Elon Musk: Europe Can't Handle Our NASA Contract


The success of back-to-back launches of commercial communications satellites on Space Exploration Technologies’ (SpaceX) Falcon 9 rockets in December and January has drawn barbs from competitors in the commercial launch industry.

Stephane Israel, chairman and CEO of European launch service provider Arianespace, has repeatedly criticized Hawthorne, Calif.-based SpaceX for charging its U.S. government customers roughly twice the cost of a commercial Falcon 9 launch. SpaceX currently advertises a Falcon 9 v1.1 mission to geosynchronous transfer orbit (GTO) starting at $56.5 million per launch.

European Space Agency (ESA) Director-General Jean-Jacques Dordain has also suggested SpaceX’s $1.6 billion fixed-price contract with NASA to deliver 20,000 kg (44,000 lb.) of cargo to the International Space Station (ISS) is keeping Falcon 9 prices artificially low.

Both officials assert SpaceX is billing NASA an estimated $120-140 million per launch, a range likely derived from a contract spec that calls for 12 such cargo runs by the end of 2015.

In a Feb. 20 interview, SpaceX founder, CEO and Chief Designer Elon Musk responded to the criticism, asserting that while NASA pays $120 million to SpaceX for each cargo flight, the price tag covers more than a Falcon 9 launch, including the cost of SpaceX’s recoverable Dragon cargo vessel and its safe return to Earth.

Musk says Arianespace, which manages commercial and government missions of Europe ’s Ariane 5 heavy-lift rocket — including launches of ESA’s Automated Transfer Vehicle (ATV) to the ISS — would be hard-pressed to execute his company’s NASA agreement.

“If we handed them our NASA contract, could they do it?” Musk asked, arguing that Evry, France-based Arianespace currently relies on $135 million in annual price supports from the 20-nation ESA to break even.

“Arianespace would go bankrupt faster if they got our NASA contract,” Musk said.

SpaceX President Gwynne Shotwell says the comparison with other launch vehicle providers is unfair, given the sophisticated nature of the Dragon spacecraft included in the price of NASA’s ISS missions.

“Dragon is like a Falcon 9; it’s a highly complex spaceship, triply redundant, and it’s got all sorts of communications systems, video, S-band, so of course I’m going to charge more for a Dragon mission than a standard Falcon 9 launch,” she said in a Feb. 27 interview.

Shotwell said with any SpaceX mission, the company starts with pricing for standard launch vehicle services, “and anything a customer asks for in addition to that, we charge them for.”

She said SpaceX is hopeful NASA will develop a degree of comfort with Falcon 9 and Dragon that will allow them to save money by purchasing standard commercial services.

“But in the meantime they add lots more analysis, lots more reviews, audits, more insights, more telemetry, we have on-site residents here that we have to house and provide office space, power to, and we have to provide them engineers to interface with,” she said. “So it is more expensive. But we’re not making a ton of money on the additional stuff.”

After the success of its first two Falcon 9 launches to GTO in December and January, SpaceX now has 14 launches on its manifest in 2014, three of which are expected to slip into next, including the debut of the company’s Falcon Heavy, which Musk said could take place early next year.

Following the January launch of Thaicom 6 for Bangkok-based fleet operator Thaicom, SpaceX plans to conduct four cargo resupply runs for NASA in 2014, the first of which is slated for March 16. Two launches for New Jersey-based fleet operator Orbcomm are also planned, along with two GTO missions for AsiaSat of Hong Kong, a GTO launch for the government of Turkmenistan and an Argentinian Earth observation satellite to be launched from SpaceX’s new pad at Vandenberg AFB, Calif. The manifest also includes a U.S. Air Force launch of NOAA's Deep Space Climate Observatory (DSCOVR) mission and a dual-launch of Boeing's first two all-electric 702SP satellites built for Asia Broadcast Satellite (ABS) of Hong Kong and Satmex of Mexico.

In a Feb. 14 earnings call, Satmex owner Eutelsat listed its future launches, indicating the first all-electric Satmex launch -- Satmex-7 -- will take place in the first quarter of 2015. 



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