The launch delays are costing money. Note this, though:
Commercial satellite fleet operators have said that with a price differential so large — more than 50 percent in this case — they can absorb the cost of even lengthy SpaceX delays without much trouble.
They’re changing the rules.
There is, quite obviously, a strong demand for lower-cost access to space. That’s a good thing.
What’s not so good is that SpaceX is becoming notorious for long, long delays. In the case of Orbcomm, it’s not just Orbcomm; every week of delay for this launch is impacting every other launch on the SpaceX manifest (They have only one hanger, with room for one rocket, at Canaveral). Amongst other things, these delays essentially underscore ULA’s argument that SpaceX isn’t ready for government launches. With the F9 1.1 being new, this argument doesn’t have much impact -yet.
IMHO, SpaceX needs to iron the bugs out and up their launch tempo, otherwise delays will cancel out a good chunk of their price advantage, thus costing them business (plus massively impacting their cash flow via fewer launches per year). I’m not too concerned over this yet, because let’s face it, Falcon 9 1.1 first flew less than a year ago, so it’s a new system, and new launch systems tend to have major delay issues. (far more than F9,. in fact). My guess, SpaceX will start to face serious concerns if the F9 is still as buggy and delay prone by next summer.
I don’t think we can conclude anything about SpaceX’s future tempo from its past one (despite Jason Rhiann’s rant the other day). They’re still having growing pains, both in ramping up manufacturing and in operations. Range and weather issues don’t help, either.
No, the Total Cost Approach has been part of logistics in the commercial world for decades and time has always been money for commercial shippers. That is why men’s suits are often flown by B747 freighters to New York City rather than shipped by container ship. Its also why steamships, although more expensive, replaced sailing ships and trucks, although more expensive, replaced railroads for shipping time sensitive goods long distances. And non-commodities are always time sensitive.
It does no good to select the lowest cost option if your satellite doesn’t make it to orbit (insurance only covers replacement costs, not lost revenues), or makes it to orbit months late. On time delivery to orbit will become even more important when the Dragonlab starts flying for the biotechs, if Elon Musk ever gets around to launching it. When development and research cycles are measure in weeks a week’s delay could make the results of the experiment worthless to a firm. That is why the four year, and counting, delay for Elon Musk doing DragonLab means he will have to work hard to rebuild his creditability with the biotech industry it was designed for.
By contrast, the government and scientists live in a very different world and don’t really care when a payload makes it to Earth orbit and only cares for payloads going beyond Earth because of the launch windows for different destinations. So this is a key way that launch services for commercial markets will need to adjust from the habits they picked up serving government markets. If this a “change of rules” its a change that brings commercial space launch more in line with the economic rules that govern other forms of transportation where cost of the mode of transport is only one variable among many others.
If cost per ton/mile were the most important metric to business everyone would ship by rail except when barges were available. Similarly if cost per passenger/mile was the most important metric most folks would be riding passenger trains or riding buses instead of flying. This is why cost per pound to orbit isn’t as important as many space advocates believe when it comes to commercial space flight. That is “government” thinking. In the real business world reliability and frequency are also important to selection of a vendor for transportation services.
If SpaceX were alone in having schedule and delay issues, they might have a serious competitive problem. But other launch services providers have their own delay and schedule problems. ILS’s main problem is that, even after decades of service, the Proton booster fails every dozen launches or so. Arianespace, the – for now – launch services leader, is so expensive it has to launch two birds at a time to make either launch economically feasible. That makes every Ariane 5 launch customer a victim of any delays encountered by the other payload that will be launched along with theirs. Both ILS’s crummy quailty control and Arianespace’s compulsory payload pairing seem a lot more thoroughly baked into their respective corporate parents’ culture, methods and procedures than do the problems SpaceX has been having recently. It’s a little like an old anecdote about a well-into-his-cups Winston Churchill encountering a scandalized matron who admonished him, “You are drunk sir!” To which Churchill is alleged to have replied, “Yes, Madame, I am drunk. But you are ugly. And tomorrow I will be sober.”
I doubt this will be a problem in the long run. One of the main benefits Musk got from the Tesla Model S experience, IMO, was to learn how to do mass production of components. A lot of people said Tesla would not be able to ramp up production back then as well because previously they only did mostly manual assembly of small numbers of Tesla Roadster cars with a lot of outsourced components. Guess what they did manage to ramp up production of the Model S.
Of course it is not going to be easy or fast to do it for Falcon 9 and I have seen some manufacturing process improvements at SpaceX but nothing on the level of an organized assembly line for rocket engines or something like that. Yet. I suspect the main reason is that the Falcon 9 engine design was still in flux but with the Merlin-1D I think now they have something ready for mass manufacturing on the cheap.