Bigelow Aerospace Sets a Business Trajectory

[DigitalMan]

Its rather obvious from the article at spaceref.com that he not only isn't building a space hotel but he's irritated by the suggestion.  Do you have any comments about the preview of his plan so far?

The biggest current mystery I think is his current source(s) of income.  As far as attracting paying customers, the indications are the entire reason for launcing three different stations is because potential customers have different needs and want it that way. So, surely he already has the beginnings of a pipeline underway.

[DigitalMan]

You're skipping an important part of the plan:  the insurance.  It could generate a fair amount of revenue.  Additionally, he plans to charge a profit/overhead fee separate from the launch costs.  

I don't think it's entirely reasonable to gauge corporate/governmental interest in on-orbit research based on existing experience with NASA opportunities.

[Stephan]

3 outposts in 2015, each about 835 m3 (2 BA-330 and 1 Sundacer), 12 flights a year as soon as 2012, 3 flights a month in 2016, that's quite impressive or completely crazy ...

[mr.columbus]

HIP2BSQRE - 7/4/2007  11:51 AM

I disgree with your business case math....

Now you have 1  customer paying $20 milion for 1 week stay at the station.  Remember now, the limit factor at the ISS is the amount of space that they have and the launch vichices to get there.


FUTURE (2016):

3 space complexes+.

1 complex( 2 Bigalow modules) can hold up to 12 people+
Therefore 2 complex can hold up 24+ people/month in space.  I am assuming the other one strictly for protein growth with no people.
There are 12 months in a year => leads to appprox 24 x12 space weeks available =288 space week aviable.  


If profits can be made at $700 million/yr.  Then each has to make $700million\288 space weeks less than 3 million dollars per space\week.
Lets assume total cost are $1.4 billion per year (incleded profit).  
1.4 billion \288 space weeks available =
To break-even, I need to make revenue to be $5 million\space week.  That is a factor of 4 reduction in revenue price\week from the present $20 million a week people are paying.   I think that you will find tons of people\corporations willing to pay this price per month.

Lets go out another 2 years and assuming Bigalow decides to add to 2 new complexs.

Now I have 4 complexs can hold up to 48 people/month in space.  There are 12 months in year.  Therefore there are approx 550 people weeks availble for occupancy.

Assume revenue of 5 million\space week = $2.75 billion.  (Occupancy factor = 100 percent).  
Unless your costs are higher than that...I am going to make a ton of money that year... Also with resulable vichicles, total cost per person week will be going down.  Additionly with the amount of flights been made by expanables their cost would be going down, since now instead of building 1-2 Delta\Atlas heavy per year, I may now be building 20+ rockets.

First, I don't quite follow your math, you have a presumption that any space station can only be manned one week a month as far as your math suggests... But I would rather go into this statement of yours " I think that you will find tons of people\corporations willing to pay this price per month." because the opposite of that was exactly the point I was making:

You cannot find more than a low single digit number of people a year paying 20 million USD for a flight to LEO, regardless if this flight is a week, a month or three months long. The statement in question that needs to be analysed is whether it is possible to find hundreds of people (either sponsored by corporations, governmental agencies or through their own private wealth) who would either pay 20 million USD per flight or as you put it pay 5 million USD per space week to make Bigelow's space station business plan profitable. As I stated above, I do not think this is the case - especially in light of the current situation in space tourism, what space agencies around the world are willing to pay on human spaceflight today and the fact that all commercial endeavours for human spaceflight (other than space tourism and small amounts of money made by advertising) have failed up to this point.

*What we know today is that you cannot find many whealthy space tourists a year for 20 million USD for a trip to the ISS. Even if you prolong the stay in orbit (you suggest 5 millions per week, which would mean to a month for the 20 million trip), shorten the training time, as long as the whole trip costs about 20 million USD (which I outlined is a very low amount to be paid for the trip regardless of its length), you will have a maximum of 2-5 people putting the money down for a trip to LEO. That's what we can see right now from Space Adventures and the amount of people interested in ISS flights with Soyuz.

*Is NASA going to pay hundreds of millions to use Bigelow's space stations? If you say yes, I would like to hear a good reason for that, because right now I don't see why they should. The research done on the ISS is minimal today and the reason for building and keeping the ISS alive is not primarily science done in LEO. Even if they would use the services Bigelow offers, I doubt they would be willing to pay a large part of the amount necessary to have Bigelow operate profiably (over 2 billion USD a year with 30 flights per year as outlined above). How could they justify paying Bigelow, if not by the research done on those stations? - and exactly that is what LEO spaceflights lack to show today, that the research done by humans in LEO is sufficient to pay a lot of money for it each year.
 
*What other governmental space agency would pay for a trip to a Bigelow space stations, except for national propaganda in flying their first national into space? And if they would pay for it, what other space agencies would be willing to pay a large portion of what Bigelow needs. For instance ESA finds it rather hard to pay cash (out of policitical reasons) to the Russians for Soyuz flights and try to reach other deals with the Russians for seats on Soyuz in order not to pay the 10-20 million per seat. Their flight rate to the ISS on Soyuz is just 1-2 per year and they are the second largest space agency worldwide... so how to find governmental agencies that would put down the money for regular flights to a Bigelow space station?

*What corporations have enough money to spend 5 millions on one person in a LEO space station per week with only a rather limited scientific output? Would, for instance, a pharma-company put that amount of money down? Not very likely, considering the risk that no exploitable result may come out of such a research investment. Just consider that a 3 person research team is staying 3 months on orbit for 3 million per week. That would cost a company 100 million. I don't see a single company willing to spend that amount, unless there is a likely profit to be made from that investment - considering 35 years of research on space stations (salyut, skylab, mir, iss) we know FOR A FACT that you can't make 100 million out of research done on a space station.

To sum up, the current costs per person to LEO or as you put it the costs per week in space are just too high for a business to develop. Lower the costs to 1 million per week in space or 1-5 million per trip to LEO and I think you are in business. Unfortunately that is at least a factor of 5 away from reality.

[DigitalMan]

mr.columbus - 8/4/2007  8:36 AM

You cannot find more than a low single digit number of people a year paying 20 million USD for a flight to LEO, regardless if this flight is a week, a month or three months long. The statement in question that needs to be analysed is whether it is possible to find hundreds of people (either sponsored by corporations, governmental agencies or through their own private wealth) who would either pay 20 million USD per flight or as you put it pay 5 million USD per space week to make Bigelow's space station business plan profitable. As I stated above, I do not think this is the case - especially in light of the current situation in space tourism, what space agencies around the world are willing to pay on human spaceflight today and the fact that all commercial endeavours for human spaceflight (other than space tourism and small amounts of money made by advertising) have failed up to this point.

*What we know today is that you cannot find many whealthy space tourists a year for 20 million USD for a trip to the ISS. Even if you prolong the stay in orbit (you suggest 5 millions per week, which would mean to a month for the 20 million trip), shorten the training time, as long as the whole trip costs about 20 million USD (which I outlined is a very low amount to be paid for the trip regardless of its length), you will have a maximum of 2-5 people putting the money down for a trip to LEO. That's what we can see right now from Space Adventures and the amount of people interested in ISS flights with Soyuz.  

You haven't indicated how this is relevant to the market Bigelow is targeting.  What is the point of even mentioning the tourist market?

*Is NASA going to pay hundreds of millions to use Bigelow's space stations? If you say yes, I would like to hear a good reason for that, because right now I don't see why they should. The research done on the ISS is minimal today and the reason for building and keeping the ISS alive is not primarily science done in LEO. Even if they would use the services Bigelow offers, I doubt they would be willing to pay a large part of the amount necessary to have Bigelow operate profiably (over 2 billion USD a year with 30 flights per year as outlined above). How could they justify paying Bigelow, if not by the research done on those stations? - and exactly that is what LEO spaceflights lack to show today, that the research done by humans in LEO is sufficient to pay a lot of money for it each year.
 
*What other governmental space agency would pay for a trip to a Bigelow space stations, except for national propaganda in flying their first national into space? And if they would pay for it, what other space agencies would be willing to pay a large portion of what Bigelow needs. For instance ESA finds it rather hard to pay cash (out of policitical reasons) to the Russians for Soyuz flights and try to reach other deals with the Russians for seats on Soyuz in order not to pay the 10-20 million per seat. Their flight rate to the ISS on Soyuz is just 1-2 per year and they are the second largest space agency worldwide... so how to find governmental agencies that would put down the money for regular flights to a Bigelow space station?

Here's a question perhaps someone with actual knowledge can answer: If ESA had the ability to fly to ISS for FREE every month, exactly how much access and research opportunity would they have on ISS in the form it has been to date?

Question 2: What are the criteria and constraints for research opportunities for ISS?

Question 3: What are the probabilities you would actually be able to see your research through to completion on ISS?  

Since "Space Station research is being realigned to directly support the Vision for Space Exploration", according to NASA/OMB, surely this will have a limiting effect on the type of research that is possible on ISS, at least through NASA channels.

*What corporations have enough money to spend 5 millions on one person in a LEO space station per week with only a rather limited scientific output? Would, for instance, a pharma-company put that amount of money down? Not very likely, considering the risk that no exploitable result may come out of such a research investment. Just consider that a 3 person research team is staying 3 months on orbit for 3 million per week. That would cost a company 100 million. I don't see a single company willing to spend that amount, unless there is a likely profit to be made from that investment - considering 35 years of research on space stations (salyut, skylab, mir, iss) we know FOR A FACT that you can't make 100 million out of research done on a space station.

To sum up, the current costs per person to LEO or as you put it the costs per week in space are just too high for a business to develop. Lower the costs to 1 million per week in space or 1-5 million per trip to LEO and I think you are in business. Unfortunately that is at least a factor of 5 away from reality.

Clearly from the articles to date, Bigelow indicates that access to orbit is his biggest worry.  Fortunately it looks like there could be more choices for getting into LEO.  But how exactly can you know that research can only have limited scientific output?  Why would people necessarily need to stay aboard the station for months?  For some types of research yes but not for others.

It seems to me the major constraint limiting space research today is ISS.  If ISS had been completed already and capability for 6 crew already existed NASA would likely be supporting research on ISS rather well.

[DigitalMan]

That kind of available space completely changes your perspective.  

I think the 12 ( to 16?) flights a year was the maximum.

[mr.columbus]

DigitalMan - 8/4/2007  11:20 AM

You haven't indicated how this is relevant to the market Bigelow is targeting.  What is the point of even mentioning the tourist market?

I mentioned it because space tourism is one of the potential revenue  sources in the market Bigelow Aerospace wants to work in, that is the "human spaceflight market". In fact it is currently the only significant revenue source, with a market value of approximately 40 million USD (2 flights to ISS a year), related to human spaceflight.

Here's a question perhaps someone with actual knowledge can answer: If ESA had the ability to fly to ISS for FREE every month, exactly how much access and research opportunity would they have on ISS in the form it has been to date?

ESA's share of the ISS is 51% of Columbus and 8.3% of the rest of the US segment. There are separate agreements for use of the Russian segment. My point mentioning ESA was, that space agencies around the world are reluctant to spend cash for human spaceflight (or anything else relating to spaceflight), if that cash is paid to someone else than their home industry.

Question 2: What are the criteria and constraints for research opportunities for ISS?

The same constraints Salyut, Mir and Skylab had. Microgravity is a unique environment for research, but it is not a goldmine in itself. Therefore 35 years of research in LEO hasn't provided much commercially exploitable research results (however certainly valuable experience in space medicine and valuable experience in long-term stays in space in general etc.).

Question 3: What are the probabilities you would actually be able to see your research through to completion on ISS?  

Rather high, if your research program is actually something new and interesting. Currently, many ISS experiments are things that merely duplicate experiments already run in the past - due to little research funding and more importantly a lack of things that actually make sense to do in space.

 But how exactly can you know that research can only have limited scientific output?

As mentioned above, 35 years of LEO research in various types of space stations do tell us that there has been limited scientific output that is COMMERCIALLY exploitable. I have not said that there is limited scientific output in general - effects of space to the human body, animals or plants can only be examined in space and are important to study.

Why would people necessarily need to stay aboard the station for months?  For some types of research yes but not for others.

I don't know, I did not say anybody needs to stay on a space station for months to do research. In many instances it is not even necessary to have people staying in LEO for experiments at all... which does not really help Bigelow's business model.

It seems to me the major constraint limiting space research today is ISS.  If ISS had been completed already and capability for 6 crew already existed NASA would likely be supporting research on ISS rather well.

If ISS is completed more research will be done. Still, there is no plan up to commercially use ISS  and there aren't really many corporations, who would pay for research on the ISS, which is not due to constraints on it, but rather due to the point I keep mentioning, i.e. while microgravity is an interesting environment to do research in, at current prices, it is just too expensive and what you can do on a space station is just to limited in scope to be of any commercially exploitable nature.

[Chris Bergin]

mr.columbus - 7/4/2007  9:41 AM

*He said 800 passengers over ten years. Oddly enough he said "next ten years", but let's suppose for calculation purposes, that there are 100 paying customers for Bigelow's services a year. In order to have 100 customers fly to his spacestation(s) he would need at least 20 SpaceX crewed Falcon 9/Dragon flights (5 passengers, 2 pilots/Bigelow staff) and another unspecified number of supply flights - let's assume his statement of 3 flights a month is correct and suppose one supply flight per month - 12 a year.

*32 Falcon 9/Dragon flights à 40 million USD (27 for falcon and the rest for Dragon) is 1.28 billion.

If they were all on SpaceX, which they won't. The majority will be on another carrier.

[mr.columbus]

Chris Bergin - 8/4/2007  3:15 PM

mr.columbus - 7/4/2007  9:41 AM

*He said 800 passengers over ten years. Oddly enough he said "next ten years", but let's suppose for calculation purposes, that there are 100 paying customers for Bigelow's services a year. In order to have 100 customers fly to his spacestation(s) he would need at least 20 SpaceX crewed Falcon 9/Dragon flights (5 passengers, 2 pilots/Bigelow staff) and another unspecified number of supply flights - let's assume his statement of 3 flights a month is correct and suppose one supply flight per month - 12 a year.

*32 Falcon 9/Dragon flights à 40 million USD (27 for falcon and the rest for Dragon) is 1.28 billion.

If they were all on SpaceX, which they won't. The majority will be on another carrier.

I just mentioned it as the sake of argument. Other transportation solutions (Atlas 5 etc.) would however not be cheaper in terms of costs per person per flight.

[Danderman]

DigitalMan - 7/4/2007  7:06 PM   The biggest current mystery I think is his current source(s) of income.

Given that Bigelow talks about his $100 million in costs being offset by revenues from the projects, that is indeed a $100 million mystery. There are few space industries outside of comsats which have generated $100 million in revenues to date.

My feeling is that its an accounting trick, that Bigelow Aerospace may have received $$ from another part of the Bigelow financial group, and is calling this transfer "revenue", perhaps Budget Suites put up a placard on Genesis I for $100 million.

 

[josh_simonson]

I believe demand for spaceflight could at least double if the requirements for it were lessened.  Currently people have to spend months training in Russia, learn a new (and relatively useless) language, then they get to go to a space station where there are complex restrictions on what they can do.  

How many multi-millionares have the time and energy to spend doing all that?  Cut the training time down to a week, in english and in a country where they won't fear kidnapping and ransom, and the number of folks willing to do it will go up.  One pretty much has to be retired to fly right now, and the pool of wealthy CEO types that can't jaunt off for 3 months is large compared to people with nothing but money and time.

[Danderman]

Just to save a bunch of further posts along this line:

1) If space travel were cheaper/easier/more frequent more people would fly.

2) Research in space would be more efficient if the infrastructure were cheaper/easier/and access more frequent.

3) If NASA were reformed, things would be better.

4) If private companies succeeded in developing their systems, there would be more space travel and research.

Any other platitudes I missed?

[hyper_snyper]

http://www.flightglobal.com/articles/2007/04/10/213196/bigelow-aerospace-unveils-14.9-million-price-tag-for-four-weeks-at-orbital-complex-from.html

Interesting that the prices include transportation there and back.  But said transportation doesn't exist yet.  I hope this pans out for them but there are still too many variables up in the air.

[Norm Hartnett]

The extended stay neatly cuts launch costs, the 6 crew ties into the LM/Dream Chaser, CEV, or 2 Soyuz capacity. Such a deal $18 million for 8 weeks in space plus one and possibly 2 EVAs, if I had it I would be sending them my deposit today.

$88 million to lease a full module for a year, I wonder how that stacks up to the cost of maintaining a cutting edge lab here on earth. Doesn't discuss manning, supplying, recovering data and product though, probably depends on flight rate.

Hopefully there will be more detailed info later.

[Norm Hartnett]

http://blog.wired.com/wiredscience/2007/04/space_symposium.html not much more info here.

http://www.msnbc.msn.com/id/18046025/ some more interesting tidbits here.

[Norm Hartnett]

"And we'll say, we will set up bases for you. We will lease those bases on the Moon or on Mars, if you can get that far. Let's just say on the Moon. We'll provide the facilities and you won't have to write the check to build them," Bigelow said.

Heh heh, "Houston we have a problem, they want a cash deposit."

[MKremer]

Um, let's not go hog-wild with what might be in the future. Sure, this is a great first step, but everyone needs to remember that from ground to orbit is the most intense/important part - it's hard to maintain positive PR for your product to the general public if you can't even get there to demonstrate it.

IOW, regardless of how their design/implementation works, if they have one or more failures to even get into orbit to demonstrate their capabilities in the next few years, their positive PR and overall investor enthusiasm will take a major hit.

[Christine]

Last time I checked, neither Lockheed Martin nor Starsem seemed to have problems with ground to orbit, and Bigelow was already flying hardware.

[JIS]

Christine - 11/4/2007  8:44 AM

Last time I checked, neither Lockheed Martin nor Starsem seemed to have problems with ground to orbit, and Bigelow was already flying hardware.

Cubesat technology. I'm really looking forward to see the real stuff up there.
But there is no hurry. Its all about timing. Atlas is here but they have to wait for Dream Chaser and for Bigelow habitat. Add couple of years for testing and we get 2015 timeframe...
Orion shuld begin to fly and Soyuz will be free for flights to other destinations. By that time SpaceX could be ready with its Dragon to fly people too.
However, with current costs it is unlikely that the flight rates will be high.

[JIS]

hyper_snyper - 10/4/2007  10:38 PM

http://www.flightglobal.com/articles/2007/04/10/213196/bigelow-aerospace-unveils-14.9-million-price-tag-for-four-weeks-at-orbital-complex-from.html

Interesting that the prices include transportation there and back.  But said transportation doesn't exist yet.  I hope this pans out for them but there are still too many variables up in the air.

$12m per ticket means $72m revenue per month. For this money they have to pay Bigellow module $88m p.a. /12=$7m (including maintenance + ground support + cap expenditure)  + one crew flight + one cargo per 3 crewed flights + crew training. This is based on assumption that all crew are paying costumers.
Using Atlas V it looks like the price per launch should be less than $50m including price of the Dream Chaser. 16 launch per year could be reasonable guess for 12 crewed flights and 4 cargos.
The key would  be to find 72 costumers willing to pay at least $12m for a trip and to get price for Atlas V / Dream Chaser under $50m.
Bigelow himself said that he invested something like $60m for launching one "cubesat grade" module. It could be expected that his total capital investments through 2012 could be few times higher than this (at least $200-300m but possibly much higher) with expected revenues $88m/year. Is it a good business case?  

This for space hotel case only. Research facilities require much more investment to cargo, energy, communication and environment.