RLV Markets III: Counter-Intuitive Ramifications of RLV Passenger Transportation

One of the most common metrics used in discussing new launch vehicles and particularly RLVs is the price in $/lb delivered to LEO. You almost can’t have a discussion about the Space Shuttle, Saturn V, SpaceX, new commercial RLVs, or almost any other launch vehicle without the discussion at some point talking about the $/lb metric.

Another common discussion item with RLVs is the chicken and egg problem of high flight rates. The logic typically goes something like this: RLVs tend to have more development costs (and hence higher amortization costs) than ELVs. This means that in order to be profitable, they have to fly more often than a comparably sized ELV. Most studies peg the profitability breakeven point somewhere around 30-50 flights per year–though from what I’ve seen most of those assume “black-aluminum” RLVs designed using “black aluminum” development processes. The chicken and egg problem comes from the fact that at that price point, there’s nowhere near 50 payloads per year worth of demand right now especially if you’re focusing on “existing” ELV markets. Most studies indicate that for existing ELV markets, you don’t see hardly any demand elasticity until you get your vehicle’s $/lb to orbit price below $1000/lb.

The problem is, that for a 1st Generation RLV, being able to both get to the point that you can profitably offer a price of $1000/lb, while simultaneously building up a market of 50 flights per year is extremely daunting. While I think there’s no technical reason, with chemical rockets that you couldn’t eventually get down into the $100-500/lb price range, getting anywhere near those prices for 1st Gen commercial RLVs is going to be tough for several reasons:

  1. Regulatory and Insurance Learning Curves: As was pointed out in a paper a few years ago by several of the now Space Cynics, most of the costs associated with an RLV flight are likely going to be things like range costs, insurance costs, regulatory compliance, etc.  While I think many of those costs could be greatly reduced over time, there is going to be a learning curve as groups used to dealing with artillery rockets start understanding that RLVs are different animals, not just ELVs with landing gear.
  2. Technology Maturation: While many of the technologies needed for making a successful RLV are more mature than I think most people appreciate, there still are some areas that are poorly developed.  The biggest one being robust, reusable thermal protection systems, and general reentry/recovery techniques.  There have been lots of research done in these areas, and there are tons of good ideas, but very few of them have ever made it even to bench-tests, let alone actual flight demonstration.  Whenever you’re developing something that has an R&D project involved, the costs and timeline can take a big hit.  Government agencies could help a lot by funding some demos of these sorts, but if they don’t, those costs will have to be amortized by that first vehicle.
  3. Planning for Iterations: A point Monte Davis has made on several occasions is that one of Shuttles key flaws was that they expected the first attempt at an orbital RLV like that to be a fully operational vehicle.  There was no intention ever to treat it as an attempt, fly it a few times to figure out what needs improvement, and then do another RLV development program.  You can see the same attitude with attempts like Kistler’s K-1.  Part of how they blew so much money is that from the start they were building things up to have three operational vehicles, with no plan of iteration in the middle.  Now, this is a discussion for another post, but intentionally designing a vehicle that you know isn’t likely to be fully up to operational snuff doesn’t mean that you can’t make any revenue off of that vehicle.  But in reality you need to budget probably for more than one development program.  And that is going to make developing a 1st Gen RLV a lot more expensive than later RLVs.

There are probably other reasons beyond these, but it is likely true that a 1st Gen commercial orbital RLV is going to struggle to get their costs low enough to be able to make a profit at a $1000/lb nominal price.  It may actually be possible, but it’s also iffy enough that the industry experts any investor is likely to speak with when doing due diligence are likely to scoff at it.  And that is one of the two or three main reasons we don’t see many attempts at funding/building such vehicles (the other two being lack of a big enough demonstrated market, and the high amount of investment that needs to be raised).

All of that however is probably well-known by anyone who has looked at the problem very much.  Here’s where my counter-intuitive observation kicks in.

How Something More Expensive Can Sometimes Be Cheaper

I had been thinking a lot about these things, when a statement in a post by Tom Olsen (which I otherwise agree with a lot of) started the logical chain that led me to my observation.  Tom made the statement that he didn’t believe that $200/lb to LEO with conventional rockets could be profitable.  While I agree wholeheartedly with him for 1st Gen commercial RLVs, I think you could probably approach that number over time, even without magical new propulsion technologies or structural materials (though those wouldn’t hurt).   More importantly, the $200/lb number doesn’t seem really that relevant to me.   You don’t need to get anywhere near that to start seeing new markets appear, and to see the entire way we do things in space start changing.

This got me thinking though about what price you do need to reach before interesting things start happening.  I happened to be just in the middle of trying to write my big ominbus article about people as an RLV market when Tom wrote his article, and that’s when I made my counter-intuitive discovery:  you might not actually have to get the $/lb price of your RLV much cheaper than existing ELVs to be able to offer a per-seat ticket price low enough to reach the elastic part of the passenger spaceflight demand curve.

A long time ago, I wrote a blog article about the part of t/Space’s CE&R study where they did a reanalysis of the Futron space tourism study.  While I have some further thoughts on the implications of that study, suffice it for now to say that they found that demand numbers started getting interesting at a ticket price around $5M.

Now, I don’t personally have a lot of background on crewed vehicle design (since Masten is focusing on unmanned science payloads for the current time), so I don’t know exactly how much “payload mass” you would need per passenger to supply all the services that don’t come standard on a well-designed RLV.  But for argument’s sake, let’s say it comes out to in the 500-1000lb/person range.   The higher number is in-line with Dragon theoretically carrying either 7000lb of cargo or 7 crew (1000/lb per person), as well as HMX’s old AAS concept, which would’ve carried about 4000lb of cargo or 4 crew.  In both cases it looks like the crew capacity may be more limited by volume than by payload mass capacity, which might justify the lower 500/lb per person number.

For a $5M per seat price, assuming a two person vehicle, with one pilot and one paying passenger, that comes out to $2500/lb equivalent cargo price if you need 1000lb per person, and a whopping $5000/lb equivalent cargo price if you need only 500lb/person.  The latter price is actually comparable to the current price of an Atlas V 401 (~$4500/lb), and the former price is still higher than a basic Falcon IX (~$1700/lb depending on what the current numbers are).  So, ironically, an RLV could possibly have a lower ticket price than an ELV + capsule in spite of having a higher nominal price in $/lb for payload.

An interesting thought here is that according to t/Space’s analysis, at $5M per seat ticket prices, you could likely get ~20 passengers per year pretty quickly.  If you only initially need to hit a nominal equivalent price target of $2500-5000/lb, you might be able to make a profit at that point only flying 20 times per year at the $5M ticket price.  That’s a pretty low bar compared to needing to hit $1000/lb and 50+ flights per year.

Now, I may be all wet on this.  500-1000lb per person may be way too low.  $2500/lb may still be too hard for a 1st Gen commercial RLV.  $5M per seat may not actually get you enough demand to close your business case.  And for other cargoes like satellite delivery or propellant, the actual nominal price per pound number is going to be a lot more critical.  But it sure seems interesting, because if I’m not off-base, that may make closing the case for an RLV a lot easier.

So am I all wet on this?  Or is this something that has been obvious to everyone else for a while, and I’m only finally getting this?  Or is this as counter-intuitive to you as it was to me?

[Note: Maybe I’m just misunderstanding them, but I think most of the commenters have misunderstood what my counter-intuitive idea was. It is merely that an RLV that would have far too high of a price per pound to be competitive in the satellite launching business may still be far cheaper for launching people than an ELV with a capsule. I wasn’t trying to make any statements about the specific size of the manned spaceflight market at various price points, the desirability or undesirability of orbital accommodations or anything else. I was just trying to share that observation. We’ll discuss a lot of those other issues in later posts. Patience.]

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Jonathan Goff

Jonathan Goff

President/CEO at Altius Space Machines
Jonathan Goff is a space technologist, inventor, and serial space entrepreneur who created the Selenian Boondocks blog. Jon was a co-founder of Masten Space Systems, and the founder and CEO of Altius Space Machines, a space robotics startup that he sold to Voyager Space in 2019. Jonathan is currently the Product Strategy Lead for the space station startup Gravitics. His family includes his wife, Tiffany, and five boys: Jarom (deceased), Jonathan, James, Peter, and Andrew. Jon has a BS in Manufacturing Engineering (1999) and an MS in Mechanical Engineering (2007) from Brigham Young University, and served an LDS proselytizing mission in Olongapo, Philippines from 2000-2002.
Jonathan Goff

About Jonathan Goff

Jonathan Goff is a space technologist, inventor, and serial space entrepreneur who created the Selenian Boondocks blog. Jon was a co-founder of Masten Space Systems, and the founder and CEO of Altius Space Machines, a space robotics startup that he sold to Voyager Space in 2019. Jonathan is currently the Product Strategy Lead for the space station startup Gravitics. His family includes his wife, Tiffany, and five boys: Jarom (deceased), Jonathan, James, Peter, and Andrew. Jon has a BS in Manufacturing Engineering (1999) and an MS in Mechanical Engineering (2007) from Brigham Young University, and served an LDS proselytizing mission in Olongapo, Philippines from 2000-2002.
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32 Responses to RLV Markets III: Counter-Intuitive Ramifications of RLV Passenger Transportation

  1. MG says:

    It isn’t clear to me how what you are proposing in counterintuitive.

    It is just that until the Russians started selling Soyuz seats, there was no market-pricing mechanism whatsoever. Now we know that there is a market price of low 10’s of millions of dollars for 6 months training + round trip seat + 1 week on ISS.

    Companies like XCor and Virgin Galactic base their business models on guesses at the “price points” for something less than orbital flight.

    My intuition is that the market segments are discontinuous. That is, there is a market for a few minutes of weightlessness in suborbital rides + some trainup and some take-home goodies. There is a market for orbital flight of multiple orbits. There may not be much of a market for (say) a flight that offers 20-30 minutes of weightlessness, with the POSSIBLE exception of point to point service — and that potential market seems quite small to me.

    That suggests to me that one pursues the suborbital ride market to reduce risk — in pricing, in operations (including recover and re-use), and equipment reliability. This is also where lower-cost / risk innovations can be tried. The upper stage(s) might not be reusable, and the “only” uupper stage that is recoverable is the passenger capsule.

    Absent really deep pockets, I don’t see how the orbital market develops without the suborbital market demonstrating proofs of principles.

  2. MG,
    The counterintuitive part to me was that the nominal $/lb price point where flying people starts showing good elasticity is a lot higher than I thought, and that since the RLV carries most of the “capsule” mass as required subsystems, that an RLV that wouldn’t be competitive for say flying satellites might actually be highly competitive for flying people.

    I do agree though that having the suborbital market demonstrate some success will help make things better–I’m just not clear how that relates to the topic of this post.

    ~Jon

  3. Pete Lynn says:

    Interesting. Does the $5 million ticket price assume, say, a week long stay in a space station? What might be a reasonable component ticket price for this?

    Also, if one assumes a base market of say 20 people flights a year at the higher $/lb rate, what might be the marginal $/lb cost of providing non peopled flights beyond this? Is this a market path to higher flight rate and lower cost?

  4. MG says:

    Jon,

    The link to the topic of this post has to do with price elasticity, and finding a real price (with real buyers) vs. pro forma prices based on assumed buyers. We don’t have to speculate quite so much about the nature of the market, and that reduces some of the investment risk.

  5. Jonathan Goff Jonathan Goff says:

    Pete,
    I didn’t assume a weeklong stay at an orbital facility in that price. My point was a bit higher level than that, I was trying to point out an interesting principle. Obviously you’d need to do an actual business/marketing analysis before you could know for sure if the case closes.

    As for whether this would be a path towards higher flight rates, sure. The goal of this exercise was just to show that it might be possible to close the business case even off of a relatively small market with relatively lousy $/lb costs. That’s not saying that you can’t do much better than that, just that even with really conservative assumptions, the case for a small RLV may be closer to closing than most people think.

    ~Jon

  6. Jonathan Goff Jonathan Goff says:

    MG,
    The link to the topic of this post has to do with price elasticity, and finding a real price (with real buyers) vs. pro forma prices based on assumed buyers.

    I’m not sure I follow. Which link are you talking about?

    We don’t have to speculate quite so much about the nature of the market, and that reduces some of the investment risk.

    And yes, there is enough information to go more detailed, but that was beyond the scope of what I was trying to point out here. I was just making a qualitative observation for now. I’ve been focused on engineering enough lately that my actual qualitative business skills have gotten rusty enough that I’d rather leave it to someone who won’t make a fool of himself. I was just trying to draw attention to an interesting observation, so that someone who is more comfortable running the numbers could actually see if you can close anything.

    ~Jon

  7. Clark says:

    Emphasizing MG’s original point, the great thing about the Soyuz space tourism flights is that they give us a price point where the market is non-zero. Prior to Tito et al, there was no way to prove that there would be more than a one-off (or two-off?) purchase of a multi-million dollar ticket. The fact that there are continuing purchases at multi-ten million dollars (plus the training time and effort) is really quite amazing.

    Purchases will clearly grow as ticket prices drop. If there is market elasticity in anything, it is in personal consumption. The catch, of course, is that we need another point to know the slope (assuming linear elasticity to first order) of the market growth vs ticket price. While the market at $5M/ticket would definitely be larger than 1-2 customers per year, whether it would be 10, 20 or 50 customers per year will be the RLV investor’s gamble.

    RLV vehicle developers must try to convince potential investors that space tourism is quite different from the satellite market. The inelasticity of the latter comes from the fact that satellites are one or two steps away from personal consumption. For example, if a new technology could allow DTH TV satellite owners to cut prices by half and keep margins roughly the same, they would seize that technology in a second. They know that their market would greatly expand because of highly predictable price elasticity for personal consumption. But the problem is that even a factor of 5 or 6 reduction in launch costs would only have a modest impact on their overall costs and margins and the price they could offer customers. When they weigh the minimal gain against other risk/cost factors, e.g. having to go to a modular design to be compatible with small 1st gen RLVs, they will probably pass. That is quite different from the case of an individual who sees the price of something he or she wants to do drop by a factor of 5 or 6.

    Eventually Branson and other investors are going to support development of an orbital space tourism system because the market is so obviously there and waiting. I absolutely agree that getting to single digit $M for orbital ticket price is key. (At those prices, other sorts of customers start to appear such as sponsored riders, e.g. Lance Bass and Lori Garver each came close to raising ~$20M in a short time.) There is no need to wait for a vehicle that can offer $100k tickets to orbit. In fact, waiting for it will mean it will never show up.

  8. Axel says:

    Hm, then why not do this business with expendables and lower price due to high flight rate? That would lower developement risk. And why is no one doing this, if it’s such a good idea?

  9. Seer says:

    Jon, when people say $/lb to leo for a rlv, they are normally comparing a rlv booster to an expendable one. In other words, any passenger module carried by the rlv would be counted as part of the “payload”. Also included would be the heavier heatshield, recovery gear etc, to return the more heavily loaded rlv to earth.
    Depending on the size and configuration of the rlv and its passenger module, the cargo or crew might only be half or a third of the rlv’s payload. This doesn’t include any propellant to take the rlv to a space station and back.

    So Falcon 9’s $1700/lb is more like $5000/lb. Atlas V would be ~ $12000. One also has to add the price of the passenger module to that. Even if it is reusable there will be amortization and depreciation costs. There will also be non trivial operating costs: replacing life support consumeables, testing and checking between flights that all the systems work.

    Still you are right that the cost would not be much higher than $5000/lb assuming Falcon 9 figures. But that is still $5 million per ticket. That’s just for orbiting the earth.

    If that led to a $100 million dollar revenue business, it would only make say $25 million profit a year. That’s hardly a significant new market opportunity compared with the existing leo market for satellites.

  10. gravityloss says:

    Seer, I don’t agree. It’s paying payload that practically always counts in these excercises. Otherwise you could have a lower price per kg to orbit if the upper stage was just heavier, even if would cost the same and would lift same size satellites. (It would be lunacy from the customer side to pick a heavier rocket for that reason.)

    Jon, I’m leaving for a few weeks in a few days, keep up the good work and keep propellant depots at a high profile, regarding NASA and all what’s going on at the moment…

    I think the air force or was it the army (or all 3 branches?) and their contractors too thought about RLV:s for space station crew rotation early on but the things were ditched together with the manned stations. You can contact Scott Lowther for more on that part of history, as you probably know…

  11. Pete Lynn says:

    My basic understanding of the point is that an RLV already has many of the systems that otherwise need to be added to an ELV to carry people. And so it is lighter to add the capacity to carry people to an RLV than it is to add the capacity to carry people to an ELV (which requires adding a full separate capsule/people transport).

    So, for an ELV system, if the capsule is combined with the upper stage and made reusable, does this advantage remain?

  12. Seer says:

    Pete, if you think of the shuttle orbiter, it has a crew cabin massing 12 tonnes. This is 12 tonnes that could otherwise go to payload. Actually, even higher amount of payload because the orbiter’s wings, tps and landing gear would be a bit lighter.

    Or to take another example, the delta clipper ssto rlv was meant to be able to take about 9 tonnes to leo (equatorial). Normally, this would be a satellite, but there were plans to include a passenger module inside the payload bay. This would have to mass less than 9 tonnes because it would have to come back with the rlv. And only some fraction of that mass would be passengers/cargo. Most smallish rlv’s are likely to be volume constrained rather than mass constrained when it comes to passengers. I think they suggested 12 passengers. That’s about 1500lb a person.

  13. Anonymous says:

    Jon,

    You are all wet on this, because your analysis on pricing and market is coming from government-oriented studies that were commisioned a decade ago.

    It is not a coincidence that much of the cutting edge development being done in the rocket business is being carried out by information technology entrepreneurs like Musk, Bezos, Carmack, and Greason, because they have a lot more experience in market analysis and product development than people trained in the government-dominated aerospace business.

    The real question is who wants to pay for the RLV that you have the resources to build, and I think that you need to understand how Musk, Bezos, Carmack, and Greason have conducted their similiar analysis for RLVs. Carmack will be testing some extremely impresive RLVs this year that have direct technical traceability to orbital RLVs, and I think that your next post will be even better if you could explain how people like him are successful. Their success with RLVs is not random, and it is not entirely based on the fact that they had made money on previous pursuits.

  14. When I had suggested a top-mounted, detachable/interchangeable payload/passenger module for an RLV in my comments to the previous post, I was trying to address flight rate for an early-model RLV. Granted, making a separate component may cause weight penalties to creep up, but it makes for a more versatile vehicle.

  15. jsuros says:

    Jon,

    I’m not sure you even need to lower the price of a passenger RLV below the current ~USD$20 million per passenger price point. If you could offer single orbit rendezvous and 12 hour prep time for a passenger RLV you could sell tickets. A blackhorse-scale rocket plane with ejection seats for a pilot and single passenger would be a good first design that makes money while proving the concept. Heck. At that price, you could afford to expend a drop tank and a USD$10 million engine every flight and not care.

    Something along the lines of a falcon 1 with one of those fluffy gliders you are never talking about strapped to the side could also do it. You might have to recruit 4’2″, 90 pound pilots and charge passengers by the pound on a prohibitive scale but so what?

    Big aerospace would scoff at something like this, and they’d be right that they could do much better. Except of course that they never have.

  16. Colin says:

    Jon:

    Some fun assumptions and oversimplifications for example’s sake:
    5 year Development Amortization
    $200M Startup
    $60M Yearly Operating Costs
    $5M Revenue per flight
    20 Flights per year
    $40M per year in profit after year five assuming NO increase in demand.

    ALSO…
    Pete brings up an interesting point. There is a non-trivial value in an orbital destination. A significant portion of the value in a Soyuz ride is your week long stay at a swanky multi-billion dollar multi-national hotel in orbit. Important for RLV developers to remember – the whole experience. I am willing to pay $20-35M for a week on ISS. I am willing to pay what for a few orbits? $1M? $5M? $10M? How much extra would i pay if i don’t have to train for 6-months before flying?

  17. Kelly Starks says:

    >… RLVs tend to have more development costs (and hence higher
    > amortization costs) than ELVs. This means that in order to be profitable,
    > they have to fly more often than a comparably sized ELV. Most
    > studies peg the profitability breakeven point somewhere around
    > 30-50 flights per year– <

    I’m curious what studies you’ve seen and how well thought out they were?

    In the one I saw, and could look over the calculations the paper was based on, showed it was driven by the assumption that ELVs were over 30 times cheaper to develop then comparable RLVs. Since actual ELV and RLV projects I can think of had only a couple times the dev cost of one another, I was dubious of the claim.

    As to the “counter intuitive” market part, the fact you could get anyone to spend tens of millions, and several months of their lives, to fly on a craft with a 1 out of 50 fatality rate, to visit the ISS, is amazing. Assuming their boards of directors would let them take the risk, how many could take that much time out of their schedules? Conversely a safer, lower time commitment, flight service, with a order of magnitude lower cost, would be expected to get a much bigger market.

  18. Seer,
    Jon, when people say $/lb to leo for a rlv, they are normally comparing a rlv booster to an expendable one. In other words, any passenger module carried by the rlv would be counted as part of the “payload”. Also included would be the heavier heatshield, recovery gear etc, to return the more heavily loaded rlv to earth.

    Well, that assumes that the RLV isn’t designed from the start with the capability to return a full cargo load. You don’t *have* to design it based on flying things one way, and part of my point was that an RLV is going to be competitive for flying people long before it’s competitive for flying satellites or anything else that only cares about the raw $/lb.

    Depending on the size and configuration of the rlv and its passenger module, the cargo or crew might only be half or a third of the rlv’s payload. This doesn’t include any propellant to take the rlv to a space station and back.

    I’m not sure I follow you. Sure, if you’re flying a one-way mission, you might be able to eke out a little more payload than the weight of the systems needed for hauling people. But I doubt it’s going to be a factor of 2-3x.

    There will also be non trivial operating costs: replacing life support consumeables, testing and checking between flights that all the systems work.

    Sure, but we’re not talking about a Space Winnebago that spends weeks in space with a crew on board. We’re talking about something that delivers passengers quickly to a station and comes home afterward. Sure, there will be some emergency supplies, but I don’t see why servicing such a life support system is going to be such crazy overhead. You’re talking about supporting a small handful of people for less time than a typical fighter jet flight or a typical regional jet flight. Things will be a little more complicated than either of those, but I think you’re making a showstopper out of a relatively minor additional hassle.

    Still you are right that the cost would not be much higher than $5000/lb assuming Falcon 9 figures. But that is still $5 million per ticket. That’s just for orbiting the earth.

    I’m not sure we’re talking about the same thing here. I was comparing an RLV designed for hauling people with ELVs with capsules on top. What are you talking about?

    If that led to a $100 million dollar revenue business, it would only make say $25 million profit a year. That’s hardly a significant new market opportunity compared with the existing leo market for satellites.

    Other than big government LEO satellites, there’s almost no demand right now for smaller LEO satellites. Between SpaceX and Orbital, you’re talking about a half-dozen flights per year. Maybe 10 in a good year. Nowhere near enough to support an RLV. But the 20 flights per year number would likely be a starting number, not a final steady-state number. My point was just that if developing a first-gen RLV ends up being harder than people suppose, that they might be able to be competitive flying people much sooner than they would be flying satellites.

    ~Jon

  19. Jonathan Goff Jonathan Goff says:

    Seer,
    The shuttle orbiter is a particularly bad example. That 12 tonnes not only carries the crew to a station, but also serves as a mini-station by itself. Anything designed to comfortably fly 7 people for 2 weeks, including having facilities for doing experiments, etc. is going to be a lot heavier than something designed for just flying the people to a destination, or for short (single day or less) solo flights.

    I do agree that a lot of capsule ideas for vehicles designed primarily to fly satellites tend to be undersized for flying people and thus are volume constrained…but I’m not talking about turning a satellite launcher into a people carrier.

    ~Jon

  20. ben reytblat says:

    Hi, Jon,

    If anything, I think you’re slightly conservative. I think the VC-funded startup experience shows that that it’s not necessary to amortize the costs of R&D. It is sufficient to create a company that generates positive cash flow, EBIDTA. The investors get paid (and very well indeed!) on a liquidity event (re-capitalization, M&A or IPO).

    Here’s a totally hypothetical example:

    – $200MM investment @ 50% equity
    – 20 flight-tickets/year @ $5MM = $100MM/yr revenue
    – Taking some of the M&A deals over the last 5 years, we can conclude that a reasonable revenue multiplier on a first-mover in a relatively empty segment with excellent growth potential can be 10x, so a strategic exit might earn $1,000MM
    – Investors walk away with $500MM, a 2.5X ROI over a small number of years – not Google-level returns, but quite respectable

    The key is to be that first mover and to generate that revenue w/o exhausting the market. Of course, keeping the development costs lower wouldn’t hurt, either.

  21. KGyST says:

    There is an assumption in these calculations nobody talks about, and it’s quite surprising, but probably because of focusing on manned spaceflights.
    You talk about an $/lbs price and a feasible launch rate per year, but there is a hidden assumption about lbs/launches, and I think the solution is here.
    One disadvantage of most of today’s space transport systems is that they are designed to carry huge payloads, and it make these rocket a luxurious stuff, therefore they are “handmade” like other precious things.
    Achieving an annual 50 or 100 launches can be done by ‘disassembling’ satellites into small, autonomuos sub-satellites can be operated individually or in swarms, for example, and launch only one of these sub-satellites with a rocket.
    Lowering payload size could allow lowering rocket size, development costs, insurance risk per individual launch (higher number of launches with lower loss per accident). Manufacturing high masses of identical satellites seems to also lower total cost. And it allows operators to follow market demands closer, also allow smaller companies to join the market.

  22. Jonathan Goff Jonathan Goff says:

    Ben,
    You have a good point. Investors are investing with the intention of growing the value of the company, so they can make an exit at a future date at a higher valuation. They don’t invest in startups to get dividends, or get a loan paid back.

    ~Jon

  23. Jonathan Goff Jonathan Goff says:

    KGyST,
    There definitely are things that could be done to make Satellites more RLV friendly. The problem is that all of them take time, money, and have risk associated with them. It’s possible that someone may have done what you’re suggesting by the time an RLV is in operations, but if it isn’t, the satellite community tends to be severely conservative.

    ~Jon

  24. I consider myself an arm-chair space guy, so there is much that I don’t know, but here goes anyhow…

    An RLV that can launch more frequently with smaller payloads can participate in the existing satellite business with the right architecture. With an assembly/fuel depot in equatorial LEO, launching from the equator, a launch window is available every 90 minutes or so. If the satellite is launched in pieces and assembled and tested in orbit, satellite mission failure is minimized. For geosynchronous equatorial orbits, a Hohmann transfer orbit opens up every 90 minutes or so. The RLV can strap on some fuel tanks and ferry the satellite up to geostationary orbit and come back down. If the satellite breaks, the same RLV can go up and fetch it, bring it back down, fix it and replant it up there using fuel in the fuel depot. Being able to fix the satellite in LEO is way cheaper than building another one and relaunching from the ground.

    For non geostationary orbits, a plane change is required. Perhaps one of those far lunar orbit plane change maneuvers (that I do not understand) can be used.

    My $.02,

    -Wayne

  25. Seer says:

    Okay, since everybody has misunderstood what I was saying its probably my lack of clarity to blame…

    Seer: “Well, that assumes that the RLV isn’t designed from the start with the capability to return a full cargo load.”
    Yes, but even so that kind of rlv will inevitably be able to carry less payload into orbit than one designed for one way satellite launches.

    Also, if one wants the rlv to go to a spacestation then the payload drops by about half for a typical TSTO.
    As for my comment about how much of a “capsule” or crew compartment can consist of crew or cargo, I was thinking of how much mass SpaceX’s Dragon would weigh if you were to strip it of propellant, heatshield, parachutes etc. It would still be about 3 tonnes – half the total mass, maybe more.

    Even massive spacecraft like the ATV only have 40% * percent of their mass devoted to cargo.

    * Volume might be the limiting factor.

  26. Jonathan Goff Jonathan Goff says:

    Seer,
    Sorry if I came off a little snotty. I was just frustrated that most of the early comments seemed to have had nothing to do with what I was trying to get across with the post. That said, I still have some comments on your latest comment:

    Yes, but even so that kind of rlv will inevitably be able to carry less payload into orbit than one designed for one way satellite launches.

    That’s possibly true. But the market for LEO sats isn’t big enough to justify an RLV, and as I pointed out in this post, it looks like flying people is a better match for RLV characteristics anyway. And once you’ve designed a vehicle to be able to service those other markets, they rapidly become a lot more valuable anyway.

    Also, if one wants the rlv to go to a spacestation then the payload drops by about half for a typical TSTO.

    Compared to what? A due east 23.8 degree inclination payload to 200km orbit? Sure. But who actually buys payloads to that trajectory? The vast majority of the satellites in LEO are in polar or near polar orbits, and are at altitudes in the 500-1000km range (lots of polar, lots of sun-synch, and lots of satellites in the Iridium and Globalstar constellations, other than Molniya orbits there aren’t much else). Unless you’re going to require them to include a kick stage, launching to a space station is likely going to require less delta-V than launching to a typical LEO comsat orbit.

    As for my comment about how much of a “capsule” or crew compartment can consist of crew or cargo, I was thinking of how much mass SpaceX’s Dragon would weigh if you were to strip it of propellant, heatshield, parachutes etc. It would still be about 3 tonnes – half the total mass, maybe more.

    But if you’re doing an RLV, how much of that mass would still be needed? How much of the mass is stuff an RLV would need for launching people, propellants, or provisions that wouldn’t be needed for launching satellites? You still need propulsion, avionics, TPS, landing systems, etc…the only things I can see are different are a) a reusable pressure shell instead of tossing the payload fairing, b) rendezvous/prox-ops stuff.

    I definitely agree that b is a potential issue, which is why I’m a fan of using tugs to offload as much of the station interfacing hardware as possible. But in the end, you’re not going to be able to close the business case for an RLV without reaching beyond the satellite market, so can you really avoid any of these subsystems?

    ~Jon

  27. MG says:

    Jon,

    Setting aside the question of whether your initial point was clearly stated (and I confess I missed it), I am glad you articulated your thinking, and the commentary has helped bring out a couple relevant points (whose truth value is TBD):

    1. Start-up investors don’t need their returns to come from current operations. Rather, they need the company to demonstrate rapid growth and a narrowing between cash burn rate and operational income.

    2. Humans will pay a very high per pound price for space flight. We have established price points for orbital + 1 week in station. We have not yet established the latent demand for orbital flight alone. We have established demand for suborbital flight. The experiential aspect is important.

    3. The RLV design and mass increment for human flight, compared with an ELV + capsule, is a small (undetermined) fraction of the total. If one is starting to design a (sufficiently sized) LV, one might as well design it for carrying humans.

    I likely missed some of it, but that is my “take home” message so far.

  28. Jonathan Goff Jonathan Goff says:

    Seer,
    On second thought, if you designed an RLV to serve both the satellite markets and the people/stuff-to-stations market, you wouldn’t have stuff unneeded for satellite launch on the satellite launches. You’d probably have a bolt-on package that was either an expendable fairing (if your trajectory allows that) plus satellite, or the full crew/cargo/propellant carrier in the same OML. That means that at least some power conditioning equipment, all of the Rendezvous and docking stuff, and some of the thermal management stuff, and a bit of the structure wouldn’t be necessary for satellite launch. So, based on that AAS paper (since it actually had a detailed mass breakdown), you may be talking about another 400-500lb per person, plus or minus. So that would be about 1000-1500lb each.

    That doesn’t destroy my original point, but it does dilute it somewhat. That means that you can still get to elastic parts of the demand curve for people well before you hit demand elasticity for satellites. It still means that a launcher that’s barely competitive with ELVs for satellite launch might be able to eat their lunch entirely for launching anything that would require a capsule. But it does point to the need to be careful on how you design the people/cargo/propellant carrier to not go too overboard. It also underlines again the benefit of tugs, and possible innovative “docking/berthing” techniques…but those are discussions for another date.

    So, I do concede you have a few points, I was just having a hard time understanding what you were getting at.

    ~Jon

  29. Axel says:

    You edited: “RLV that would have far too high of a price per pound to be competitive in the satellite launching business may still be far cheaper for launching people than an ELV with a capsule”

    So your main point was to say that a RLV has a better chance to be cheaper than an ELV for two-way passenger transport missons than for one-way cargo transport missions? Well, that sounds quite intuitive to me, because RLVs need less additional mass to return a passenger than an ELV designed for one-way missions would need to return a passenger. Sorry for not recognizing it as the main point.

    For the shuttle the capacity is given as x tons to orbit, y tons to ground. Usually everyone talks about price per kg to orbit. Price per kg to ground is a term I haven’t heard so far.

  30. Randy Campbell says:

    Axel:
    (IMHO here so take it for what’s it worth :o)
    You wrote:
    >So your main point was to say that a RLV has a better chance
    >to be cheaper than an ELV for two-way passenger transport
    >missons than for one-way cargo transport missions?
    >Well, that sounds quite intuitive to me, because RLVs need
    >less additional mass to return a passenger than an ELV
    >designed for one-way missions would need to return a
    >passenger. Sorry for not recognizing it as the main point.

    That’s close to what I got also, though the actual “main” point seems to be while your notional RLV price-per-pound of passenger to (and from) orbit was nominal “higher” than an ELV used to launch satellites to GEO one way given an optimal price point and a robust, low maintenance, fast-turn-around RLV (and no, none of that is a ‘given’ just because the vehicle IS reusable) your “people” flights increase and thus your market which increases your bottom line. The three “P”s that Jon listed (People, Propellant, Provisions) would seem to be a more ‘flexible’ market able to increase in a rather short time whereas satellite launch services is less flexible having long lead times and much less ability to change to meet the availibility of higher flight rates or other advantages of an RLV.

    You also wrote:
    >For the shuttle the capacity is given as x tons to orbit, y tons
    >to ground. Usually everyone talks about price per kg to orbit.
    >Price per kg to ground is a term I haven’t heard so far.

    There is a simple and logical reason for that; there isn’t much to bring BACK from space. Other than people and some small mass allowence for scientific samples and such, less mass comes down than goes up. Jon mentioned (IIRC) that the “price” for people involves an assumption of both the cost to get them to orbit as well as returning them to Earth. Propellant and Provisions would essentially be “one-way” so someone who is looking to put those into orbit would reasonably expect to pay less for only ‘half’ the trip on an RLV, instead of the same ‘price-per-pound’ as a person who’s coming back down. So you will in all likely hood continue to hear “price-per-pound-to-orbit” most often used for quite a while to come :o)

    However, Jon that brings me to something I wanted to mention but have had a very hard time getting down to writing. I will post it in a seperate post but I’m hoping you “re-visit” the comments on some of these older posts because I’ve screwed up my courage enough to actually post some rather interesting (and in some ways counter-intuitive also :o) thoughts that I hope will get some responses from the many experts and thinkers who drop by your blog.

    (Ya, I know… let me bleed myself a little and then jump into the Shark infested waters… Ah well who want’s to live forever? :o)

    Randy

  31. Randy Campbell says:

    …and this is why I have such a hard time :o)

    Leaving early today to make our room reservation time at CONduit this year. Hopefully the hotel has wireless and I can find time to actually sit down and write. (Unless my wife has the laptop, which she usually does once she’s ‘done’ with the art and dealers rooms :o)

    Randy

  32. Pingback: RLV Markets Part IV: Why Small May Be Beautiful | Selenian Boondocks

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