Author Topic: United Launch Alliance joint-venture agreement expires  (Read 31524 times)

Offline joek

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Re: United Launch Alliance joint-venture agreement expires
« Reply #120 on: 06/11/2017 10:04 AM »
Customer can pick either option, but theres a clear advantage to all involved by going with the bundled one

Given the current state of the market, no.  Else China and Russia would own the market; there are manifold reasons why that has not happened.

By the same token, are LM or Boeing likely to have an advantage because they now have an "in" with ULA?  Extremely doubtful.

The satellite and launch services markets are simply too different; any purported "synergies" are bogus and the success rate of tying the two together is extremely thin, even with heavy government subsidies.
« Last Edit: 06/11/2017 10:27 AM by joek »

Offline WindnWar

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Re: United Launch Alliance joint-venture agreement expires
« Reply #121 on: 06/11/2017 12:24 PM »
Second, if the satellite provider is contracted to also procure the launch service would they bid a ULA launch and add on $40M/launch (or whatever it is) to their proposal? The satellite contract will likely outweigh the launch portion, so why take the risk of losing the whole thing?

I understand that its already relatively common for satellite manufacturers to offer launch services (not necessarily their own rocket, but they deal with procuring and integrating the payload on behalf of the customer) bundled with the spacecraft. Especially in the case where the satellite provider builds their own rockets, the idea is that they can cut prices to the customer while still remaining profitable (no need to double dip on profits, plus payload integration should be simpler). Boeing could say "we can either sell you a satellite at 80 million dollars, and you can go buy yourself a rocket for like 50 million more... or we can sell you the same bus plus a Vulcan and charge you 100 million for the whole thing". Customer can pick either option, but theres a clear advantage to all involved by going with the bundled one

Given that sats themselves live in a competitive environment, you can't jack up the price of the sat to be high enough to offset that sort of price give away on the launch without risking losing the sat order to Thales or Airbus etc. No one here thinks Vulcan or Atlas costs less than $50 million to build so you'd be losing money on a bundle like that in order to try to pull market share from your competition. And it would only work on your sats, it would have no effect on the sats built by the many other providers. It simply can't work unless you can build a rocket for less than the cost of the competition, in which case you'd win by being cheapest in launch, not because you gave up a chunk of your sat margins to offset your launch cost. As long as both sats and launch are competitive environments you can't bundle like that and succeed. Simply no way to hide the costs without losing money.

Offline deruch

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Re: United Launch Alliance joint-venture agreement expires
« Reply #122 on: 06/12/2017 06:51 PM »
I suppose they could just go to ULA for the purpose of getting more money back to them via ULA, but it seems unlikely. First, most satellite buyers choose to buy their own launch services, so Boeing and LM don't play there.

Second, if the satellite provider is contracted to also procure the launch service would they bid a ULA launch and add on $40M/launch (or whatever it is) to their proposal? The satellite contract will likely outweigh the launch portion, so why take the risk of losing the whole thing?

Trying to assign some malice to Boeing or LM on this expiration just reeks of personal bias.

The consent order only ever covered government programs, not commercial ones.  Defined as: "Covered programs are Government programs which are delivered in orbit and utilize medium-to-heavy launch services."  So, I'm not sure that an analysis based on commercial launch practices is the best basis.     

If that last bit was meant for me, my question was a perfectly straight request for informed opinion.  No malice intended.  I used the language directly from the order. 
« Last Edit: 06/12/2017 06:54 PM by deruch »
Shouldn't reality posts be in "Advanced concepts"?  --Nomadd

Offline baldusi

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Re: United Launch Alliance joint-venture agreement expires
« Reply #123 on: 06/13/2017 01:25 PM »
Nothing will change, now the realities of the launch market dictate that LM and Boeing's satellite business will use whatever LV the customer requests. Price, schedule and reliability are still the same trade off for commercial customers. And USG customers have their own FAR rules. So this changes nothing.
Regarding the incentives, LM and Boeing will not allow ULA to be free. It still is a cash cow, they can't close it down when it isn't (DoD won't allow it), and they won't ever sell it nor spin it off. The most dangerous company to LM/Boeing duopoly in NASA's LV/Spacecraft development contacts is ULA. If there's a company that can stomp over MFSC rockets is ULA. SpaceX/Blue will keep their game to their own.

Offline Chris Bergin

Several members have tried to self moderate (correctly) this thread and people aren't listening, so locking it. Start new threads for SPECIFIC elements to continue relevant conversations.

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