Discussion Will the SpaceX push to reusability make ArianeSpace obsolete?

[MattBaker]

Well except Proton.

Proton will always have launch contracts because it's cheaper than SpaceX can ever dream of. Sure, the workers don't get the same wage and the safety standard isn't as high but it's cheap and commercial launches are a business.

 

[Urwumpe]

More important is the question: Will Arianespace launch less oftem than its production capacity. Currently, all remaining flights of the Ariane 5 are booked and increasing the production is a very expensive and politically very complicated thing. Arianespace just orded 18 more Ariane 5 ECA for flights starting in 2017. The 55 Ariane 5 ECA that are already ordered in history are reserved already until that moment. That means: 41 Ariane 5 ECA have already launched, 14 more can launch until the new batch of 18 arrives - thats 4-5 launches per year.

(And it took 2 years until the contract for the next 35 Ariane 5 ECA had been signed in 2009, because of the failure of the first Ariane 5 ECA)

What SpaceX could do better than Arianespace, is react to market changes - but I don't see it yet. Arianespace and Airbus S&D react to any changes in the launch market with glacial velocity. They can't be faster, since building a new factory for rockets is a huge investment.

Now how many launchers could SpaceX produce with its factory now? When will SpaceX need a new factory for not loosing contracts to other companies with capacity one day? SpaceX is currently far away from having the same size and related problems as Arianespace.


Also, you should put the SpaceX flights into perspective: The flight manifest is still pretty empty. Its mostly flights that don't bring much profit. SpaceX so far received much more NASA money than Arianespace or Airbus Space & Defense received ESA and EU money (Airbus is especially limited there, because of the WTO conflicts with Boeing).

Thus: SpaceX is now an artificially constructed rival, a political construction - nothing better than Arianespace. It was very interesting in its beginning, but now, it would be fair if all launch broadcasts would start like "This broadcast is presented to you by the US tax payer. You made this all possible. Thank you."

 

[MattBaker]

A Long March market is probably also only existent because of the Chinese government. With probabilities >99%. Still it's kept up for commercial launches because...publicity, testing, politics, fun and profit.

I think SpaceX could be seen quite stable at the moment, maybe even really stable with a steady growth. But the moment Congress goes like "Meh, SpaceX gets too much money, budget cuts for all!" is the moment they get in trouble.

As long as the US government pays enough money to SpaceX to keep R&D, flight testing and contracts going it is a player in the satellite launch market. How big is another question. But the moment they puff out? How do you think is the Falcon Heavy financed? By that one SES launch? Yeah, right.

 

[Urwumpe]

As long as the US government pays enough money to SpaceX to keep R&D, flight testing and contracts going it is a player in the satellite launch market. How big is another question. But the moment they puff out? How do you think is the Falcon Heavy financed? By that one SES launch? Yeah, right.

What if Boeing or LMM says: We also want some more of that money, why should SpaceX get any advantage to us? The government is distorting the competition!

 

[Cosmic Penguin]

I guess you guys have never read the NASASpaceflight.com forums....some people are already predicting 10+ SpaceX launches in 2014 (even multiple posts of 20+!), and apparently ULA/ILS/Arianespace are already "trembling with fear" on the footsteps of The Elon...... and mind you it seems that there are more fans from Europeans than Americans!

 

[Urwumpe]

I guess you guys have never read the NASASpaceflight.com forums....some people are already predicting 10+ SpaceX launches in 2014 (even multiple posts of 20+!), and apparently ULA/ILS/Arianespace are already "trembling with fear" on the footsteps of The Elon...... and mind you it seems that there are more fans from Europeans than Americans!

And in one year, we will talk about SpaceX getting sold to Boeing. :lol:

 

[MattBaker]

10 might actually be possible if they can hold onto their schedu...oh. I see.

 

[Zachstar]

.............

Also, you should put the SpaceX flights into perspective: The flight manifest is still pretty empty. Its mostly flights that don't bring much profit. SpaceX so far received much more NASA money than Arianespace or Airbus Space & Defense received ESA and EU money (Airbus is especially limited there, because of the WTO conflicts with Boeing).

Thus: SpaceX is now an artificially constructed rival, a political construction - nothing better than Arianespace. It was very interesting in its beginning, but now, it would be fair if all launch broadcasts would start like "This broadcast is presented to you by the US tax payer. You made this all possible. Thank you."

I think this is a bit unfair in my opinion. While it is true that large amounts of NASA money is involved in the Falcon 9 development. I highly doubt that much is involved in the commercial launches except to pay for any testing involved with the latter crewed launches. And to be frank it is money well spent considering that SpaceX is delivering and keeping people employed at a decent rate. As opposed to paying 60+ million per seat to Russia (Nothing against the Russian people but I would rather my government spend money on American jobs.)

 

[Urwumpe]

I think this is a bit unfair in my opinion. While it is true that large amounts of NASA money is involved in the Falcon 9 development. I highly doubt that much is involved in the commercial launches except to pay for any testing involved with the latter crewed launches.

Thats wrong - the R&D costs are part of the launch costs for the planned number of launches. Usually 100. Since SpaceX is a commercial company by organisation, they can of course be more creative there, like repaying the development costs of the next launcher by the commercial profits of another launcher. But the money must still sum up, either by selling a product or taking a loan.

And to be frank it is money well spent considering that SpaceX is delivering and keeping people employed at a decent rate. As opposed to paying 60+ million per seat to Russia (Nothing against the Russian people but I would rather my government spend money on American jobs.)

How was the phrase: Better late then never.

But still remember the second part of the definition of a service: The goal of a service provider (like a launch service provider) is to offer something better or cheaper, than you can do in-house.

60+ million per seat sounds bad - but how much is a seat in a Dragon allowed to cost before the reduced but reliable service of a Soyuz capsule becomes attractive again?

Thats the constant dilemma in European spaceflight. Germany paid 1.5 billion Euro for two seats in a Space Shuttle once. France cooperated with the USSR and pushed for Hermes, which failed mostly because of German politics. Which one was better in the hindsight?

 

[Mader Levap]

why should SpaceX get any advantage to us? The government is distorting the competition!

You are talking like SpaceX is only space launcher company in world that has business from goverment (and that seems automatically equate to "subsidy", whatever that means).

Thus: SpaceX is now an artificially constructed rival, a political construction - nothing better than Arianespace.

If your only criteria is "having goverment business", then sure. Why I would want to treat this kind of argument seriously is different matter, of course.

How do you think is the Falcon Heavy financed? By that one SES launch? Yeah, right.

Nice goalpost moving. Some time ago I heard from people like you "but but they didn't any commercial launches at all!". Now that they did 2, it suddenly does not count. Funny, that.
I eagerly await another excuse to diss SpaceX after racking up a few more commercial launches. Manifest has about 60% of commercial, BTW. Even if it had 100%, I am sure you would find another reason.

 

[Urwumpe]

You are talking like SpaceX is only space launcher company in world that has business from goverment (and that seems automatically equate to "subsidy", whatever that means).

Subsidies are no normal business relation with a customer, but a direct influence of the government on a market participant.

I am not against subsidies per se (I feel pretty Keynesian), but: If the majority of the risk capital of a development program, is actually government subsidy, that also not has to be repaid (see differences to Airbus or Boeing, which have to repay all subsidies or get badly beaten by the WTO), it is not different to a government program executed by a commercial contractor. The gains and risks are no longer in a fair balance.

The Falcon 9 is literally implanted by the US government via NASA into the market now. Good for SpaceX. Bad for the competition including Boeing and Lockheed Martin - you can be sure that they are NOT happy at all, but forced by basic diplomacy (Never let your customer look bad) to accept it silently.

But you can also be sure, that the Empire will strike back.

If your only criteria is "having goverment business", then sure. Why I would want to treat this kind of argument seriously is different matter, of course.

See above. You sure don't need to take it seriously. But then, you will get your pocket emptied by really good thieves. Maybe you are not affected by SpaceX - but there are many such dealings that are essentially official corruption. Pork barrel contracts.

Nice goalpost moving. Some time ago I heard from people like you "but but they didn't any commercial launches at all!". Now that they did 2, it suddenly does not count. Funny, that.

Two initial customer launches - both actually already sold for the 1.0 version of the Falcon 9, but shoved way back in time. Funny, that.

Orbital just did their second flight to the ISS - where is the "Oh my god, I want to be a Orbital Sciences Fan Boy" crowd?

Maybe the CEO of Orbital should get a Twitter account and promise antigravity by 2018.

I eagerly await another excuse to diss SpaceX after racking up a few more commercial launches. Manifest has about 60% of commercial, BTW. Even if it had 100%, I am sure you would find another reason.

No, if it would be 100% commercial and not just the first-customer contracts, and really achieved "Without a cent of taxes", it would be epic.

But that will not happen. SpaceX wants the US Gov contracts for further getting the "gold plated toilet paper" situation of high profit margins for selected customers. They turned into the evil that they wanted to fight in the beginning.

And that is what I experience as REALLY disappointing. As great as it started, with a huge amount of pride and enthusiasm, today 285 million US citizens pay for SpaceX not completely missing their own self-stated goals. Is that really in the best interests for the US citizens?

And of course, the recents developments are a threat to Europe as well: We have to keep parity. Arianespace so far successfully managed to run on pretty limited and finite subsidies, much more economic than the EELV program of the USA or the Russian, Indian and Chinese space programs. And with some good business relations to Japan, who are now in the same situation. The market share of Arianespace is in no relation to the subsidies, but the result of many favorable factors and a lot of bad luck for the competitors. And now, SpaceX is inflated without even having to fight for the ISS contracts.

Of course, it means: Either we also change EU laws and allow paying Airbus and Arianespace money beyond what ESA programs and general EU programs for the aerospace industry allow. Or we create our own tax-inflated SpaceX. But we are forced to react somehow. We could be without our own access to space otherwise.

If Russia, USA, India and China nationalize the satellite launch competition and interfere with the market, we can't keep the Ariane operations alive without paying much more subsidies. We would have to pay for the operational costs of it, and we would have to pay subsidies for satellite companies to "fly european".

And instead of getting to a real commercial and market-oriented spaceflight, we would get the real horror: much worse nationalism, much more subsidies, much less competition, much higher costs. Like during most of the cold war.

And that just because of the pork barrel addiction, that the USA refused to disarm when it was possible by commercializing spaceflight.

If the USA would have done that consequently with the acceptance of failures along the way, with SpaceX staying a real "blue ocean market" company in a newly created market, we would really be celebrating now. Not the successes of SpaceX, but the successes of many people and companies who risked investments and won the profits. Maybe including SpaceX, maybe not. Who really knows what would have happened in the last 10 years then.

Alone that the USA plan to commercialize spaceflight, but increased the ITAR restrictions beyond sanity was one typical example of how inconsequent the implementation of the market really was, since this means that trading most rocket components is only possible under tight government control even if you just have business with another US company. You could be installing RL-10 engines in a washing machine and export it as whiteware to Cuba.

Damn, what a long posting. So, a quick

TL;DR: SpaceX is commercial spaceflight business by name only. Without NASA, it would look completely different today.

 

[MattBaker]

Nice goalpost moving. Some time ago I heard from people like you "but but they didn't any commercial launches at all!". Now that they did 2, it suddenly does not count. Funny, that.

Context. While I didn't quote anyone because full quotes under the exact post you're quoting are...getting weird-ish it should be obvious that I responded to Urwumpe, who argued "Every launch service provider only existent due to a government will run into trouble when it expands". (If I didn't understood that correctly, my bad.)

My argument was that as long as Congress is willing to pay for it with programs like CTOS, CCDev, CCiCap etc. SpaceX will play a role into the satellite launch market and can dream big about stuff like a Falcon Heavy, a bigger engine etc.
But the very moment Congress goes like "I hate commercial spaceflight!" - "You're Republican, aren't you pro-business?" - "I hate commercial spaceflight!" SpaceX's money is only the satellite market and possibly cargo flights to the ISS. And financing projects like a Falcon Heavy, a reusable Falcon 9, something even bigger to go to Mars etc. is hardly possible with that. Especially if you are the one who wants to be cheaper than anyone else but still would like to earn money.
R&D costs money, more than you like.

tl;dr: The moment Congress pulls out SpaceX will have major trouble in developing new stuff and might not be able to keep its prices as low as currently.

 

[Urwumpe]

Context. While I didn't quote anyone because full quotes under the exact post you're quoting are...getting weird-ish it should be obvious that I responded to Urwumpe, who argued "Every launch service provider only existent due to a government will run into trouble when it expands". (If I didn't understood that correctly, my bad.)

Not exactly what I meant to say: The problem with expansion in spaceflight is, that behind every vehicle that you produce, you have a VERY large chain of integration steps, factories and suppliers.

SpaceX follows NASAs "Not invented here" attitude, developing almost everything in-house, even components that have already commercial available products and which SpaceX does not develop better or cheaper than the competition.

This means: Once SpaceX has to expand production rates, it has to expand internally. It needs new assembly lines, new factories. This is really expensive and all lands in SpaceX responsibility. SpaceX can't just order more engines per year, it has to build more engines every year then.

That has now nothing to do with the government contracts, but with the NASA-like attitude, that SpaceX adapted. It helps finding government contracts, if you have the same mindset as your government customer.

That is also the same kind of problem that troubles ESA, Airbus and Arianespace. Arianespace has to order launchers from Airbus and unless Arianespace orders seriously more launchers, it is too risky for Airbus to start a new assembly line.

But thats no commercial attitude: Volkswagen for example does not go any tell you "You will have to wait for six years until we can deliver your car, we can't afford producing more of the most popular engine that you ordered". They will deliver - maybe with months delay, but they will, because their production and car design is commercially oriented. They can reconfigure assembly lines for reacting to changing demands, have reserves to reach even optimistic sales estimates.

If Volkswagen sells 10% more cars than planned, it is a really lucky year for Volkswagen. If Arianespace or SpaceX have to launch one rocket more in a year than planned, they will suffer in agony.

And contrary to Arianespace, SpaceX promised exactly that: You sign the contract for the launch and a few weeks later we will launch. As long as SpaceX produces more launch vehicles than it has already sold, this works. But once the factory is running at capacity, the SpaceX organisation will get as expensive as if Arianespace would try the same stunt.

And that is what I criticized - instead of mitigating the risks in their strategy and having alternative opportunities, SpaceX lets NASA pay their weaknesses.

My argument was that as long as Congress is willing to pay for it with programs like CTOS, CCDev, CCiCap etc. SpaceX will play a role into the satellite launch market and can dream big about stuff like a Falcon Heavy, a bigger engine etc.
But the very moment Congress goes like "I hate commercial spaceflight!" - "You're Republican, aren't you pro-business?" - "I hate commercial spaceflight!" SpaceX's money is only the satellite market and possibly cargo flights to the ISS. And financing projects like a Falcon Heavy, a reusable Falcon 9, something even bigger to go to Mars etc. is hardly possible with that. Especially if you are the one who wants to be cheaper than anyone else but still would like to earn money.
R&D costs money, more than you like.

Even more: SpaceX future depends on further NASA subsidies. Even the Falcon Heavy will not get the needed funding, if the Falcon 9 is not making quickly boatloads of profits.

The Falcon 9 pays the Falcon Heavy development and SpaceX operations in a commercial world. You can take loans for the development, but the operations have to be financed. If you only make 5 million USD profits every launch (after paying the operational costs), developing the Falcon Heavy would take centuries without loans - and still decades with 80% loan based funding. And you would then need to repay the loan - either by the Falcon Heavy launching often and with a higher price for the first numbers, or by the Falcon 9 having repaid itself and covering both its and the Falcon Heavy operations then.

Without government programs to launch, the Falcon Heavy would likely be too large for the market.

 

[Einion Yrth]

Of course if you can use the subsidy money to undercut your competitors, potentially driving them to the wall then you can charge what you like when the subsidy dries up.

Just a thought.

 

[Urwumpe]

Of course if you can use the subsidy money to undercut your competitors, potentially driving them to the wall then you can charge what you like when the subsidy dries up.

Just a thought.

Exactly that - its the same situation as we have in Europe with Chinese solar cells. European producers have to follow pollution laws, pay higher wages and taxes - but still use better tools and invest in R&D to keep the costs low. Chinese producers simply get money from their government to undercut European companies and avoid any R&D needed for such unimportant stuff like better production lines or avoiding pollution.

In a perfect world, this would not be a problem, since the subsidies you can pay are limited. In the real world, you only need to pay the subsidies long enough to kill the competition. Who can afford most subsidies wins.

 

[RGClark]

...
Orbital just did their second flight to the ISS - where is the "Oh my god, I want to be a Orbital Sciences Fan Boy" crowd?

Actually, I am a "fanboy" of Orbital Sciences. More precisely of the commercial space program. That Orbital Sciences like SpaceX was able to cut development costs by an order of magnitude, shows commercial space is the means by which we can make spaceflight affordable.

Bob Clark

 

[Urwumpe]

That Orbital Sciences like SpaceX was able to cut development costs by an order of magnitude, shows commercial space is the means by which we can make spaceflight affordable.

And that is the fallacy again - Orbital Sciences did never claim to "cut development costs by an order of magnitude". They even reported absolutely normal R&D costs for a project of that magnitude. They did an absolutely perfect design-to-spec.

And that is the trick: They used proper specifications and stuck to them. They didn't redesign the launcher every other day, cooperated with suppliers to mitigate the development risk, while being a reliable customer with the constant specifications. Also they kept development tasks, work packages and iterations small, which further reduced the technological risk, and made heavy use of the skills and experiences of their contractors (First stage structure is improved version of Zenit first stage)

That is nothing that a government provider can't do* and as you can follow with SpaceX, also something that a private company can fail to follow (Since the Falcon 9 had seen many redesigns and specification changes in its 7-11 years of development, which sure as hell wasn't cheap), sometimes for a good reason (SpaceX: Company strategy changed) sometimes completely unreasonable (See: Limburg bishop seat)

If you assume that all government projects are overly expensive in development and exceed the best case cost frame to the worst thinkable case, you are right. But that assumption is wrong. While many very large and thus extremely visible public projects fail more often than usual to meet their targets, they are not representative.

The number, that 69% of all projects (private and public) fail to meet their initial goals has not yet changed. Even if it is just by a few days because of bad weather or a few Euros because you needed to buy some new ink cartridges. It happens, and it happens mostly [ame="http://en.wikipedia.org/wiki/Optimism_bias"]by human psychology[/ame].

If a project needs 4 times more money and time as estimated in its earliest feasibility estimate, it is still actually a very normal number. Because you also can have projects that had been estimated 4 times too pessimistic as well by then. The trick is to exploit the much faster subprojects or work packages during the regular reviews to compensate delays and escalate problems ASAP to reduce the delays.

TL;DR: No order of magnitude, no exceptional R&D, just a very good managed project by a company with lots of experience in managing such projects.

*Actually, the project management process was developed during the Dynasoar program by the Airforce and matured over the years in many industries, including spaceflight.

 

[Mader Levap]

I will focus only on most important tidbits, as you write decidedly too much to take care of everything.

Subsidies are no normal business relation with a customer, but a direct influence of the government on a market participant. (...)

I will argue every launch provider does business with goverment and charges it more (if only for mountain of red tape). In other word, banning SpaceX from doing business with goverment would be unfair DISadvantage for SpaceX. Of course, it is reason why you argue for exactly that.

Is that really in the best interests for the US citizens?

Yes. They are cheaper than alternatives avaliable to USA goverment.

Arianespace so far successfully managed to run on pretty limited and finite subsidies... The market share of Arianespace is in no relation to the subsidies, but the result of many favorable factors and a lot of bad luck for the competitors.

Excuses and downplay of subsidies given to company not named SpaceX noted.

And now, SpaceX is inflated without even having to fight for the ISS contracts.

"having to fight"? Do you know that they had to compete for [ame="http://en.wikipedia.org/wiki/Commercial_Resupply_Services"]CRS[/ame] and [ame="http://en.wikipedia.org/wiki/Commercial_Orbital_Transportation_Services"]COTS[/ame]? I start to think you do not know what you are talking about. Yeah, I'm slow.

TL;DR: SpaceX is commercial spaceflight business by name only.

False. Or, alternatively, there is no "commercial spaceflight business" existing anywhere in world according to your definition.

 

[kamaz]

*Actually, the project management process was developed during the Dynasoar program by the Airforce and matured over the years in many industries, including spaceflight.

Citation on that would be appreciated. I happen to be interested in project management techniques for professional reasons.

 

[Urwumpe]

I will argue every launch provider does business with goverment and charges it more (if only for mountain of red tape). In other word, banning SpaceX from doing business with goverment would be unfair DISadvantage for SpaceX. Of course, it is reason why you argue for exactly that.

Sorry, but that is neither what I have written, nor a summary of ANY of my posts.

I am talking about subsidies. Not price authority. If the company sets a price and the government pays the price - complain about the government violating contracting rules, but you can't blame the company for it.

I am talking of US government directly pushing 800 million USD into SpaceX as subsidies under various programs without any relation to a service provided by SpaceX beyond SpaceX existing. Not even for "milestone payments for launch services offered" - as unusual as they are, since this literally means that SpaceX received more for development milestones for each launch than it claims to cost commercial customers.

Also, you can calculate the true launch costs that SpaceX takes from the few key performance indicators of the company:

SpaceX accumulated $4 billion for 40 launches. Thats $100 million per launch. SpaceX does not yet have that money, but they can act as if they will have it one day.

---------- Post added at 07:42 PM ---------- Previous post was at 07:32 PM ----------

Citation on that would be appreciated. I happen to be interested in project management techniques for professional reasons.

Have the heritage in lecture notes, can search for the citation. What I remember from the back of my head, the restructuring of the Dyna-soar program by the Airforce Special Projects Office was the first example of the modern project management.