SpaceX Signs MOU on Military Launches, Confounds Chinese on Pricing

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SpaceX's Falcon 1 rocket

In SpaceX related news, the California start-up has an agreement with the military concerning the launching of national security payloads. Meanwhile, it’s rock bottom launch prices are confounding Chinese officials.

 

Space News reports:

The three biggest U.S. government satellite-buying agencies have concluded a memorandum of agreement to establish rules permitting startup launch-services provider Space Exploration Technologies (SpaceX) to launch U.S. Air Force and other national security satellites, a U.S. Air Force official said April 14.

Air Force Under Secretary Erin C. Conaton, in a speech delivered to the National Space Symposium here, said the memorandum, signed by the heads of the Air Force, NASA and the U.S. National Reconnaissance Office (NRO), should be released this summer.

The agreement “is designed to ensure a consistent position on opportunities, certification and requirements for potential new entrants to space launch,” Conaton said in her speech, which in her absence was read by Richard W. McKinney, Air Force deputy under secretary for space programs….

Briefing reporters after the speech, McKinney said the policy will set out hurdles that SpaceX will need to clear before its Falcon 9 Heavy rocket, now in development, is permitted to join the Boeing-Lockheed Martin joint venture, United Launch Alliance (ULA), in placing national security payloads into orbit.

Meanwhile, Chinese space officials so they are flummoxed by the low prices that SpaceX is offering on its launches:

Declining to speak for attribution, the Chinese officials say they find the published prices on the SpaceX website very low for the services offered, and concede they could not match them with the Long March series of launch vehicles even if it were possible for them to launch satellites with U.S. components in them.

According to the SpaceX website, launch on a Falcon 9 — which has an advertised lift capacity of 10,450 kg. (23,000 lb.) — from Cape Canaveral costs $54 million – $59.5 million.

Last weekend, I heard a NASA official praise the company for its cost-effective approach to developing and flying their rockets. SpaceX is definitely leaner than some of its rivals. Others I have talked to wonder how SpaceX can make money at the prices the company is quoting, much less do so while maintaining the high level of quality required for launching valuable payloads.

I see a bit of Silicon Valley in the approach. You build lean teams and offer your software and services developed here are often offered at very low prices, if not for free. The goal is to acquire market share while driving out slower, higher-cost rivals. The greater the market share, the better it is if decide you want to become acquired.