Skylon when their competitors already have 5 years operating experience, has had the opportunity to retire their infrastructure costs at higher launch prices and so will be able to undercut the new companies costs? There has to be enough launch demand that race to the bottom pricing isn't inevitable.

BTW I'd expected Skylon funding per vehicle to be supplied by customers in stages, like other LV's or other large capital expenditures are paid for.

Oh, so suddenly it's NOT "Just like every other mfg of transport systems "

High launch prices are not a goal. They are a consequence.

actually they are both the goal and consequence of commercial activity. Launch providers charge as much as they can, but if they charge too much they risk encouraging a competitor

  They need to come down a lot so those applications that need high , predictable or consistent launch rates (be they orbital hotels or factories to large crewed missions) can start becoming a reality.

couldn't agree more.

I fear SpaceX have achieved "good enough" to prevent a direct to Skylon development private investment path - without a motivated investor (such as JB with Blue), government backing (e.g Henry the Navigator and caravels) or an anchor payload (possibly stretching, but CSM/LEM for Saturn V)

Why?

They haven't delivered on upper stage recovery or reuse and IRL the BFR is 8-10 years away and it's payload is 7.5x bigger than F9 to LEO.

SpaceX don't need to deliver on upper stage reuse to get their costs down to the point that they could undercut fledgling Skylon operators. They haven't delivered on block 5 reuse levels yet but given there's nothing particularly new it is likely enough they will achieve those that the risk/reward proposition for Skylon is made worse. That BFR is touted as being able to launch for less than Skylon adds enough risk to make the reduced reward insufficient for investment

If SX had delivered what Shotwell was talking about in 2011, a $6m F9 launch then yes I'd agree.

cost or price?

REL had a very strong technology case - although with BFS the known good hardware and downmass USPs are no longer unique; and the number of payload intact abort scenarios increases for BFS too, again eating into a Skylon USP, so the investment case is much weaker.

How so?

As a TSTO BFR aborts assume flawless stage separation and BFS engine ignition, much in the same way Shuttle "aborts" assumed the SRB's would work OK until they ran out of fuel and could be safely separated.

Another strawman. I was very careful to say BFS only reduced the LOM risk, and not as much as Skylon did (and as you seem to be trying to suggest that any LOM scenario invalidates all abort scenarios, I point out all post-rotation Skylon aborts assume neither wing falls off).
As an aside, a flawless separation isn't required, only a sufficient one. I'd be surprised if a det cord (or similar) backup wasn't in place.

Hopefully the new management team will come up with a good business case, but "give us 15 billion so you can try to sell to operators who will have to join in a price war between SpaceX and Blue Origin" isn't a good starting point.

How about "gamble $17Bn (against these legally enforceable and inflation adjusted promises to buy if we deliver a vehicle to the stated specs, which we have already accumulated) that we can deliver Skylon and you will fund what we hope will become the preferred world wide RLV supplier for the 21st century. The space launch equivalent of Boeing or Airbus or Blackburn.

FTFY

I believe BFR is more likely to fly than Skylon be funded on a commercial basis. That still leaves political, strategic and vanity as options.

Interesting use of language.

I don't see what's interesting about it.

The report you seem so keen on quoting

Why wouldn't one use the most detailed and recent cost study REL have worked on?

did not think SKYLON Holdings could be entirely commercially funded but did think Public/Private Partnership could get the job done.

i.e. political
Also note the paper was written three years before SpaceX demonstrated reusability, and two years before Blue Origin, so the reward for the commercial party of the PPP is potentially reduced.

[john smith 19]

I don't see why that's relevant. Building a runway is a solved problem, and there is demonstrable demand. An interest point is REL have been fishing for that big 10, 12, 15, 20 billion funding for 20 years.

It's relevant because large projects can get private funding on a large scale.
Now where did your  numbers for 15 and 20 billion come from, and in what currency were they quoted in?

When discussing if there was a market for an extra 90 launches a year, it appeared to me you suggested that some of the 200 test launches might be sold, thus providing data. If that's not what you meant, if they didn't sell a significant number of launches, how would leasing companies be able to gauge the demand for launches and thus make a judgement on the likelihood of a leaseholder being able to make their payments? If that's not what you meant why did you say "end user sales" not "operator sales" ?

I'm sorry for your confusion. What I meant was vehicle sales, not payload launches. IIRC REL stated they would be interested in partnering with a company for a passenger carriage module in the test programme.
You'd have to ask the leasing companies how they'd work out if this was a business they would want to get into.

Yes, and they do a market study to determine the demand of their proposed transport system, before working out production rates and amortisation of development costs over production run if they are doing it on a commercial basis. This is precisely what REL did in the S-ELSO paper, looking at a number of scenarios.

Actually it wasn't. This study might look that way but it was done soley from the PoV of European  It completely ignored the rest of the world. The "traffic model" which ELV companies obsess endlessly (because the mfg is also the sole operator) makes very little sense in Skylon mfg.

Nice strawman and ad hominem.
If they meant a brilliant advance, screwed up by government policy then I'd agree with your assessment.

Why exactly are you talking about Concorde? Is there a point your'e trying to make?

Secondly early adopters will probably price at the going market rate or just below for expendable or semi expendable vehicles.

Well, duh. that's why the 70 million launch cost was used. That's roughly the current F9R price.
Wrong. IIRC SX are claiming reused F9 booster F9 are at $50m, about 41m Euros.
The question was wheather or not Skylon could continue to compete.and yes it can.

Thus making the market even less appealing for commercial operators of Skylon.

Depends on the level of "Hassle" a company (or government) wants. Does it want to have independent, on demand launch capability, or if they are happy to shop around for an operator, as long as they can find someone to do the job. Launch tonight (assuming they have the payload on hand) or launch a week next Thursday.

Maybe, maybe not. This boils down to "If you build it they will come."

Which is pretty much the argument around SLS and BFR as well. The difference is of course that BFR is currently funded through the NASA Cargo Transport contract. SLS is funded as a government jobs programme. .

You're more optimistic than REL, they have a 1/10,000 LOM goal

The figure I have (from their 2014 update to a group in Northern Ireland) is 5 x10^-5 or 1 in 20 000. REL expect a LOM to be a failure somewhere on the way to orbit where the payload can't be deployed, but can be recovered back to Earth for a second attempt.I'm not sure that's the definition for VTO TSTO's.

How about it not being an ELV, so it can be test-flown, then once in-service inspected and maintained, and results of those processes being fed back into design improvements.

I see, you think VTO TSTO are not inherently unrelaible, it's just no one's been able to diagnose what's wrong with the US design because they've never had one back for study.

But VTO TSTO's have 3 events that have to work or the payload is destroyed. Stage separation, upper stage engine ignition and landling leg deployment. They are all dynamic events that have lots of parts that have to work each time, every time and they cannot be designed out. Any of them fail and the vehicle (and any payload on board) is toast.

SpaceX get away with sonic booms a few times a month, can you say that will still be the case when there are multiple flights a day?

Isn't that a question for SX to answer?

And which of those say you don't have to be able to sell enough flights at a high enough cost over the lifetime of the vehicle to pay for it, and make a profit.

The ones that say you should get first get a large USG contract to bankroll your development plans of course. That should be obvious.
That's how ULA did it with the EELV programme, SX did it in part with Dragon and F9 and will do it mostly with Cargo Transport for BFR.

I find it fascinating how the ELV delopment process has so infected people world view they simply cannot conceive of what a free market in launches would actually look like. where the USG doesn't just have a choice between Boeing and LM (the original plan behind EELV) but half a dozen?

Are you still thinking of 20 or more Skylons a year rolling off the prodution line to flood the market? You really need to get that idea out of your head. 

Just to be clear, you accept looking to develop Skylon will not resolve AraineGroup's issue of their flight rate not supporting reusability.

Isn't Arianegroup the manufacturer and Arianespace the launch services provider?
Building Skylon would solve that problem. Turning out one or two a year (and maintaining the gradually increasing fleet) should keep the team employed.
Arianespace would then become Europes "National carrier." I could see the French wanting one (independent access) and the British (because they are no longer part of Europe). 

Funny, airlines and freight haulers tend to lease their vehicles.

As I said, REL got a specialist in the aircraft leasing business to look at the market. I would expect them to be quite knowledgable on forecasting.

it was a much more detailed study of the costs, from a position of more knowledge than the earlier estimate, took into account 10 years of inflation and being audited to make sure things weren't hand waved or missed out. Nobody forced REL to publish these figures.

Do you know this for a fact, or are you assuming this to be true?

significantly more. But then SpaceX have done nothing new (well, except putting COPVs inside LOX tanks close to the freezing point of oxygen)

I quite agree. A clue you should treat all cost models with a substantial amount of scepticism.
Neither REL nor SX want to innovate for innovations sake but to reach a goal. Where they differ is in how much innovation they believe is necessary to achieve it.

An operator needs to sell 3 flights a year at 70 million to make an acceptable to investors 10% profit. With 30 Skylons operating that's 90 launches a year - the current market isn't a third of that. What lease company or investor is going to finance the purchase of the tenth Skylon, let alone the thirtieth?

Again you seem to be talking in terms of RLV's but thinking in terms of ELV's. Can you simply not help yourself? You can't understand the difference between a factory productin a couple of RLV's a year versus a factory churning out ELV's to be used once and thrown away?

Again 30 Skylons is the number  after decades of production.
Why are you so intent on this Doomsday, big bang scenario of the market being suddenly saturated with Skylons?

Another strawman:

And this time it's yours. You're starting to sound quite like a troll.
Where are you getting this 30 Skylons from? Why do you think it? IIRC REL were talking about mfg that number over a 10-20 year period, allowing the market to adjust to the increased capability.

even if he had other customers at a modest construction rate of two a year would mean he needed to be servicing launch operators dealing in a market of 60 [extra] launches a year by his third year of construction. Skylon does not answer Alain Charmeau's issue with reusability, QED.

So we are not looking at 30 Skylons made within a year of production starting then?
I hear the sound of goal posts being dug up and moved.

Could you make a point instead of implying it? What is the question?

Who is going to buy the 10th Skylon when their competitors already have 5 years operating experience, has had the opportunity to retire their infrastructure costs at higher launch prices and so will be able to undercut the new companies costs? There has to be enough launch demand that race to the bottom pricing isn't inevitable.

You're other mistake is seeming to assume the launch market is 1 single playing field, despite all evidence that it's not.
I'd expect the later purchasers would be those who've watched others prove Skylon works but want on-demand space access under their control. Skylon gives you a country a LV under their control at a viable price without committing to a massive supply chain and long development programme. It gives them something infinitly better than than they would likely be able to achieve on their own.

BTW I'd expected Skylon funding per vehicle to be supplied by customers in stages, like other LV's or other large capital expenditures are paid for.

Oh, so suddenly it's NOT "Just like every other mfg of transport systems "

Wrong. It's like every other transport system of comparable or bigger size.
You might buy a van outright but by the time you get to an 18 wheeler your'e looking at staged payments of some kind. Freight locomotives, large planes (espeically fleets), large container ships (and even space launches) are all paid for in stages.

They haven't delivered on upper stage recovery or reuse and IRL the BFR is 8-10 years away and it's payload is 7.5x bigger than F9 to LEO.

SpaceX don't need to deliver on upper stage reuse to get their costs down to the point that they could undercut fledgling Skylon operators. They haven't delivered on block 5 reuse levels yet but given there's nothing particularly new it is likely enough they will achieve those that the risk/reward proposition for Skylon is made worse. That BFR is touted as being able to launch for less than Skylon adds enough risk to make the reduced reward insufficient for investment
[/quote]
Skylon operators can do things SX can't, and probably never will.
1) On demand launch. If you own a Skylon you launch on your schedule, not in 6, or 12 or more months time.
2) If you don't and you have several operators you can choose one, based on availabiliity and what level of added value they supply (funny how an actual free market works is it not?)
3) You don't have the USG as a partner due to ITAR restrictions.
For quite a lot of people those are benefits (and many other ELV providers) cannot ever provide.

As for SX's repeated claims they can do something I'll keep waiting for US reuse, just I've been waiting since 2011.

[Cinder]

Wasn't US reuse only a secondary goal in the general architecture chronology, up to complete BFR pivot?
And how long have we been waiting for Skylon to materialize?