DRAFT 1:
Currently, the space market consists of companies that launch vehicles, satellites and companies that provide raw materials and fuel. The total revenue in space industry is approximately $100 Billion per annum. In future, this market will include companies that are not presently dealing with space technology. Space market could consist of commercial companies. For instance, companies that deal with freight services, supply/logistics, tourism, etc. d
An analysis conducted by Future Space Transportation Study (FSTS)[1] shows that the revenues in space market will be generated from established organizations that can further their services by leveraging opportunities in space market.
Fig: Future market revenues from other non-space organizations
Sources of Revenue:
The revenue can be generated from the non-space related organizations from their investments in research and development. For instance, the revenue of tourism industry is estimate to be US $1 Trillion, which also consists a major chunk of adventure travel revenue. Therefore, at least US $2 Billion, that is one percent of revenues from the tourism field can be invested in research and development of space industry and market. In addition to this, the fuel industry, pharmaceuticals, iron and steel, raw material industries, etc., spend anywhere between 10%-15% of their revenues on research and development. If a fraction of these investments are directed towards the space sector, US $2.5 Billion can be accumulated. This amounts to the cost being spent on current geo satellite launch. Therefore, these investments would highly benefit the space industry.
Passenger Travel Market:
Leo, formerly Rapid Express, is an inter-city transportation service. The study conducted by FSTS shoes that, the passenger travel markets are interested in space service for travel. As a part of an adventurous and entertaining package, Leo has offered to send its passengers on a lower orbital tourism. The following table summarizes the pricing and revenue estimates:
Price Per Ticker: $400,000
Passengers Per year: 10,000
Annual Revenue: $4 Billion
Pricing Requirements for a Future Market:
Based on the analysis by the Commercial Space Transportation Study(CSTS)[2], about twenty percent of the markers were taken into account for analysis as the potential future markets. CSTS says that- “the space launch market is in-elastic above a certain launch price point i.e. approximately $600 per pound and elastic for prices below”.
The following image shows the various market segments that can be potential future markets, as a function of estimated launch price.
Fig: Market Segment as a function of launch price
Another analysis conducted by FSTS, shows the Total Yearly Revenue and Yearly Flight Rates of the future markets. The following graph illustrates the same:
Fig: Total Annual revenue & Yearly Flight Rate
Recurring Costs & Launch Price:
The recurring costs have to be minimized and the availability of the RLVs should be made constant throughout the year, about 150 per year.
If the recurring costs are set to about $500 per pound, then the estimated launch price of freight weighing 20,000 pounds is going to cost about $10 Million. This launch cost, has to be minimized to the order of $5 Million covering the following costs:
Launch Cost ($5M) = propellant + spares(parts and engine)+ operating overhead
For systems that have a flight rate greater than 50 per year, the operational costs are given by air shuttle expendables which includes the amortized and actual expendables. However, the operational cost depends on the number of main engines. This could be $150,000 to $250,000 per hour, per engine, per flight.
Spacex and NASA, the pioneers in space technology have differing opinions on the efficiency of Reusable Launch Vehicles. Below are the views of each of these companies in terms of the costs associated with RLVs.
SPACEX
Falcon 9 costs about $60 Million to manufacture with an additional cost of about $200,00 for fuel and gas. But, when RLVs are used, this cost could be substantially decreased. Other than the cost associated with fueling the rockets, some amount would have to be invested in refurbishing the rockets for reuse. When out in space, the rockets are subjected to extreme conditions, friction, high temperatures, etc. This causes the parts of the rockets to undergo severe wear and tear. Spacex estimates the refurbishment costs to work out to half a million dollars as opposed to $60 Million that is required to make a new Falcon 9. According to Spacex, Falcon-9 are one of the cheapest in the space market, therefore the cost would drop significantly if reusable Falcon 9’s are used instead. This in turn would make the space market more accessible to the non-space related companies due to economies of scale. As a result, the competition in the space market would also increase.
TO BE EDITED :
NASA
The reusable design of the Shuttle was meant to save money, since all but the external tank could be used again post-launch. "Unfortunately it didn’t work out that way for the Shuttle," says Wayne Hale, a former manager of NASA's Space Shuttle program, and a member of the NASA Advisory Council. "It was a very complicated vehicle that took an awful lot of refurbishment to get it to fly again." The Shuttle's main engines had to be replaced after every few launches. The vehicle also needed lots of inspections and repairs between missions. Additionally, its solid rocket boosters needed constant updates once they had been recovered from the ocean, and the external tank had to be built anew for each flight. All together, this helped to drive up the cost of each Shuttle mission to somewhere between $450 million and $1.5 billion per launch. When the Space Shuttle was launched, it ushered in a new era of reusable launch vehicles, although only partly because the bay that houses the rocket propellants are deemed expendable. While the crew bay of the Space Shuttle is reusable, it takes at least two months to refit the shuttle for another mission. Again this entails a lot of cost just to reuse the space vehicle and thousands of man-hours to complete the refitting work. With estimates made available by NASA, it was found that the cost of refitting and using a new space vehicle are almost even. To launch a shuttle costs roughly $20,000 per kilogram, a figure much higher than when expendable launchers are used.
Successful in developing the reusable technology, it is expected to significantly reduce the cost of access to space, and change the increasingly competitive market in space launch services.[24][57] Michael Belfiore wrote in Foreign Policy in 2013 that, at a published cost of US$56.5 million per launch to low Earth orbit, "Falcon 9 rockets are already the cheapest in the industry. Reusable Falcon 9s could drop the price by an order of magnitude, sparking more space-based enterprise, which in turn would drop the cost of access to space still further through economies of scale."[22] Even for military launches, which have a number of contractual requirements for additional launch services to be provided, SpaceX's price is under US$100 million.[58][59]
According to Elon Musk, almost every piece of the Falcon should be reused over 100 times. Heat shields and a few other items should be reused over 10 times before replacement.
ADD PRICING TABLE:
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