Reusable vs. Expendable Rockets: Economics and Future Prospects

The debate between reusable and expendable launch vehicles has long been a subject of intense discussion in the space industry. SpaceX's successful reusability efforts, particularly with the Falcon 9, have brought this topic to the forefront of discussions. However, the economics of these systems remain complex and multifaceted.

Economics of Reusable Rockets: A Cost-Effective Solution

Reducing Costs: One of the most significant advantages of reusable rockets is cost reduction. SpaceX has demonstrated that its Falcon 9 boosters can be recovered and reused, cutting costs significantly. For example, SpaceX only needs to use about 5% of the booster propellant load for recovery, with some contingency in case of early engine shutdowns. Although a full propellant load only accounts for about 1% of the rocket's overall cost, the savings from reusing boosters can be substantial.

Regression Analysis: According to SpaceX, by the third use of a booster, they start saving money. Some boosters have even been reused for more than 10 flights, with examples like Flight 15 for the Falcon 9. For payloads that do not allow booster recovery, SpaceX can choose to use expendable boosters that have already paid back their costs.

Improved Payload Capacity and Cost-Effectiveness

Falcon 9 Evolution: The evolution of the Falcon 9 from its early versions has significantly improved payload capacity. For Geostationary Transfer Orbit (GTO) missions, the payload has gone from approximately 5.4 metric tonnes to 8.3 metric tonnes. This is a 30% improvement in payload capacity.

Competitive Pricing: The pricing of the Falcon 9 and Falcon Heavy underscores the economic benefits of reusability. For instance, the Falcon 9 expendable version costs $63.8 million, while the 'space-proven' reusable version costs $90 million. The cost of launch vehicle hardware, ranging from $1.73 million to $2.3 million per tonne, and propellant (ranging from $120 to $600 per tonne), provides further insight into the economics.

Cost Breakdown and Profitability Analysis

Cost Breakdown: The cost of the Falcon 9 includes:

2 boosters costing $38.4 million each 1 core (booster) costing $76.8 million 1 third stage costing $9.2 million Fairing costing $3.9 million Liquid Oxygen (LOX) and Rocket Propellant-1 (RP-1) totaling $355,074 Launch operations costing $6.345 million A margin of $15 million

Recovery and Maintenance Costs: The recovery and maintenance costs are estimated to be 12 times the acquisition cost. This means:

Core recovery: $4.608 million Fairing recovery: $0.468 million Total recovery and reuse: $14.292 million

Profit Analysis: If SpaceX sells four expendable launches and four space-proven launches, its revenue is $510 million, with a cost of $190.771 million. This results in a margin of $319.229 million, or 62.6%.

Scalability: Assuming SpaceX builds three rockets per month and sells three expendable launches, it can generate $540 million in revenue annually. By reusing the cores and fairings, the company can add an additional 1242.1 million in revenue, effectively increasing its total revenue 6x and its margin 23x.

The Future of Space Industry

Market Expansion and Growth: SpaceX's significant market share and potential for growth in the future cannot be understated. By building a network of lightweight modular communication satellites, SpaceX can create a global wireless hotspot for over 6 billion users, generating significant revenue. This model mirrors the business practices of 19th-century industrial giants like the Weyerhaeuser family.

Diversification and Innovation: With the revenue generated from these endeavors, SpaceX can pursue further diversification and innovation. This could include:

Acquiring and merging with aerospace companies worldwide Building heavy lift launchers, including BFR and ITS for LEO Increasing the number of reuses to 35,000 to compete with airliners Reducing launch losses from 1 in 34 to 1 in 1.2 million Converting airports to rocketports with mild cryogen capacity Reducing pollution and cost with LNG instead of RP-1 Developing VTOL drones for passenger retrieval and delivery Integrating AI and sensor technologies to streamline passenger check-in and security

Conclusion: The economics of reusable rockets are compelling, particularly when considering SpaceX's ability to scale and diversify its operations. The future of space industry holds immense potential, driven by companies like SpaceX that are reimagining the possibilities of space travel and exploration.