A Business Case For Falcon 9?
The way to make a small fortune in space launch is to start out with a large fortune.
--Elon Musk
The founder of SpaceX, Elon Musk, is very familiar with the chances for financial success in the field of space launch. With that being said, it should be noted that Mr. Musk is a true believer in the cause of spaceflight and in making mankind into a spacefaring civilization. If he believed that he'd get rich off the effort, he'd be deluding himself.
Nevertheless, I'm still a bit confused as to why he'd want to compete his Falcon 9 against EELV's like Atlas V and Delta IV. It would appear that, with a government-sanctioned, government-subsidized monopoly in this class of launchers, there's no substantial market that could justify the development of yet-another EELV.
It was suggested to me that SpaceX could make inroads into the EELV market if they could deliver a significantly-cheaper rocket. Certainly this will be possible if SpaceX can keep their company small and their management lean. SpaceX knows that the market can't justify the production of 15 EELV's per year, so they probably won't build a Falcon 9 plant that's anywhere near as big as the Decatur, AL plant owned by United Launch Alliance. SpaceX is currently a lean company with lean management, but that may change as SpaceX gets closer to launching a successful orbital mission. If you want to do business with the government, you've got to play by their rules. And that probably means you'll need scores more employees to cut through the bureaucracy.
In terms of engineering their rocket, I think SpaceX could achieve cost savings over Atlas V and Delta IV. The tankage on both stages is similar. The propellants used by both stages are the same (the alleged cost savings of this design choice led to the hydrogen-fueled first stage on the Delta IV.) There's only one engine design used, and the first stage uses a cluster of these smaller, cheaper engines instead of one large, expensive engine.
I'm making a big assumption by believing that nine Merlins are cheaper than one RS-68 or RD-180. After all, RD-180 is built in Russia where labor rates are much lower than in the US. But I also believe that Merlin costs will drop dramatically as a result of bulk production. Even the smallest Falcon 9 needs ten Merlins in order to achieve orbit (nine on stage 1 and one on stage 2.) Even if only four Falcon 9's are launched in a given year, it represents forty Merlin engines being produced. Can you imagine Pratt & Whitney-Rocketdyne producing forty engines, let alone engines of the same type, during the course of a year? Certainly not in today's market for space launch.
Ultimately, the economic success or failure of Falcon 9 hinges on the Dragon capsule. If SpaceX can grow the EELV market with flights to the ISS, flights to a Bigelow space station, and even free-flying space tourist flights, they may be able to launch enough rockets per year to turn a profit. Without manned spaceflight, I think the market for Falcon 9 looks pretty dim.
--Elon Musk
The founder of SpaceX, Elon Musk, is very familiar with the chances for financial success in the field of space launch. With that being said, it should be noted that Mr. Musk is a true believer in the cause of spaceflight and in making mankind into a spacefaring civilization. If he believed that he'd get rich off the effort, he'd be deluding himself.
Nevertheless, I'm still a bit confused as to why he'd want to compete his Falcon 9 against EELV's like Atlas V and Delta IV. It would appear that, with a government-sanctioned, government-subsidized monopoly in this class of launchers, there's no substantial market that could justify the development of yet-another EELV.
It was suggested to me that SpaceX could make inroads into the EELV market if they could deliver a significantly-cheaper rocket. Certainly this will be possible if SpaceX can keep their company small and their management lean. SpaceX knows that the market can't justify the production of 15 EELV's per year, so they probably won't build a Falcon 9 plant that's anywhere near as big as the Decatur, AL plant owned by United Launch Alliance. SpaceX is currently a lean company with lean management, but that may change as SpaceX gets closer to launching a successful orbital mission. If you want to do business with the government, you've got to play by their rules. And that probably means you'll need scores more employees to cut through the bureaucracy.
In terms of engineering their rocket, I think SpaceX could achieve cost savings over Atlas V and Delta IV. The tankage on both stages is similar. The propellants used by both stages are the same (the alleged cost savings of this design choice led to the hydrogen-fueled first stage on the Delta IV.) There's only one engine design used, and the first stage uses a cluster of these smaller, cheaper engines instead of one large, expensive engine.
I'm making a big assumption by believing that nine Merlins are cheaper than one RS-68 or RD-180. After all, RD-180 is built in Russia where labor rates are much lower than in the US. But I also believe that Merlin costs will drop dramatically as a result of bulk production. Even the smallest Falcon 9 needs ten Merlins in order to achieve orbit (nine on stage 1 and one on stage 2.) Even if only four Falcon 9's are launched in a given year, it represents forty Merlin engines being produced. Can you imagine Pratt & Whitney-Rocketdyne producing forty engines, let alone engines of the same type, during the course of a year? Certainly not in today's market for space launch.
Ultimately, the economic success or failure of Falcon 9 hinges on the Dragon capsule. If SpaceX can grow the EELV market with flights to the ISS, flights to a Bigelow space station, and even free-flying space tourist flights, they may be able to launch enough rockets per year to turn a profit. Without manned spaceflight, I think the market for Falcon 9 looks pretty dim.
posted by Mr. X at
5:41 PM
