from the your-gazintas-needs-to-be-more-then-your-gazoutas dept.
The SpaceX launch of Taiwan's Formosat-5 satellite was delayed by years following a switch from the Falcon 1e rocket and the two Falcon 9 explosions in 2015 and 2016. SpaceX launched the satellite successfully and recovered the first stage booster on a drone ship, but the company won't make any profit on the launch:
The Formosat-5 is Taiwan's first satellite designed and built entirely with the nation's resources. More than 50 teams from across the country built it to facilitate academic research, disaster prevention, and humanitarian assistance. Originally, the sat was supposed to fly on SpaceX's Falcon 1e, an upgraded version of its first orbital-class Falcon 1 rocket with a lift capability of 2,200 pounds. And according to industry analysis site Space Intel Report, they paid $23 million for the privilege—compared to the typical $62 million for a commercial Falcon 9 launch today.
[...] Despite the delays, Taiwan didn't opt for another rocket provider like Orbital ATK, which operates the Minotaur rocket for missions to low-Earth orbit at a cost of around $30 million. Instead, SpaceX will pay 1.25 percent of the launch costs back to them for every month that Formosat-5 is delayed, according to the mission's contract.
So how much is SpaceX going to lose on this mission? If you remove the potential reusability of the Falcon 9 booster for a moment, a lot. According to a launch cost analysis by investment firm Jefferies International, SpaceX usually makes a 40 percent profit from $62 million commercial Falcon 9 launches with new boosters. That puts $25 million in the bank and $37 million toward direct launch costs. With Taiwan's severely reduced fare of $23 million, SpaceX is not only foregoing its profit but will be out-of-pocket for the remaining $14 million.
Also at NASASpaceFlight.
(Score: 2, Insightful) by Ethanol-fueled on Friday August 25 2017, @04:47AM (2 children)
And Microsoft loses money selling X-Boxes. So fucking what?
(Score: 2) by n1 on Friday August 25 2017, @06:19AM
They don't know shit either way. Space X is a private company, it's just guesswork and really it only hypes the company by saying how much they might make on most launches which are 'scaling exponentially' ... Outside of this article, the author is very positive on Space X.
I think the Musk empire/pyramid/cult is entertaining and somewhat troubling, but this article is nothing either way. Space X probably does make money compared to his other operations, and Musk is likely to borrow against his Space X holdings to fund Tesla at some point.
(Score: 2) by takyon on Friday August 25 2017, @12:38PM
Uhhhh because Xbox hopes to make that back by selling games that run on that Xbox. This launch was an abnormal loss of millions, some of which is attributable to the recent accidents. The reusable booster may help somewhat but they need to spend money to refurbish that too.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 5, Insightful) by mhajicek on Friday August 25 2017, @05:00AM
There's a lot of value in keeping your promises and making your customers happy.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 2) by MostCynical on Friday August 25 2017, @05:22AM (4 children)
so they make $25million on most launches, and lose $14million on this one.
SoaceX makes lots of money
Commentator: "but they didn't make money on every single thing"
Sane people: "so?"
Intenet, people who don't like Elon, random shareholders: "Panic! Panic! Aargh!"
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 3, Interesting) by qzm on Friday August 25 2017, @08:26AM
Not to mention the small fact that there are no share holders.. At least not publicly traded shares.
Space X is probably owned.
I know it is terribly unfashionable to actually stick to a contract and deliver what you promised.. Sigh.
(Score: 0) by Anonymous Coward on Friday August 25 2017, @09:45PM (2 children)
How do you know that? They are privately held and may well be a money pit for the investors, given all the R&D spending. But billionaires may be happy to invest, because they are interested in travel to Mars.
(Score: 2) by MostCynical on Friday August 25 2017, @10:03PM (1 child)
From the summary: "According to a launch cost analysis by investment firm Jefferies International, SpaceX usually makes a 40 percent profit from $62 million commercial Falcon 9 launches with new boosters. That puts $25 million in the bank and $37 million toward direct launch costs."
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 0) by Anonymous Coward on Sunday August 27 2017, @07:07AM
Sounds like a WAG.
(Score: 1, Insightful) by Anonymous Coward on Friday August 25 2017, @08:31AM
Cost of first voyage of an vehicle or vessel is equal to the price of it plus recurrent expenses. On second voyage it is only half of price plus recurrent expenses, ... etc. If you are not using calculating with constant amortization rate (because at first you are not sure how far will initial investment take you), your initial prices must be higher, and exponentially fall of toward an asymptote with each new reuse. Ditto for recurring expenses, up to a level, because from one-off purchase you are becoming regular customer and your suppliers can lower their markup, to keep you coming back. Good record track also lets insurers lower their quotes.
Overall, my point is that it is normal that prices go down from initial, and that is especially pronounced for novel technologies as they mature. Musk may be even pushing it a little, to gain bigger market share, which would further lower costs per launch.
(Score: 0) by Anonymous Coward on Friday August 25 2017, @09:28AM (2 children)
When Amazon or Walmart are selling at a loss to gain market dominance, it's considered extremely effective and quite a bit underhanded and unfair :/
(Score: 2, Interesting) by Chrontius on Friday August 25 2017, @10:25AM (1 child)
Sometimes, things don't go according to plan. Plan was, they'd hang this one up in the sky using a launch vehicle that was since decommissioned. Had they launched on time, on the right vehicle, it would have required literally 1/10th the Merlin engines (though an additional, if simpler, Kestrel would have been required) and a fraction of the fuel. Far less aluminum-lithium alloy in expendable components.
Sometimes, a deal doesn't go as planned.
How you deal with that, that speaks to character.
(Score: 2) by Virindi on Friday August 25 2017, @01:10PM
Or, in this case, the fact that contracts are legally enforceable for damages. There is little point in just tearing up the contract when this amount of money is involved, the amounts dwarf potential legal costs and there is not likely to be much question as to the points of the case.
That's the whole point of having the contract in the first place. Why would they write in such a provision if it didn't mean something.
People are just too used to companies writing "you have no choice but to agree" contracts for them which are totally one-sided. All contracts aren't like that.
(Score: 2) by bob_super on Friday August 25 2017, @07:17PM
Talking about savings against total cost .. what happened to their fairing reuse effort?
Haven't heard about that in a while.
(Score: 2) by Murdoc on Friday August 25 2017, @09:58PM
... If you're not particularly fond of commercial space travel that is. Which I'm not. :)