The relaunch of the suborbital market

“Skywalker Mannequin” takes a seat on a New Shepard suborbital vehicle earlier this year that, in July, will transport the winner of an ongoing auction to Space Edge. (credit: Blue Origin)


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With the tender for the New Shepard’s first human-crewed suborbital flight at $ 2.8 million, and the tender not closing until June 12, a healthy market may be available, at least temporarily. , for suborbital flights with paying participants in space flights.

Million dollar prices are likely to be fleeting in the suborbital up-and-back market.

Blue Origin has already successfully revealed that the price of a seat on a pioneer flight will be high. If successful, this will not be the first civilian suborbital flight to reach outer space (by the American definition, an altitude of about 80.5 kilometers). This honor went to Michael Melvill in 2004 in the Scaled Composites SpaceShipOne (see “SpaceShipOne Makes History – Barely”, The Space Review, Just 24, 2004). If they had carried a paying attendee who won an auction instead of lead ballast, the last 17 years of space travel might have changed.

Blue Origin astronauts will enter an elite club. Only 569 people have been to space since the start of the space age.

The sky is the limit for the auction price of the first seat

The auction price for the first seat may be higher or lower than the price for the second and subsequent seats. The first flight is a good consisting of being one of the first non-pilot participants in a suborbital flight, being a pioneer in risking the danger of opening up space to commerce and being one of the thousand first to go into space. After a flight, the next group of participants will not be the first. If the flight is successful, a tiny fraction of the risk will have been removed. After a few hundred successful flights in a row, it is hoped that the risk has fallen on that of other proven space launch systems. Before several hundred flights from New Shepard, the list of the first thousand humans in space will likely be full.

Nonetheless, an auction is a great way to find out prices. One of the most successful information markets using a periodic auction is the auction for inflation-protected Treasury securities. When the price of these inflation-linked bonds is compared to the price of non-indexed bonds, a clear market signal about the expected rate of inflation is revealed.

Implications for future suborbital and orbital demand

Million dollar prices are likely to be fleeting in the suborbital up-and-back market. Virgin Galactic is still very close to its first flight for paying participants. If the price the market will bear turns out to be more than $ 1 million per person (and risk tolerance turns out to be high as well), this could encourage Virgin Galactic to devote more resources to reaching the market. With a few more entrants, the price will likely be reduced so that supply meets demand at roughly the same margins as Tesla sedans.

If SpaceX is successful in developing the spacecraft, it could be used for suborbital jumps in space without its Super Heavy booster. There could be more competition from a near-orbital trajectory, like the one planned for SpaceX’s first near-orbital test of Starship and Super Heavy. While Starship has an expected payload of 100 tonnes to orbit on top of Super Heavy, it could be seven or eight crewed Dragon spacecraft with up to seven people for most of an orbit instead (a variant of something Buzz Aldrin told me about.) A price tag of $ 1 million to $ 2 million per person could generate $ 50 million to $ 100 million in revenue per flight. If the Dragons are reusable enough and the launches cheap enough, these flights could continue even if the price drops to $ 50,000 per person, which would still cover an ambitious launch price of Starship at $ 2 million per flight. A dedicated passenger ship such as the Mars-colonist version could carry 100 people. This could cost-effectively eliminate the risk of using Starship with or without Super Heavy to serve the point-to-point suborbital market (see “How safe is it enough for point-to-point suborbital?”, The Space Review, April 22, 2019 ), which could be larger than the orbital market (see “Could the suborbital point-to-point really be worth $ 20 billion a year in 2030?”, The Space Review, March 25, 2019).

Sooner or later, for millions of people, the sky may no longer be the limit.

At the same time, some customers of suborbital flights might prefer to take Axiom SpaceX flights to the International Space Station for $ 10-20 million per person, or SpaceX flights into orbit like the Inspiration4 flight (see “The New Era of Flight orbital space ”, The Space Review, March 8, 2021). Perhaps a flight around the Moon will become as common as trips to the International Space Station are now, if the dearMoon flight is successful. A civilian flight around the Moon will likely cost hundreds of millions per flight after the initial flight, considering multiple Starship tanker flights to fuel a Starship in orbit to reach the Moon. There are around 2,700 billionaires, compared to 1,000 in 2010, so there may be enough demand there.

Maybe the old Futron market research can be dusted off given that there are many more billionaires and millionaires than 20 years ago. In 2009, there were approximately eight to nine million millionaires in the world (see “Individuals Take Up the Space Development Torch,” The Space Review, June 21, 2010). Now 52 million is the current estimate. This makes Futron’s estimate of 16,000 annual requests for suborbital flights priced at $ 50,000 in 2021 perhaps conservative – that would be 1 in 3,250 millionaires taking a flight each year. And in ten years, there could be over 100 million millionaires. Serving this market could require three flights per week for a passenger vessel that can accommodate 100 people. Three flights a day might be enough to fly enough risk to prove that spaceflight is about as safe per trip as a motorcycle in about ten years.

Blue Origin could soon usher in the space age for private participants in suborbital flights with the attractive prices (from a supplier’s perspective) that it generated in its auctions. Sooner or later, for millions of people, the sky may no longer be the limit.


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