Slashdot Mirror
Satellite Owner Says SpaceX Owes $50 Million Or Free Flight (reuters.com)
An anonymous reader quotes a report from Reuters: Israel's Space Communication Ltd said on Sunday it could seek $50 million or a free flight from Elon Musk's SpaceX after a Spacecom communications satellite was destroyed last week by an explosion at SpaceX's Florida launch site. Officials of the Israeli company said in a conference call with reporters Sunday that Spacecom also could collect $205 million from Israel Aerospace Industries, which built the AMOS-6 satellite. Spacecom has been hit hard in the aftermath of the Thursday explosion that destroyed the SpaceX Falcon 9 rocket and its payload. The Israeli company said the loss of the satellite would have a significant impact, with its equity expected to decline by $30 million to $123 million. Spacecom shares dropped 9 percent on Thursday, with the explosion occurring late in the last trading day of the week. Trading in the shares was suspended on Sunday morning, and the stock plummeted another 34 percent when trading resumed. In a conference call with reporters, Spacecom's general counsel Gil Lotan said it was too early to say if the company's planned merger with Beijing Xinwei Technology Group would proceed. Xinwei last month agreed to buy Spacecom for $285 million, saying the deal was contingent on the successful launch and operation of Spacecom's AMOS-6 satellite. The $200 million AMOS-6 satellite that perished in the explosion belonged to Facebook and was going to be used to beam internet to developing parts of the world.
What's with these summaries? Facebook had nothing to do with the spacecraft, other than the fact that they had an agreement in place to lease a significant portion of the Ka-Band transponders on the satellite.
...si hoc legere nimium eruditionis habes...
AFAIK the launch was insured. This does not include the static fire test.
A lot of satellites are not insured. Buying insurance means that you pay money to reduce financial risk. On average, you pay more than you would without insurance. That's how insurances make money. If you can afford the risk, you'll probably not want to pay for insurance.
Because integration of the payload onto the stack takes days to carry out and test - you simply cant do a test and then reintegrate the payload because that means much more time between the test and launch, which means the test is basically invalidated.
I'm not sure if the stack remains vertical after the test, but I would think that raising and lowering the stack to and from a vertical position introduces brand new variables all of its own (moving debris around internally etc).
Actually, it's simpler than that. If you have one, insure; rare failures mean insurance is cheap, and frequent failures mean you're taking a bad gamble trying to dodge that hefty premium. If you have one thousand, self-insure; you're approaching risk parity with general population, and insurance would have a lesser stabilizing effect.
Self-insurance doesn't really just save you money. In theory, it's marginally-cheaper than buying insurance; and in practice, many insurance companies charge below-cost premiums to buy an opportunity (you're trying to transfer a threat). Progressive Insurance Co., for example, charges $0.96 in premiums for every $1 paid out; they have an income of $1.02 for every $1 paid out because they buy stable investments and collect interest.
Even without that, you have the risk of coming in a standard deviation lower (opportunity: your failure rate is slightly-lower than average and saves you money) or higher (threat: your failures are frequent, and cost you money). When you have few repeatable risk events (e.g. one car), the difference is 100% of cost, often lopsided (e.g. the cost of insurance is 1% of cost). When you have many repeatable risk events (e.g. a fleet of cars), the difference is in a much narrower range, centered more closely around the cost of insurance (e.g. you can expect to pay 0.98%-1.02% versus insurance). Self-insurance is riskier than insurance, and avoids the cost of logistics to manage insurance, while providing opportunities (e.g. you can skip warranty service for a computer fleet and instead self-insure, and self-build, possibly saving costs if your IT helpdesk is frequently underutilized and has time to replace hard drives or upgrade components).
Support my political activism on Patreon.
The point is: SpaceX is cheaper than other space transport systems because it doen't sell you an insurance. When we compare SpaceX launch cost with (e.g.) ESA launch cost, we compare launch cost against launch and insurance cost.
Launch insurance is bookkept separately from launch cost. And you buy it from insurance companies. It typically costs five or six percent of the launch cost, depending on launch vehicle. http://www.cnbc.com/2016/09/01...
You ALWAYS pay more than the average risk is worth when you buy insurance.... Individuals who suffer an insured loss *sometimes* recover more than they have paid in premiums, but this is the exception.
In my 35 years as an insured motorist I have had 3 claims, two accidents and one hail claim. I estimate the TOTAL paid for these claims to be under $25K. In 35 years I've paid more than $1,000/year in premiums and I estimate that I've paid about 4 times the amount of the paid claims.
I'm keeping the auto insurance company in business.... They know that.... They make SURE you pay generally more than you cost them. You may be up on the house from time to time, but like the casino and gambling, the insurance company (the house) ALWAYS wins.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101