Ariane Chief Seems Frustrated With SpaceX For Driving Down Launch Costs (arstechnica.com)

schwit1 shares a report from Ars Technica: Like United Launch Alliance, the [France-based] Ariane Group faces pricing pressure from SpaceX, which offers launch prices as low as $62 million for its Falcon 9 rocket. It has specifically developed the Ariane 6 rocket to compete with the Falcon 9 booster. But there are a couple of problems with this. Despite efforts to cut costs, the two variants of the Ariane 6 will still cost at least 25 percent more than SpaceX's present-day prices. Moreover, the Ariane 6 will not fly until 2020 at the earliest, by which time Falcon 9 could offer significantly cheaper prices on used Falcon 9 boosters if it needed to. (The Ariane 6 rocket is entirely expendable). With this background in mind, the chief executive of Ariane Group, Alain Charmeau, gave an interview to the German publication Der Spiegel. The interview was published in German, but a credible translation can be found here. During the interview, Charmeau expressed frustration with SpaceX and attributed its success to subsidized launches for the U.S. government.

When pressed on the price pressure that SpaceX has introduced into the launch market, Charmeau's central argument is that this has only been possible because, "SpaceX is charging the U.S. government 100 million dollar per launch, but launches for European customers are much cheaper." Essentially, he says, launches for the U.S. military and NASA are subsidizing SpaceX's commercial launch business. However, the pay-for-service prices that SpaceX offers to the U.S. Department of Defense for spy satellites and cargo and crew launches for NASA are below those of what other launch companies charge. And while $100 million or more for a military launch is significantly higher than a $62 million commercial launch, government contracts come with extra restrictions, reviews, and requirements that drive up this price.

Comments

Isn't Arianespace government-subsidized?

[93 Escort Wagon]

This really seems like a case of the pot calling the kettle black. Which company is more heavily subsidized by their respective government(s), overall?

Re: Isn't Arianespace government-subsidized?

[Anonymous Coward]

Actually it would be such a case if this was about ULA who was being paid multiple times what spaceX was for the same thing. Ariane and the traditional companies like Boeing had a sweet sweet deal all these years, that's why they have trouble competing

Re: Isn't Arianespace government-subsidized?

[Rei]

They've suffered from the same program that NASA itself has, albeit to a lesser extent: they're jobs programmes. Part of their rationale for existing is the number of people they employ, and how their business operations are spread around politically-convenient areas. Same story for both Ariane and UAW. As Charmeau put it:

"Let us say we had ten guaranteed launches per year in Europe and we had a rocket which we can use ten times - we would build exactly one rocket per year. That makes no sense. I can not tell my teams: "Goodbye, see you next year!" "

In any normal business, in a competitive environment, focused on its bottom line, this would mean that you need to downsize 90% of your staff. If you're over capacity, you don't just stay over capacity for the heck out of it, or build hardware that's 1/10th as labour efficient just to justify keeping as many employees on the books as possible. It's an absurdity, but that's been the way the launch industry has operated for the past decades. Improved designs have been bad specifically because they'd streamline the industry.

But they got away with that specifically because there was such a capital barrier to entry in their industry. Lots of small companies had tried and failed. Some because their designs didn't really pan out, but some simply because they just couldn't get enough cash. Established players became dismissive of upstarts as a result - but it was really just a matter of time.

This lesson should be applied to a lot more capital-intensive industries than just rocketry. Thinking of capital barriers to entry as your uncrossable moat is a dangerous attitude.

Re: Isn't Arianespace government-subsidized?

[Rei]

SpaceX's success is a mix of factors. Part of it is that they did take a good design approach - combining both reusability and disposability and mass production into a single rocket line. Many identical (or near identical engines per rocket), and many rockets produced, means a very large number of engines, meaning you get good at making them, cheaply. Very similar upper and lower stages, and again a large number of rockets, means - again - you get good at making them cheaply, and can quickly go through development iterations. Any accidents in the development process, while painful, only take out a single disposable launch vehicle and its payload (accidents are much more painful for obligate-reusable rockets). Eventually you get a good, cheap-to-manufacture rocket with a lot of flight hours. If you can then have that same rocket then become reusable... the game is changed.

Most new "game changer" designs have called for just one of the above philosophies. OTRAG, for example, was based around the idea that mass production of identical stages as cheaply as possible. It was to have terrible performance (and certainly no reusability), but be so cheap to make that it would overcome this. Skylon, on the other end was to go high-tech and be so affordably reusable that you could use it like an airplane. OTRAG, for its part, would have been inherently limited in its ability to lower launch costs (if at all) due to the veritable skyscraper of stacked stages you have to build, which are trashed each time. Skylon would have gotten almost no mass production benefits, a much slower learning curve, and any accident would have taken out a launch vehicle that is not cheaply replaceable. SpaceX's choice of the middle ground rather than going hard toward either philosophical extreme really seems to have been the wise choice.

That of course doesn't mean that SpaceX's approach is the only one that could have worked. For example, I kind of like the idea of launching rockets as floating spar platforms. It means you have to build them capable of withstanding saltwater exposure (more restrictive alloy and design selection) and deal with engine-water interactions at launch. But it means you have no diameter restrictions due to overland transport (make it as big as you want!), nor any pads to damage if something goes wrong - just tow, fill, and go. As an example. But what matters is, SpaceX's approach turned out to be a good one. And this combined with the "we can't fire people" environment that its competition operated in, once SpaceX had crossed that capital moat, the writing was on the wall.

Re:Isn't Arianespace government-subsidized?

[K. S. Kyosuke]

For the record, Ariane 5 is literally subsidized to fly.

Re: Isn't Arianespace government-subsidized?

[jabuzz]

Thing is Skylon is progressing and should it get to flight then SpaceX would be under the same pressures as Ariane and ULA are now.

A better gamble than Ariane 6 would have been to go full on with Reaction Engines/Skylon. However Brexit has probably screwed that option now. With space in Europe going down the pan over the row about Galileo, where I predict the next step is the UK government will stop UK firms exporting the tech needed to run it to Europe because they are sticking to the rules about none EU countries being able to access it, crippling the system before it even goes live.

Re:Isn't Arianespace government-subsidized?

[msauve]

He's French. He should know you can't make good whine with sour grapes.

Re: Isn't Arianespace government-subsidized?

[dunkelfalke]

Your logic only works if every staff member is capable of doing the job of every other staff member, which is fine for picking strawberries, but not for mechanical engineering and manufacturing. It is not an absurdity, you need at least a certain amount of engineers and other specialists to design complicated systems and also enough workers to build parts and assemble the rockets. If it takes a month to build a rocket, then the same amount of personnel is required for manufacturing for 10 launches per year as for just one launch since the manufacturing would be serial, not parallel.
Apparently you don't know the difference between low and high volume manufacturing and between skilled and unskilled jobs.

Re: Isn't Arianespace government-subsidized?

[cjameshuff]

Falcon 9/Heavy has already achieved most of Skylon's cost reductions without requiring $10 billion to develop, and can improve further if fairing reuse works out. Worse, BFR is expected to achieve around the same recurring cost per flight as Skylon while having the ability to deliver 9 times as much payload, and also being able to use in orbit refueling to deliver the full payload to higher orbits without using an expendable upper stage. And BFR doesn't require any revolutionary new technologies, making it much more likely to actually hit those cost targets, and will be flying much sooner even with delays.

If they can turn Skylon into a staged vehicle, they might be able to compete, but still won't be pressuring SpaceX like they are doing to the competition now.

Re:Isn't Arianespace government-subsidized?

[jellomizer]

Being that governments are the high user of Space Crafts, subsidizing really isn't benefiting them. Because they are paying them out of tax payer money to save on a launch out of tax payers money?

You also make it sound like government subsidies are a bad thing. One of the highest markets for subsidies is the Agriculture industry which helps to make sure American Food supply is there, and supporting farmers for bad seasons. So they will be able to operate the next season.

Re:Isn't Arianespace government-subsidized?

[Anonymous Coward]

Being that governments are the high user of Space Crafts, subsidizing really isn't benefiting them.

What they are subsidizing the continued knowledge and experience of scientists and engineers who make rockets. Why? One man's space rocket is another man's ICBM.

Re: Isn't Arianespace government-subsidized?

[Anonymous Coward]

Both receive government money. Spacex used the money to build a reusable rocket that drastically lowers costs. Arianespace spent the money building expensive expendable rockets that were designed to use parts and labor from as many different European countries as possible.

Re:Isn't Arianespace government-subsidized?

[93 Escort Wagon]

You also make it sound like government subsidies are a bad thing.

No, I talked about subsidies because Charmeau complained that SpaceX was able to offer lower prices to European customers than Arianespace because the cost of SpaceX’s US government launches are supposedly subsidizing part of the cost for those other launches. In this context, it’s irrelevant whether you consider subsidies good or bad... the point is the Ariane program is hugely subsidized, so complaining about any SpaceX subsidy is hypocritical.

Re:Isn't Arianespace government-subsidized?

[TommyNelson]

This really seems like a case of the pot calling the kettle black.

I agree. I was going to write something along the lines of "cry me a river" ;-) The market is changing and regardless of the causes, you either adapt or you fail.

Re:Isn't Arianespace government-subsidized?

[rogoshen1]

This is why we have corn byproducts in our gasoline to say nothing of our food.

When industry starts looking for places to stuff output from subsidized agriculture, perhaps it's time to cut back on the subsidies eh?

Re:Isn't Arianespace government-subsidized?

[jythie]

Is that actually hypocritical though? They do not seem to be complaining that a subsidy exists, but that the current structure is making it difficult for them to compete within their structure. It is perfectly valid to go 'hey, their government is helping them more than our government is helping us and it is hurting how well we service our domestic markets'.

Re:Isn't Arianespace government-subsidized?

[Impy the Impiuos Imp]

This really seems like a case of the pot calling the kettle black. Which company is more heavily subsidized by their respective government(s), overall?

The City of Romulus, which runs Detroit Metro airport, built a new, giant parking structure and extended lot as part of a modernization and new terminal.

The surrounding private lots still charged less, enough so peoe put up with the inconvenience of a mile+ extra bus ride.

So the city added a 30% "Government is grossly inefficient" tax on those lots that it, itself, of course didn't have to pay.

I'm sure France would try to do the same to SpaceX if it could. This is not the thing to do if we are ever to get space travel and living in space ala some science fiction future into self-supporting private hands.

See also: travel to and exploration of the New World, The Internet, etc.

Re:Isn't Arianespace government-subsidized?

[prefec2]

ESA gets a lot of state money, but it is the European Space Agency so the NASA lookalike, but with a much smaller budget. There is some support for the development of the Ariane rockets from and through ESA and European states. However, SpaceX does a vast number of launches for the USA military and state, while the EU does not subsidize the flights by paying higher prices for their launches. For example, for the Galileo (GPS) satellites, the EU use Soyuz rockets from Russia starting from the Korou. So indeed there are more subsidies in the US for development and launches than in Europe.

Re: Isn't Arianespace government-subsidized?

[chispito]

The primary military case is for spy and com satellites. The governments we're talking about have ICBMs aplenty, just waiting to go. Orbiting a new satellite requires the maintenance of much more infrastructure at this point.

Re:Isn't Arianespace government-subsidized?

[angel'o'sphere]

the point is the Ariane program is hugely subsidized, so complaining about any SpaceX subsidy is hypocritical.
No, that is not the point.
The point is (at he claims so) that Space X sells launches in the US for 100M to government and for 50M to european customers. And that has a name, it is called dumping.

Obviously the European Space Agency is subsidized: it is a fucking government organization. But it is supposed to write a black zero at the end of the fiscal year. Which it can't if it gets put out of business by a guy who does not like competition. Or we have to subsidize them more, until it is just to expensive for the tax payer.

Elon should simply charge the same price for everyone and invest the gains he makes instead of driving the guys from the market who created the market.

Re:Isn't Arianespace government-subsidized?

[angel'o'sphere]

ESA is not France. It is European.
The CEO happens to be a French, and the launch site is technically in France, French Guiana (South America).
So, no: France can't just raise a tax. And Europe neither. Imagine the outcry if Europe would put a "sales tax" on a launch made by an american company on american soil, just because the customer is a European? WTO would jump us ... but well with current "dumping practice" the WTO probably jumps Space X, who knows ;D

Re:Isn't Arianespace government-subsidized?

[tlhIngan]

And that has a name, it is called dumping.

It's only dumping if SpaceX is offering launches below the cost of the launch. If SpaceX is breaking even or worse, making a profit at $50M, it's not dumping.

SpaceX charges $62M for a commercial launch. The only reason they charge $100M for a government launch is because a government launch comes with a whole pile of conditions that SpaceX feels costs them an extra $38M to fulfill.

Presumably, at $50M, they're still making money, perhaps attracting a lot of commercial interests. It's more of an "introductory rate" to EU customers. The problem is Ariane can't compete - they don't have a rocket capable of such cheap costs, and the one in development costs 25% more. Even at $62M for "regular rate" it's still too cheap. (Even the governmental rate is cheaper than ULA and others).

Re: Isn't Arianespace government-subsidized?

[painandgreed]

This lesson should be applied to a lot more capital-intensive industries than just rocketry. Thinking of capital barriers to entry as your uncrossable moat is a dangerous attitude.

The lesson that came to my mind when I read TFA, was "develop a product to canabalize your own market, because if you don't, somebody else will."

Re: Isn't Arianespace government-subsidized?

[kellymcdonald78]

Ya, the biggest killer for Skylon is it's amortized development costs.

Re:Isn't Arianespace government-subsidized?

[kellymcdonald78]

SpaceX doesn't charge the same, because the service is the same. For Government launches (DoD, NASA, NRO etc) there is considerable additional requirements, paperwork and oversight that need to be met. These incur additional costs above and beyond commercial launches

Re: Isn't Arianespace government-subsidized?

[roc97007]

Actually it would be such a case if this was about ULA who was being paid multiple times what spaceX was for the same thing. Ariane and the traditional companies like Boeing had a sweet sweet deal all these years, that's why they have trouble competing

Trouble, or lack of incentive?

Re: Isn't Arianespace government-subsidized?

[roc97007]

> Thinking of capital barriers to entry as your uncrossable moat is a dangerous attitude.

Cable TV companies, for instance.

> In any normal business, in a competitive environment, focused on its bottom line, this would mean that you need to downsize 90% of your staff.

So be a smaller company, that gets more done cheaper. Or put some of that excess staff on R&D, and see what else can be done. New methods of propulsion, more reliable, longer lasting, and self-maintaining life support systems. Put the "reusable" idea to work on the idea of really long trips. There's still a lot to do in space travel. Building single-use earth-orbit rockets just to keep people employed doesn't make sense.

Re: Isn't Arianespace government-subsidized?

[roc97007]

The lesson also might be, "redefine the market, or make a new market".

Re:Isn't Arianespace government-subsidized?

[roc97007]

But as someone else said, this may be sour grapes. SpaceX built cheap, reliable, reusable rockets. They put quite a bit of time and money into those three aspects. It's paying off now. Ariane's huge disadvantage at this point is that they sunk everything into single-use rockets, and it's (probably) too late now to catch up.

Re: Isn't Arianespace government-subsidized?

[roc97007]

Yes. It *is* arguably a problem with how the government is spending its money. If you've ever worked in the defense industry (I spent 7 years with a military contractor, until I got frustrated and quit) you'd see that this is exactly how it is. Doing work for the government vs commercial requires a massively larger amount of overhead. Whether it *should* or not is an interesting but separate debate.

Re:Isn't Arianespace government-subsidized?

[roc97007]

"...and someday we'll tell our children that we burned our food for fuel..."

Re:Isn't Arianespace government-subsidized?

[Aereus]

64% of the capital investment is from France, with another 20% coming from Germany. Rest is peanuts spread across a dozen other countries.

Re:Isn't Arianespace government-subsidized?

[Aereus]

To me it reads that they both got subsidies, its just SpaceX spent theirs more wisely. Nothing was stopping Ariane from designing a more efficient rocket before now. They only started doing it after SpaceX started eating their lunch. That is their fault.

Re: Isn't Arianespace government-subsidized?

[prefec2]

I would recommend going to the WTO and let them clarify who is subsidizing whom with how much. Anyway, both sides will subsidize their space access as an strategic asset. Especially with Trump in the White House the EU will not stop supporting ESA and Arianespace.

Re: Isn't Arianespace government-subsidized?

[Bruce Perens]

The last time I had an ARPA contract, we had to hire a part-time accountant just for that one contract. We had 6-7 developers total. There really is a vastly increased compliance and accounting responsibility when you have a government contract vs. a commercial one. This is in part because so many people have ripped off the government that they have to check everything.

Re:Isn't Arianespace government-subsidized?

[Bruce Perens]

Well, sort of. But ICBMs are solid-fueled, because they have to be ready all of the time. Conventional rockets are liquid fueled and take half an hour to load with fuel, minimum, before launch.

Now, if you know how to make one you are a good deal on the way to make the other. But they're not really the same.

Re: Isn't Arianespace government-subsidized?

[Shotgun]

I actually like that better than detonating the payload 3,00ft above ground to demonstrate how much damage can be done.

Re: Isn't Arianespace government-subsidized?

[Shotgun]

Go to http://www.aircraftspruce.com/
Look at the various choices for aircraft batteries. Be clear that all of these are various sizes of lead plates inside a plastic container and bathed in sulfuric acid.
Look at the prices for "certified" or STC'd batteries, vs the "experimental" batteries.

That is the cost of your government paperwork.

(and it is approximately 2x)

Re: Isn't Arianespace government-subsidized?

[jabuzz]

Thing is Skylon has not had $10 billion dollars. In fact it has had less money that SpaceX. It recently got $125 million (might have be GBP) to develop the engine. But hey don't let facts get in the way.

Re: Isn't Arianespace government-subsidized?

[cjameshuff]

Those pesky facts:
Reaction Engines got £60 million, about $80 million, to develop a test engine to demonstrate the basic propulsion cycle. That does not get Skylon anywhere close to flight hardware. The first test flights are roughly 7 years into the future, should someone decide to pour another $10 billion dollars (closer to $12 billion really) into development, at which point Skylon's launch costs will be an order of magnitude higher than BFR's. Good luck getting those billions.

The SSTO Skylon being discussed today is totally irrelevant to SpaceX. A staged vehicle might be viable, but air breathing is fundamentally a much more complicated approach for very little gain, and is unlikely to translate to any cost advantage.

Re: Isn't Arianespace government-subsidized?

[rmayes100]

This site claims Falcon 9 already has Skylon beat price wise (just with block 5). Falcon Heavy and BFR have it beat by a lot: https://www.nextbigfuture.com/...

Re: Isn't Arianespace government-subsidized?

[cjameshuff]

Oof. I thought that unit cost for Skylon was unrealistically high. Turns out it's from a Reaction Engines paper published at IAC 2014, which assumed a 5 billion Euro subsidy for 50 vehicles. It's actually one of the lower numbers in the paper. Others:

~$11 B in airframe development cost
~$6 B in engine development cost
~$700 M in upper stage development cost
~$1.3-2.1 B per spaceport

PDF: https://forum.nasaspaceflight....

Re:Isn't Arianespace government-subsidized?

[GuB-42]

Ariane is also heavily subsidized. However, they are complaining that SpaceX is subsidized by a government with a larger budget, which allows them to do economies of scale, which, in turn makes them more competitive for their non-subsidized commercial market. In particular, that their market is too small to make reusable rockets worthwhile, because NASA isn't there to guarantee them a significant amount of launches.

Still sounds like whining to me. Especially since I doubt that European governments will allow Ariane to fail. Launchers are important for strategic reasons.

Re:Isn't Arianespace government-subsidized?

[cheesybagel]

There were European proposals for reusable rockets, but the ESA member states refused to fund them. One of those proposals in the FLPP was to have a LOX/Methane reusable flyback first stage with an expendable upper stage. Sounds familiar?

Re:Isn't Arianespace government-subsidized?

[angel'o'sphere]

And, how is that relevant?

Subsidizes come mostly from ESA: https://en.wikipedia.org/wiki/...
There France and Germany are on par regarding contribution.

Re:Isn't Arianespace government-subsidized?

[angel'o'sphere]

Of course they can't compete with the cost.
But the article claims that Space X is selling below cost and makes it even harder (no idea if that is true).

Anyway, there is no one on the planet who can compete with Space X launch costs at the moment.

Think of the Ada

[AHuxley]

All that quality Ada space code needs support.

Excuses

[Anonymous Coward]

I'm from Europe and I'm thoroughly embarrassed by this guy. Yes, SpaceX is subsidized by the US government, but his company is subsidized by European governments. And his claim that it's only the subsidies that drive the costs down is ludicrous. Sure, subsidies help with development costs, but it's not like SpaceX doesn't make a profit off of commercial launches.

I do agree that a monopoly by SpaceX would be bad (which btw. even Musk agrees with), but the cure for that is to be innovative yourself, not to cry about others.

The main difference I see here is that SpaceX is an actual company that can make decisions based on what the best for the company is, while Ariane is the typical state-originating pseudo-company where politics plays a way too direct influence.

SpaceX provided actual innovation in a field that was stagnant for a long time. The correct answer here is to be innovative yourself in different ways, not to whine about it. And who knows, maybe a different company will out-innovate SpaceX in the next couple of years. But from the looks of it that company isn't going to be Ariane.

Re:Excuses

[Rei]

I'm also embarrassed by him. Ariane is our equivalent of ULA. A dinosaur. And we have no SpaceX or Blue Origin in the wings, and an environment that I don't think would ever create one. Ariane will never adapt. It's structurally incapable of it. And it doesn't help that Europe spends a small fraction as much on space as NASA does. So we can't endlessly make up for inefficiency with pork.

And yes, in general SpaceX puts in bids a lot higher for the government than they do for private companies, but so? They can make their bids whatever they want. The government is choosing them because they're still cheaper than ULA. Whatever ULA bids, SpaceX will undercut them - even though that undercutting is still a windfall for SpaceX. What alternative does the US government have? Maybe there will be a serious drive-down-costs bidding war when (if) Blue Origin ever makes it onto the scene in a serious way. Maybe. I'm not a big Blue Origin optimist - but at least they're not ULA.

Re:Excuses

[Anonymous Coward]

Don't worry. If those yankees dare to endanger our superior European industry we will fine them and break them up and do all the other things we Europeans do.

Re:Excuses

[angel'o'sphere]

You missed the point.
Space X sells flights to the US government for 100M and the exact same flight for an European customer for 50M. So obviously Adriane/ESA can not compete with that, and that is not a question of costs or price, but: dumping

The correct answer here is to be innovative yourself in different ways
Yes, but they can't do that if Space X bankrupts them. If you had read further: the market at the moment is to small that ESA can invest into reusable vehicles. Because then the workers at ESA would only work 3month a year.

The matter is not cost or subsidizing, the matter is price dumping.

Re:Excuses

[GPS Pilot]

we have no SpaceX or Blue Origin in the wings, and an environment that I don't think would ever create one.

What do you think about Skylon? SABRE will be tested here in Colorado very soon...

Whatever ULA bids, SpaceX will undercut them - even though that undercutting is still a windfall for SpaceX. What alternative does the US government have?

Why would the US government even want an alternative to that terrific situation? : )

Zut Alors!

[Freshly Exhumed]

Our beezness plan eez faileeng par ce-que les maudits americains! We must faaaaart in zehr zheneral deerection!

Re:Zut Alors!

[K. S. Kyosuke]

We must faaaaart in zehr zheneral deerection!

Indeed, they are designing a methane engine now.

Re:Zut Alors!

[SCVonSteroids]

"Ok take a nap.... Zen fire zee missilez!!"

Re:Zut Alors!

[Eloking]

"Ok take a nap.... Zen fire zee missilez!!"

And Russia's like : "ARRRHHHHH MOTHERLAND!!!!"

Re:Zut Alors!

[SCVonSteroids]

"But they'll all be dead soon........... fucking kangaroos."

Essentially, it is the same old Boeing "success"

[Anonymous Coward]

story that is in most economics 101 textbooks - if the market is of the right size and unregulated, a huge government subsidy can help a company take the lead and stay there. Boeing dominated the aerospace market in the 60s and the 70s because of what would now be considered under WTO rules illegal subsidies, and killed off most other aerospace companies. That was the case until Airbus was created and sponsored by three European governments -- and the monopoly market of Boeing became the Boeing-Airbus duopoly. In space, it is almost the same - all launch business is sponsored, and the company that survive and dominate will probably be the one with the largest sponsors.

Nothing new under the sun.

Subsidised industry == Industrial polictics

[upuv]

One of the most significant differentiators is that when governments control the funing paths of industry they also control decision making in the industry.

SpaceX is independent and makes their own decisions. They just happen to have written a screw the feds contract that brings more money in.

NASA is a government run industrial institution. It's priorities are set by politicians. But in order to maintain funding other decisions are made to favor the politicians. For example where are the NASA jobs going to be located? The answer is a political one. Where are parts going to be developed, tested, assembled etc. All political answers.

The politically driven process is inherently more expensive. Simply because the most efficient and cheapest way to conduct business is usually not the chosen path.

With the Ariane 6 the proposal on the board is that Ariane plans to buy out the government stake in the company. Thus freeing it to directly compete on a level footing.

All credit to the government sponsored space programs over the decades. They created the seed tech and the science that is now being capitalized by the private industry.

Re:Subsidised industry == Industrial polictics

[Rei]

They just happen to have written a screw the feds contract that brings more money in.

I'm totally going to have to steal this wording at some point ;)

Re:Subsidised industry == Industrial polictics

[Anonymous Coward]

The difference isn't so much cost as it is about flexibility. A government run organization usually is a lot more bureaucratic, lots and lots of red tape and risk adversity. And btw this goes double for the French. This isn't in itself necessarily bad, however, since things rarely go completely off the rails that way.

(I know Americans probably are going to point to bad gubernmint or the Soviet Union at this point but that another thing. The first is about paranoia, and the second about rampant corruption, but I digress.)

The problem this brings though is that if you take no risks you're not going to make any breakthroughs either which can potentially put you in a really bad spot when you're up against someone who has completely changed the game. In this case it means that Ariane would never come up with the idea of a reusable rocket which lands back on earth on a barge in the middle of the ocean - ever. And that's just the big picture. I bet there are many, many other smaller differences where SpaceX has taken a different, high risk/reward path, whereas Ariane has played it safe. And it all adds up. Effectively you could argue that Ariane kind of brings a magnificent, highly refined knife to a gunfight.

TL;DR: SpaceX is a huge gamble that paid off. Bureaucracies doesn't gamble, and consequently rarely hits the jackpot.

Re:Subsidised industry == Industrial polictics

[Anonymous Coward]

Look, an ignoramus, on slashdot! Who would have guessed?!

Government agencies are usually less efficient not because they are wasting money, but because they are usually tied down by large amounts of regulations and rules which does not apply to normal businesses, plus that they are more susceptible to meddling from absolute amateurs (that would be your average politician). They tend to very well in static settings where you want reliability and predictability, not in highly dynamic ones were you're continuously chasing the next big thing, or "the great breakthrough". Not because they are lazy or incompetent, but because they are saddled with delivering stuff that works, not playing around with things that could give a huge payout.

But, how interesting are facts when you can get to rail against the evil gubernmint?

Re:Subsidised industry == Industrial polictics

[green1]

In an ideal world that would be true. But what we see in reality is the worst of both worlds. It's not truly government enterprise because they outsource everything to private companies (who do need the profit margin) but it also isn't as efficient as the free market because those contracts are chosen for political reasons instead of efficiency reasons, and the requirements imposed on those companies are incredibly onerous and drive costs through the roof.

I think that you could have an efficient government enterprise (Ok, this one may be far fetched, but it should be possible), and you can have an efficient private enterprise, but I really don't think it's possible to have an efficient combination of the two.

Re:Subsidised industry == Industrial polictics

[sfcat]

The politically driven process is inherently more expensive. Simply because the most efficient and cheapest way to conduct business is usually not the chosen path.

Where are all the lefty slashdotters who should be jumping in to point out that government is inherently more efficient than private enterprise because it doesn't have to add a profit margin to its costs?

They are in a health care thread where that's actually true. Its also true that without the space race (a government/political event), private industry would likely be nowhere with space tech. But industries mature and require different amounts of regulation and guidelines at different points. Its almost as if being ideological about such points ensures that you are wrong part of the time, but that can't be it...

Re:Subsidised industry == Industrial polictics

[swillden]

The politically driven process is inherently more expensive. Simply because the most efficient and cheapest way to conduct business is usually not the chosen path.

Where are all the lefty slashdotters who should be jumping in to point out that government is inherently more efficient than private enterprise because it doesn't have to add a profit margin to its costs?

They are in a health care thread where that's actually true.

I don't believe that's true. It's hard to say for sure, because no rich nation has tried a free market health care system since medicine came into its modern form and capability. The US has a particularly nasty mixture of regulated and market structures, with government payers effectively establishing price floors rather than ceilings, providers being forced to provide care for free which they must amortize across their paying patients, the fact that this free care is all emergency service rather than preventive care where it would be much cheaper in most cases, paying patients generally being price-insensitive due to the fact that their insurer is covering the bulk of the costs, and much more.

I think a truly free market healthcare system could be very efficient, though there are some obstacles. One is that the nature of modern healthcare is sufficiently complex that price comparison shopping is hard. Another is the mandatory and urgent nature of care in many cases. I think those could be managed, though. The biggest obstacle is a moral one: A truly free market health care system would have to allow providers to turn people away when they cannot pay. Since we as a society are unwilling to allow them to do that, free riding will always be a huge problem, which in turn leads to most of the misaligned incentives that create all the rest of the issues.

My conclusion is that we'll never accept the requirements of a real free market in healthcare, and the semi-regulated mishmash we have is even less efficient than single-payer, so I support single-payer, at the state level.

Its also true that without the space race (a government/political event), private industry would likely be nowhere with space tech.

I don't believe that's true, either. Oh, certainly, private industry would never have engaged in the space race in the 60s, but that's because that was purely an international pissing match, and there's no reason private industry would throw hundreds of billions into that sort of hole. But at the point where we started to see actual economic benefit from space launches (communications and navigation satellites, mostly), I see no reason why private industry wouldn't have begun investing. They'd have taken a radically different approach than the powers in the Space Race did, starting with the smallest, cheapest rockets that could launch a useful payload, and it's very unlikely that they'd have been putting people in space even now (though perhaps ideologues like Musk would be doing it). But I think we'd have satellites in space now even without any government involvement.

Its almost as if being ideological about such points ensures that you are wrong part of the time, but that can't be it...

Ideology is the enemy of rationality in many cases, true.

Re:Subsidised industry == Industrial polictics

[angel'o'sphere]

A truly free market health care system would have to allow providers to turn people away when they cannot pay.
For that you have health insurance.

What has a free market, on the side providing the services, to do with not having a health insurance for the people who require the services?

A free market is supposed to drive the prices down. Obviously a free market (with no regulations) can not work in the health sector: you would pay everything to help your little daughter if the asshole doctor demands it. That has nothing to do with costs or competition ... if it takes 6hours to drive your little daughter into a cheaper hospital, but she dies in 4h, you pay what ever he wants. And if it took only 2hours, the next hospital will have increased its price, just for you. Because: now you have understood that you have to pay what they demand or your daughter dies now in only 2h!!

Re:Subsidised industry == Industrial polictics

[swillden]

I don't think you read the comment you replied to. I addressed all of the points you raised.

Re:Subsidised industry == Industrial polictics

[Shotgun]

Actually, you're missing the largest piece of what makes government operations inefficient: the lack of incentives for efficiency.

The cost of misaligned incentives is much larger than the cost of a profit margin. There are a nearly infinite number of ways to organize and run an operation of any signficant size, even more so when the purpose of the operation is to accomplish highly-technical tasks. This means there are huge numbers of choices to be made, every one of which involves balancing of various concerns, so incentives are critically important. The OP mentioned on particularly nasty set of bad incentives that nearly always exist in politically-controlled processes, but there are lots of others.

I'd like to emphasize a this point with a very specific example.

I was hired on to write automated tests for a piece of software used to do cognitive testing (to see if people were suffering from dementia in this case). I went about the project as I would any other piece of software, making sure I covered all the API's, that the interface accepted proper values, and it correctly displayed results.

The "quality manager" (very different person from the development manager that had hired me) had no understanding or interest in understanding anything I did. His 'scripts' were literally printed out steps for 'QA engineers' to follow, which he expected them to mark up with comments in the margins to document what was happening as they typed in the prescribed values and read the programs responses. He was proud that he could produce a 6ft stack of paper for when the FDA auditors showed up. His stated goal was not to demonstrate quality or even compliance. His STATED goal was to befuddle the auditor with bullshit.

The incentive was not to produce quality software. It was to get through an audit. To his credit, the auditors didn't know a damn thing about software quality, either. They were not there to find problems with the software. They were there to verify that the stack of papers were in order. A typical finding being that a page is one of the 'scripts' was not signed or had an incorrectly formatted date.

This is what the 'value' that government oversight provides.

Re:Subsidised industry == Industrial polictics

[Shotgun]

Since you specifically brought up healthcare, I have to respond with the exact same thing I said above. It is to apropos not to.

I was hired on to write automated tests for a piece of software used to do cognitive testing (to see if people were suffering from dementia in this case). I went about the project as I would any other piece of software, making sure I covered all the API's, that the interface accepted proper values, and it correctly displayed results.

The "quality manager" (very different person from the development manager that had hired me) had no understanding or interest in understanding anything I did. His 'scripts' were literally printed out steps for 'QA engineers' to follow, which he expected them to mark up with comments in the margins to document what was happening as they typed in the prescribed values and read the programs responses. He was proud that he could produce a 6ft stack of paper for when the FDA auditors showed up. His stated goal was not to demonstrate quality or even compliance. His STATED goal was to befuddle the auditor with bullshit.

The incentive was not to produce quality software. It was to get through an audit. To his credit, the auditors didn't know a damn thing about software quality, either. They were not there to find problems with the software. They were there to verify that the stack of papers were in order. A typical finding being that a page is one of the 'scripts' was not signed or had an incorrectly formatted date.

This is what the 'value' that government oversight provides.

Re:Subsidised industry == Industrial polictics

[swillden]

It isn't clear if the process you described is good or bad. It depends entirely on the content of the scripts. Where did they come from? What was the motivation and competence of the people who did? If the scripts were very well done, then the efforts of the QA manager and FDA auditors to ensure that they were followed precisely and the results were correct was exactly what was needed.

Re:Subsidised industry == Industrial polictics

[swillden]

What was the motivation and competence of the people who did?

s/did/created them/

It's a philosophy problem

[Zorpheus]

I once looked at jobs at the European Space Agency. And it became clear that their working philosophy is to do only things that are completely proven. There seems to be no room to try something new and revolutionary. I bet the philosophy is the same in the whole space industry.

Re: It's a philosophy problem

[Zorpheus]

So they seem to put reliability over everything, from the beginning. Musk seems to have a better way.
But maybe I am just too biased against this attitude as a researcher.

Re: It's a philosophy problem

[Anonymous Coward]

If they're stuck in this position because they focused on reliability, then maybe they can sell reliability? Let's say SpaceX has a failure rate of 10% and Ariane has a failure rate of 1%. The expected cost of launching a $1B satellite is

100M (launch) + 100M (expected loss) = 200M for SpaceX.
125M (launch) + 10M (expected loss) = 135M for Ariane.

So Ariane is competitive for expensive payloads.

Re: It's a philosophy problem

[Anonymous Coward]

If they're stuck in this position because they focused on reliability, then maybe they can sell reliability?

While what you say makes a kind of sense, the trouble with this approach is that (1) SpaceX's failure rate is no where near 10%, and (2) they will have many more launches than Ariane and thus be finding problems more rapidly and improving more rapidly, thus ending up on a path to improve reliability faster than ariane. They can also examine their equipment post-fight to see which parts are seeing the most wear etc, which Ariane cannot do because they dump theirs into the ocean each time.

boo hoo

[MachineShedFred]

waaaaaahhh!

Is this guy serious? Because ArianeSpace isn't subsidized out the wazoo by the EU? So because SpaceX got (far less) subsidies and managed to make better rockets with them, you're going to cry about it?

A simple message for you and your employees (if they aren't on strike right now): Adapt or die. Disruption has come to the launch market, and you can either get your costs down or not win contracts.

Re:boo hoo

[Anonymous Coward]

A simple message for you and your employees (if they aren't on strike right now): Adapt or die. Disruption has come to the launch market, and you can either get your costs down or not win contracts.

Well spoken. Of course, you will say the same when China, India or any of the other emerging players in this game come and undercut your industry, yes?

Re:boo hoo

[Anonymous Coward]

I will enjoy the laugh when SpaceX complain to the US government that Chinese rockets are undercutting them and "stealing jobs from America".

Re:boo hoo

[bill_mcgonigle]

BFR is on track to undercut all Chinese rockets on cost. By an order of magnitude. Your fantasy is wholly detached from reality.

Re:boo hoo

[Shotgun]

Everything!? Even cloth?

Moot point

[Solandri]

"SpaceX is charging the U.S. government 100 million dollar per launch, but launches for European customers are much cheaper."

Falcon 9 FT payload to LEO: 22,800 kg
Ariane 64 payload to LEO: 20,000 kg
A64 launch cost: 90 million Euro = US$106 million

Even at $100 million, SpaceX is charging the U.S. government less than Ariane would be.

Re:Moot point

[spth]

Your quote of 106 M USD is for launching up to 12,000 kg to GTO (2014 quote). To compare launch prices a bit more information is needed. The current Falcon 9 can launch 8,300 kg to GTO (without recovering the boosters) or up to 5,300 kg (recovering the boosters). Falcon 9 launch (with booster recovery) is 62 M USD (2016 quote).

Re:Moot point

[Rei]

They're talking about FH, not F9.

Re:Moot point

[Immerman]

I believe that generally speaking launch costs are constant for any particular rocket, regardless of target orbit. Basically you have the cost of the rocket, the cost of ground support and other logistics, and way down at the bottom at somewhere around 5% you have the cost of the fuel - the only the only part that changes significantly based on target orbit.

Once there's competition in the heavily reusable rocket market, so that the rocket is no longer the overwhelming fraction of the cost, and those savings are passed on to customers, then eventually, maybe, fuel will become a sizable fraction of the launch cost, so that the target orbit matters to the cost.

Re:Moot point

[bill_mcgonigle]

BFR will arrive about the same time as Ariane's F9 competitor. Current estimates are roughly 150,000 kg for $7M for BFR.

Ariane will be limited to European Intelligence services launches exclusively (unless there's a mandate by their governments that non-secret missions keep Ariane alive as a jobs program). It should just be absorbed into the military.

Even then nobody else will be able to cost-justify non-BFR launches.

Re:Moot point

[kellymcdonald78]

It depends heavily on the design. In the case of Falcon 9 there is only 1 variant. In some ways this is part of the genius of the SpaceX model. The Falcon 9 was built larger than most payloads, so there is a mass margin they can play with on every flight (say to test out various recovery approaches), paid for by someone else (the primary payload owner). Most other rockets have variants for different levels of performance, Ariane 5 has ECA and ES, Atlas V has something like 22 different variants, and the customer will typically buy the one most suited for their payload (why pay more for capacity they don't need)

Re:Moot point

[cjameshuff]

By then, Blue Origin might have evolved New Glenn into a fully-reusable system that can compete with BFR for smaller payloads. Of course, they have to actually reach orbit first.

Re:Free Enterprise

[Rei]

Maybe it's just me, but when I picture commercial launch services offered by North Korea, the image that immediately comes to mind is the Druuge starships from Star Control II ;)

Links for the parent comment

[Futurepower(R)]

BFR is a privately funded next-generation reusable launch vehicle and spacecraft system developed by SpaceX

SpaceX Payload Fairing Survives Despite Missing Recovery Net by 'a Few Hundred Meters'

In-orbit refueling

Re:hahahahah ur funny

[Daemonik]

The Chinese rockets will be excellent. They'll be using someone else's designs.

Just a quick question...

[argStyopa]

....what technical advances has Ariane brought to the space-launch process, again?

Re:Just a quick question...

[Anonymous Coward]

> ....what technical advances has Ariane brought to the space-launch process, again?

Superior reliability. Ariane-4 rockets once had a series of 50 (fifty) space launch successes in a row, without a single failure. That was unprecedented in an era when 3 successes in a row were considered great result in the US and soviet space programme.

Arianespace also pioneered the use of truly equatorial launch platforms in the french-held latin american colony of Guyana. That trick saved significant fuel to orbit, at the expense of some indian abo villages torched by foreign legion brutes, while the Free World looked the other way.

"...and deal with engine-water interactions..."

[Herve5]

This, all the more than in France and the US at least, ICBMs have been designed and validated for underwater launches from nuclear submarines, for dozens of years -in other words : this know-how for "engine-water interactions at launch" definitely exists...

Re:"...and deal with engine-water interactions..."

[angel'o'sphere]

ICBMs are launched from launch tubes. High pressure nitrogen like in an air gun shots the missile out of the water. The missile is inside of a plastic shell. The shell gets dropped with explosives: then the rocket engine fires.

So no: there is absolutely nothing in common with a rocket that is floating in salt water and has to fire its engines under water to lift off.

Re:"...and deal with engine-water interactions..."

[powerlord]

Just as a visual for the parent's comment: https://www.youtube.com/watch?...

You can see the rocket "breach" the water and pause for a split second before the main engine ignites.

Re:"...and deal with engine-water interactions..."

[angel'o'sphere]

Yes, obviously, and as you likely see: it was inside of a capsule.
OR at least: the engine ignited OUTSIDE of the water, so there was no engine/water interaction.

Comment removed

[account_deleted]

Comment removed based on user account deletion

stop UK firms exporting the tech needed to run it?

[Herve5]

Don't dream too much, Brexiter ;-)
Galileo encryption module is just a module. It will be supplied by another European industrial. There are many fully capable guys which are probably already fighting to catch the money.
"Crippling the system before it even goes live" is, erm, a wild dream :-)

Might actually be honest accounting

[sjbe]

SpaceX is independent and makes their own decisions. They just happen to have written a screw the feds contract that brings more money in.

I wouldn't be so sure of that. I run a small manufacturing company and I've build products for government contracts. I also happen to be a certified accountant. The amount of administrative burden for a government job can in some cases easily double the cost. Particularly for military work. While I'm not privy to the inner workings of SpaceX, I could see a military launch easily adding many millions of dollars of administrative costs for legitimate reasons not controlled by SpaceX.

Now I know that a bunch of your are thinking that this is government inefficiency at work (and sometimes it is) but most of the time it is simply procedures put in place to ensure the government actually gets what they are paying for. These procedures are developed based on previous experiences. Private enterprise routinely tries to screw the government as hard as possible (and they often succeed) and government fights back by making extremely detailed requirements to ensure that doesn't happen or to at least minimize the problem. It's not an easy problem to solve especially when the number of qualified suppliers for a complicated product (like a rocket) are few.

Re:Free Enterprise

[maroberts]

Apart from North Korea, you do have countries such as India getting in on the game, where manufacturing and labour costs are lower.

Re:They should try ev

[green1]

The difference is that the rocket industry has competition (even if not particularly good competition)

The high end, long range, electric vehicle market does not.

I honestly don't think Tesla will be able to survive if a credible competitor ever emerges, but I do hope to be proven wrong (and this isn't actually a statement about the cost of a Tesla, it's more about their abysmally low quality, their flat out lies in every aspect of their marketing, and their blatant disregard for their customers) I think the next 5-10 years will be very interesting in this space. So far Tesla has that arrogant attitude that all monopolists have. Eventually they'll either have to change that, or have some real trouble once someone else decides to actually compete with them.

Would you like fries...er, capsule with that?

[Anonymous Coward]

What he fails to tell you, NASA gets the Dragon capsule with that extra cost. It is a full flight to the ISS, not just to orbit.

Re:Free Enterprise

[saloomy]

It matters not. India and other countries can not compete with SpaceX, because India doesn't have a big pool of rocketry scientists who have experience developing reusable, relaunchable craft.

That is the whole point of SpaceX. Manufacturing will not be the most important thing SpaceX does, unlike all other space launch companies. They focus on efficiency, lower costs, and lower waste.

Anything India does, will come from its government, who's focus is going to be employing manufacturing labor.

Re:stop UK firms exporting the tech needed to run

[Anonymous Coward]

If there are so many capable people in Europe, why can't they even build an alternative to Facebook? :)

Re:Free Enterprise

[angel'o'sphere]

who's focus is going to be employing manufacturing labor
Hae? That does not make sense.
Their focus is to employ scientists.

Re: stop UK firms exporting the tech needed to run

[jabuzz]

I am not remotely a Brexiter, I am the total opposite in fact. I don't respect the outcome of the second referendum on Europe because the Brexiters never respected the first, and role on a third.

In the meantime sure the module could be replaced. Any ideas how to do that on satellites in orbit?

crybaby...

[SuperDre]

Well I guess he's just a crybaby, it's their own fault, the ariane has been around for ages and seemingly haven't really improved over the years to cut cost. It's more like they could ask almost anything because there wasn't really any competition, but now there is, and now they have to get their act together..

Re:hahahahah ur funny

[ElizabethGreene]

> The Chinese rockets will be excellent. They'll be using someone else's designs.

Before you knock China's rockets too hard you might want to look at what they are actually doing. Unlike the US, they have manned launch capability today. They have orbited the moon several times and dropped a rover on the moon in 2016.

As a US based space nut, I dare say they are closer to walking on another world than we are.

Re:Free Enterprise

[ElizabethGreene]

> India and other countries can not compete with SpaceX, because India doesn't have a big pool of rocketry scientists who have experience developing reusable, relaunchable craft.

A decade ago SpaceX didn't have any scientists with experience developing reusable relaunchable craft. It would be unwise to trust the depth of this moat.

Both China and India have the same goal for their space programs. They need energy, and space based solar power has the promise of transforming them to 21st century economies. I guarantee you they are working on reusable launch vehicles right now, today. They'll do it to crazy fast too, because they don't have the Arianne/ULA political baggage to prevent them from committing their full resources to it.

Hey Rei,

[GPS Pilot]

You're my favorite Slashdotter. And I'll be in Reykjavik May 27, May 28 and June 7... may I buy you lunch?

(Sorry to spam a bunch of your posts, but I wanted to be sure you saw my invitation.) Reply to GPSpilot1@NOsPam.gmail.com.

And you're right... it's ridiculous that we can't type a thorn here.

Hey Rei,

[GPS Pilot]

You're my favorite Slashdotter. And I'll be in Reykjavik May 27, May 28 and June 7.... may I buy you lunch?

(Sorry to spam a bunch of your posts, but I wanted to be sure you saw my invitation.) Reply to GPSpilot1@NOsPam.gmail.com.

And you're right... it's ridiculous that we can't type a thorn here.

Hey Rei,

[GPS Pilot]

You're my favorite Slashdotter. And I'll be in Reykjavik May 27, May 28 and June 7... may I buy you lunch?

(Sorry to spam a bunch of your posts, but I wanted to be sure you saw my invite.) Reply to GPSpilot1@NOsPam.gmail.com.

And you're right... it's ridiculous that we can't type a thorn here.