Decisions and Costs to the Private Sector

very occasional contributor john hare

I noticed the other day that Space Ship Two is supposed to be flying powered flights by the end of this year, and revenue flights by the end of next year. This is nine years from XPrize victory to revenue service if they make this latest time table.

The development of the hybrid engine receives most of the blame for the long interval in the articles I read. If true, and I don’t know for sure that it is, then the engine choice points up one of the strengths of free enterprise vs command systems. That point is that a possibly poor decision early on, and no likelihood of changing it, has and will cost Virgin Galactic large sums of money in terms of passengers not flown. Many of us, from the outside looking in, think the company would have been better served going with a somewhat experienced liquid engine builder or two. Several companies have produced generations of liquid engines during the time that Virgin has been trying to get that large hybrid operating.

That cost comes in several varieties. They haven’t been making money from flights during the last few years that most of us thought would be profit years for them. The development costs have been accumulating for years on the wrong side of the time value of money. The competition has had time to get competing vehicles closer to flight. The future development of high flight rate orbital transports is now much more likely to be contracted to firms with faster perceived development times. Most of the potential competitors can realistically claim that they have never had the relatively lavish funding that Scaled Composites has had from Virgin Galactic.

If XCOR, Blue Origin, or Armadillo Aerospace beat Virgin Galactic to revenue service by a year or so, that company will most likely get the high value early riders with  seat prices decreasing as Space Ship Two enters service with resulting increased difficulty in getting the development costs paid off. The resulting profits could be far lower that Virgin had projected making this a poor investment on their part. Even if Space Ship Two beats the others to market, the period of exclusivity will be considerably reduced will similar reduction in revenue. Even the prestige that Branson is expecting to boost the Virgin brand will be tarnished.

The point is that if Space Ship Two is late to the game because of a stubborn insistence on a troublesome hybrid, then Virgin Galactic will pay through the nose for that mistake. Space Ship One could possibly have flown a bit earlier with the 12k kerosene/LOX  thrust chamber that Tim Pickens owned well before getting involved with Scaled Composites. If that had happened, it is just possible that Space Ship Two could have been flying years ago with a better propulsion system than they are likely to have in the next several years.

The beauty of it all is that as taxpayers it doesn’t much matter to the rest of us who wins or loses and who survives as long as some of the companies get there. I’m so happy that I wasn’t the sub-orbital space czar in late 2004, as I would have committed millions of your tax dollars to backing what looks like that wrong horse. This is the true strength of free enterprise vs command economies in that failure of one doesn’t bring the failure of all, or even prevent the industry from developing due to a single possibly premature decision.



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I do construction for a living and aerospace as an occasional hobby. I am an inventor and a bit of an entrepreneur. I've been self employed since the 1980s and working in concrete since the 1970s. When I grow up, I want to work with rockets and spacecraft. I did a stupid rocket trick a few decades back and decided not to try another hot fire without adult supervision. Haven't located much of that as we are all big kids when working with our passions.

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About johnhare

I do construction for a living and aerospace as an occasional hobby. I am an inventor and a bit of an entrepreneur. I've been self employed since the 1980s and working in concrete since the 1970s. When I grow up, I want to work with rockets and spacecraft. I did a stupid rocket trick a few decades back and decided not to try another hot fire without adult supervision. Haven't located much of that as we are all big kids when working with our passions.
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8 Responses to Decisions and Costs to the Private Sector

  1. Chris (Robotbeat) says:

    I’m not a fan of command economies, they are incredibly inefficient and individual freedom is lacking. HOWEVER, if you look at projects like the Manhattan Project or different weapons systems, often the solution is to through funding at the problem, to try developing SEVERAL solutions in parallel all with heavy funding. For the Manhattan Project, several methods for enriching the fuel were done at the same time and even two totally different bomb designs and fuels were done in parallel. It worked.

    But command economies are only needed (and are probably only even effective at all) during times of national emergency and unity.

    I quite agree with your conclusion that this is a strength of the free market. But the important point is that sometimes just plain competency in those making the systems engineering choices is just as important as the contractual or market approach.

  2. Vladislaw says:

    With XCOR flying with a lower ceiling and being strapped into your seat it will not pull that many away from virgin. There are basically two selling points, how high do you fly, giving how much zero g time and how much room do I have to move around in while in zero g.

    Virgin looks to be the winner on those two selling points.

  3. john hare says:

    How early is a factor for the prestige of bragging rights. The view could better from the Lynx or one of the VTVLs. There are somewhat more than two selling points.

  4. Andrew S. Mooney says:

    I would respectfully suggest that you’re possibly being a bit hard on Virgin’s Hybrid as it possibly fits into a broader strategy for their vehicle’s operation: They want to be able to operate several of these vehicles in several different locations, including overseas such as in Dubai and Europe, and that heavily leans towards some design of rocket engine that is capable of being very reliable and easy to install and test for “simple” operations and flights in places like that with absolutely nothing tricky or full of unknowns that must be ironed out by testing and setting a liquid motor up. These motors should potentially be capable of being swapped out and sent back to the US for reconditioning and refuelling with the rubber. The other part is a motorsport-grade sheet metal tank.

    Another thought is that when Virgin and Rutan flew SpaceShipOne, the HTPB motor was the idea of doing it as fast as possible, and designing and qualifying a LOX tank for a vehicle that size probably wasn’t much of a good fit with that in terms of money and manpower. Can Scaled Composites build an LOX tank out of carbon fibre? If they can now, back around the time of the X-Prize it was a big unknown that someone (Kistler? Rotary Rocket? I forget.) were the only people who were really trying to attempt.

    And if you’re not using liquid oxygen for all of the reasons of unknown structures and a tricky engine, you’re down to finding another oxidant that isn’t either insane (Nitric Acid) or something the US no longer has much interest or immediately available skill in (Hydrogen Peroxide), leaving you with Nitrous.

    Other companies like XCOR, Blue Origin and Armadillo are not, to my knowledge, going to fly outside the United States, and hybrids would be a lot easier to get through ITAR than a new-design liquid fuelled rocket engine….And this thing’s got to get through ITAR in a way that none of those companies must as Virgin Group is headquartered in Surrey, England, not Surrey, Virginia.

    So it may be a good move on a broader stage.

  5. Peroxide liners for large composite tanks are even harder than LOX liners. In the end you come back to aluminum.

  6. Chris (Robotbeat) says:

    XCOR is supposed to fly outside the US. Wet leases, I think in the British Virgin Islands (if that deal is still on) and South Korea (same thing), I believe. And probably not limited to that.

    Lynx will be easier to get flying in more places since it is just a single small vehicle versus two in the case of SS2 and WK2. Also, Lynx can be just refueled between flights, does not need a big motor casing replaced each time and doesn’t need to be mated to a large aircraft each time. Lynx is also much smaller than WK2 and probably Lynx costs a lot less per unit than WK2/SS2, so that means more places can afford to buy one… and since Lynx will need a much smaller ground crew than WK2/SS2 (and half the pilots), that also has implications as far as how many can be out in the wild. One Lynx pilot can fly several trips a day to space versus just probably one flight per day with WK2/SS2 and two pilots. Seating numbers make up for that somewhat, but it should also be a lot easier to keep one Lynx flying regularly than to have a bunch of people whose schedules all line up to do a WK2/SS2 flight.

  7. Kirk Dameron says:

    I absolutely agree with your main point, John!

    The market sector choices that any particular competitor makes are largely irrelevant to the “public” in general, and to the taxpayer in particular. So while any of us may have a set of opinions on the wisdom of choices made (e.g., hybrid vs. liquid-fueled rocket), the outcome will only be determined over time, by the competitive market process of what follows. Will the hybrid squirrel juice come out “better” in the end, or will the liquid? I have no idea!

    I’m reminded of the Chinese proverb of the old man whose stallion escaped from his stable. His neighbors said “bad news”; he said, maybe bad, maybe not, we will see. ( I think that is how it will go with the myriad choices made by diverse space access technology developers. We don’t know.

    But letting entrepreneurs and investors — who are after all the residual claimants — put their resources where they want to, under the rule of law and with private property rights, and build whatever technologies they choose to develop, is THE WAY to innovate that will benefit society overall.

  8. Robert Clark says:

    Nice post. Thanks for that. They latest news is that Virgin Galactic may move to liquid fueled engine for later versions of their system:

    A-HA! SpaceShipTwo’s Parallel Engine Program Revealed.
    Posted by Doug Messier on July 20, 2012, at 4:05 pm in News

    Bob Clark

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