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« Oxymoron? | Main | Still Time To Change Your Mind, NASA »

7500 Launches

is the midpoint between the high and low scenario numbers that FAA chose for the Proposed Rule for Human Spaceflight Requirements for Crew and Spaceflight Participants to calculate how much of a burden the regulation would be. 7500 flights over ten years with one paying customer paying $200,000 would be $1.5 billion. Rocketplane is building a 4-seater expected to enter testing in 2006. Masten has a 5-seater on their product roadmap for some time after 2008. XCOR Xerus is a two-seater. The Spaceship Company has an operator who says they have $10 million in deposits for flying in a 7-9 seater. 7500 times 4 passengers would be $6 billion over ten years or $600 million/year.

Likely there will be higher prices early and more flights at lower prices later as operations become more routine, more suborbital vehicles get built and competition takes hold. If flight rates grow linearly from zero, we would get 1425 flights in year ten and even if the price drops to Futron's predicted 2015 price of $80,000 per passenger, we would substantially exceed the demand forecast by Futron if this prediction holds up. $500 million per year was a number they did not think would get hit until 2018.

If we double the Futron price estimates (they anticipated $100k prices at the start), we might double revenues, but that requires that all those launches have willing purchasers. (As I've said when Futron first released the study in 10/2004) since Futron doesn't include demand from games, this may be reasonable.

Put another way, reconciling Futron's passenger numbers with the FAA flight numbers, we get an average passengers per flight over ten years of only 2 passengers per flight.

The high estimate for suborbital flight rates by FAA was 10142 and the low 5081 with a 50% probability attached to each. These include test flights and non-passenger flights.

--Update 2006-01-04 04:56:00 CST--
And non-government orbital passenger flights.

Posted by Sam Dinkin at January 02, 2006 03:11 AM
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It just strikes me as unbelievable that 16% of responded people would pay 250,000$ for a suborbital flight. I know the Futron study says that right on page 13, but I would have hunched and imagined that a significant positive percentage would be high even for a price of 25,000$.

It shouldn't cost that much to pick a random sample of 2000 people and do another study to just be more sure.

Hell, if company X makes 10 vehicles with 100 million R&D (conservatively expensive!) and a cost of ten million a piece (very conservative too), and each flies 100 times (once a week for two years) with four passengers, it costs 200 million dollars per 4000 flights or 50,000$ per flight in investment costs. Of course, piloting, passenger testing and training, spaceport operations, overhaul, fueling, etc is not free, but still...

So - my common sense says that the price will be lower but the customer popularity will be smaller too.

Posted by meiza at January 2, 2006 02:19 PM

uh, the Futron study indeed had a wealthy survey pool: over 1 million net worth or over 250,000$ in annual income. I wonder how many such people live in the USA. Probably many anyway.

Still the 16% number sounds extraordinary.

Posted by meiza at January 2, 2006 02:26 PM

Linear growth seems unlikely to me.

Posted by Rand Simberg at January 2, 2006 02:51 PM

Step function growth with a underlying rise due to operations updates with a stochastic element with a cliff if there is a crash by one of the companies. Steps come from adding planes, adding engines and crews and adding companies and spaceports. So what do you like as an approximation? Exponential?

Posted by Sam Dinkin at January 2, 2006 03:46 PM

I assume that it will follow an S-curve of some parameters (and overlapped by other experiences, up to orbit and the Moon). What those parameters are is anyone's guess.

Posted by Rand Simberg at January 2, 2006 06:30 PM

Sounds like a good model to me Rand. Saturation (if only in the short term) of the market should be an aspect of the model. There might be a slight exponential rate in there too (due to the rise in global GDP adjusted for inflation).

Posted by Karl Hallowell at January 3, 2006 05:25 AM

When I read these numbers, I keep thinking of the SST and Concorde. Once people realize that they will be paying $200,000 for a glorified roller coaster, sales will drop off very rapidly.

Posted by Joe at January 3, 2006 08:55 AM

Once people realize that they will be paying $200,000 for a glorified roller coaster, sales will drop off very rapidly.

Sometimes it takes a long time for people to "realize" something that has no correspondence to reality.

Posted by Rand Simberg at January 3, 2006 12:37 PM

$250k annual income constitutes just less than 1% of all taxpayers in the US. A much much smaller number in the rest of the world.

Right on Joe, it strikes me as ridiculous that someone would give up 1/4 or 1/6 of their net worth to take a DANGERIOUS, glorified roller coaster ride. There are probably several marketing studies that would show that no one (except rock stars) spends that much on recreation. I bet Keith Moon would’ve done it! Civilian space travel will remain a stunt for at least 100 years, and maybe forever because there’s no place to go.

Posted by brian d at January 3, 2006 12:52 PM

It is assinine that some of you think the price will stay at $200,000 for any significant length of time. That is the price the Ultra Rich will pay for being first. There are already enough of those who have expressed a willingness to plunk down the cash to get the ball rolling.

Ever hear of an elastic demand curve?

How many will pay $50,000? $20,000, $10,000?

Did any of you pay $3,000 for a DVD player? Someone became an early adopter and paid the price. Someone drove the price down because now you can by one for under $30. How many of you don't own a DVD player?

The simple fact is the price will not stay at $200,000 for very long. I suspect it wil halve within the first year of operations. Anyone want to place a wager on that?

Posted by Mike Puckett at January 3, 2006 02:26 PM

I'll put $20 that says it stays >=$192,500 for all flights within one year of first revenue passenger flight. Or "Ever hear of monopolists?"

Posted by Sam Dinkin at January 3, 2006 02:42 PM


> Right on Joe, it strikes me as ridiculous that someone would give up 1/4
> or 1/6 of their net worth to take a DANGERIOUS, glorified roller
> coaster ride.

So, you take two data points (yourselves) and extrapolate your opinions to the entire human race? While dissing, of course, real data from a statistically significant sample?

Sorry, Brian. All your data shows is that you and Brian are not part of the group of human beings who will go into space.


Posted by Edward Wright at January 3, 2006 03:30 PM

An S curve can be parameterized to have a 1475/year endpoint. A single step step function at the end of year 5 would have an average of 1500 launches in only 5 years. The only continuous S curves radial symmetric going through (center) 5, 750 with integral 7500 with a lower max would have a higher min than 75.

For a wide variety of concave distributions starting near zero, (e.g., exponential, geometric), the max is more than twice the average of 750.

Posted by Sam Dinkin at January 4, 2006 03:34 AM

In case any one is actually interested

http://www.valuebasedmanagement.net/methods_bass_curve_diffusion_innovation.html

easy summary of probably the widest used new product adoption model. Not designed for 'really new products' but there we go. There is a lot of hand waving around how to forecast rnp's. The bottom line is that this is the only analysis situation when 'gut instinct' is as valid as anything else.

Posted by blairf at January 4, 2006 04:39 AM

Which comes back to the dangers and problems of using S curves. Rand, correctly, mentions the over lapped parameters but the timeline at the base can be anything you like too.

They're great tools, but they can be used to get pretty much any set of numbers you like to justify a business case. Historically, this has occasionally had fairly catastrophic results where the S curves made public by the market analysts have been significantly more optimistic that the actual market eventually supported.

Posted by Dave at January 4, 2006 05:04 AM

If about 1% of americans are that wealthy, it makes potential customers to be in the order of millions.
A percentage of them would be around ten thousands.

Maybe one can do incremental development with an even smaller "early adopter" base... And thus, you get profit, and the next generation craft might cost somewhat less to buy and operate per seatzerogminute or something.

Anyway, I couldn't be less interested in this mindless waste by the super-rich if it eventually doesn't lead to cheaper orbital payloads (via better, reusable first stages I'd guess). Only that is actually useful.

Posted by meiza at January 4, 2006 05:51 AM

Sufficent interest in suborbital 'rollercoasters' (and be mindful of amusement park attendance...a derisive anology may come back to bite you) will strongly suggest (if one isn't reasonably sure already) that these and other people will be a market for spending more time in orbit, given the option. 'Cheaper air payloads,' if you will, exist partly because of the tourist passenger market, as well.

Incremental (with various definitions of what those 'increments' might be) development is indeed what this is all about. Nothing will be gained by dissing any market that drives it.

As for providing a service/product for the 'super-rich,' (what would be a 'mindful waste?') yachtmakers seem to be doing okay, providing jobs for the less-rich, and contributing to the (income) tax base, when they're not being luxury-taxed out of business....

Posted by Frank Glover at January 4, 2006 02:33 PM

yes, I'm not interested in yacht-building for the rich nor do I follow blogs about the subject.

Amusement park rides cost much less (and offer less too) than a suborbital flight, actually so much that there's not much a point of analogy. About 4 magnitudes difference or what? I don't know the spent energy difference, but it must be big.

Also orbital flight is a bit far reach from this suborbital stuff, (5x speed or something) although rocket engine development can probably be somewhat shared, as was done with the original Navaho project, along other technologies. This time with focus on cost and maintainability!

I understand this important step approach, but it must be recognized as not the goal itself.
Just don't equate tourist suborbital "space" with orbital actually useful "space" (you know what I mean). It's intellectually dishonest.

Posted by meiza at January 4, 2006 06:20 PM


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