Flat World Partners

Jun 10, 2020

5 min read

From Countries to Companies — The New Space Race; Let’s Talk Space Travel

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On May 30th SpaceX made a series of historical firsts with its space program in yet another win for the seemingly unstoppable Elon Musk. The Crew Dragon spacecraft was placed atop the Falcon 9, marking the first time a crewed flight was launched using an orbital class reusable rocket; it was also the first crewed launch with a spacecraft designed and built by a private company. Furthermore, on board were two astronauts launched into space from U.S. soil for the first time since 2011, after the discontinuation of the Space Shuttle program.

Cost has long been the primary barrier to space travel. The Space Shuttle program was ultimately retired after it proved unable to achieve its goal of reducing the cost of launch. At an average of $170 million per seat, it was determined that over the course of its 30 years of operation it would have been cheaper to employ single-use rockets. Elon Musk believed he could be the one to crack the code on cost effective space travel and by all accounts he is well on his way. For the last decade, US taxpayers have paid upwards of $80 million for each seat on Russia’s Soyuz spacecraft. With the evolution of technology and good old fashioned Musk ingenuity, the average cost per seat on SpaceX’s Crew Dragon is $55 million. Is this an example of private capital’s efficiency over government? To be determined as Boeing’s Starliner is estimated to cost $90 million per seat showing there may be more to it. So, what is the secret to SpaceX’s success?

According to Musk, the “lowest cost you can make anything for is the spot value of the material constituents. And that’s if you had a magic wand and could rearrange the atoms. So there’s just a question of how efficient you can be about getting the atoms from raw material state to rocket shape.” Once built as cost effectively as possible, the second piece of the puzzle then becomes how to reuse as many parts involved in each launch. It would seem both in manufacturing and reusability, no other company can compete. China’s low-cost Long March rocket says it cannot beat SpaceX’s pricing. Even Russia has since complained that SpaceX is “price dumping” and cut its prices 30% in response. Russia’s decade long monopoly on space travel is finally getting some healthy free-market competition.

In terms of further cutting costs, SpaceX is notoriously secretive about its processes and designs, even going so far as to forgo the filing of any patents in an effort to maintain complete confidentiality. Musk’s perspective being that “We have essentially no patents in SpaceX. Our primary long-term competition is in China. If we published patents, it would be farcical, because the Chinese would just use them as a recipe book.” While little more is known about Musk’s secret sauce, we do know the most recent launch is just the beginning of his endeavor to make space travel affordable. His ultimate goal is to reduce the cost of launching the fully reusable 100 seater Starship to $2 million, with another $900k allotted for fuel. Should this be realized, each seat could feasibly cost as little as $29k. This project and many more in SpaceX’s arsenal, such as a shuttle that transports people and equipment between the International Space Station and the moon — have far reaching possibilities for humanity and beyond.

Jake Greenwald, Business Development

Virgin Galactic’s Space Ship Unity completed its first test flight last week out of Spaceport America. This marks an important milestone on Virgin’s way to commencing commercial space flights. The company intends to provide 2.5 hour suborbital trips to space and has already accepted 400 reservations and collected $50 million in deposits.

Spaceport America is built to be the world’s first commercial spaceport. It is owned and operated by the State of New Mexico and intended to be a hub of space travel, housing multiple space tourist operating companies. Current tenants include Virgin Galactic, Boeing, TMD Defense and Space, and UP Areospace.

It is difficult to talk about space travel without giving a shout-out to Douglas Adam’s The Hitchhiker’s Guide to the Galaxy. If you still haven’t had the pleasure, now may be the time.

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