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Space Science Digital > Blog > News > Inflation, high demand driving up launch prices
News

Inflation, high demand driving up launch prices

By Jayden Hanson March 27, 2023 5 Min Read
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WASHINGTON — A tight launch market, coupled with high inflation, has driven up launch prices in the last year, putting a squeeze on customers.

At the recent Satellite 2023 conference, industry officials said they saw evidence of growing prices in the last year. Growing demand along with a constrained near-term supply that some have dubbed a “global shortage” is a factor, they say, along with inflation that has remained historically high for more than a year.

Prices of individual commercial launch orders have traditionally not been disclosed, a practice that continues today. SpaceX does publish list prices for its Falcon 9 and Falcon Heavy launches, which the company raised by 8% a year ago because of what it said was inflation. Prices of individual contracts, however, can vary.

At the same time it raised its dedicated launch prices, SpaceX also increased the prices of its rideshare launch services by 10%, from $1 million for a 200-kilogram satellite to $1.1 million. Earlier this year, the company appeared to hike prices again: according to a tool on its website for finding and booking rides, the cost of a 200-kilogram satellite was now $1.3 million, with the earliest flight opportunity in the second quarter of 2025.

Companies that do business with SpaceX’s rideshare program confirm they are seeing higher prices. “We are seeing increased pricing from launch service providers,” said John Rood, chief executive of Momentus, during a Satellite 2023 panel March 14. The company has a contract with SpaceX for several launches of its Vigoride tug, including one scheduled for early April on SpaceX’s Transporter-7 rideshare mission.

He said Momentus is locked into lower prices under its existing SpaceX contract for its next few launches. “But beginning in 2024 you’re going to see users like ourselves pay a higher price,” he said. “They’re still lower priced than other launch service providers by a significant margin.”

Momentus has “strategic partnerships” with other launch companies, he said, including some emerging providers he did not identify that have not yet raised their prices. “I think a lot of what their pricing is based on getting entry-level participation with their services.”

Tiphaine Louradour, new chief executive of Spaceflight, which has also flown payloads on SpaceX rideshare missions, said there was strong demand for launches to mid-inclination and higher inclination orbits. “Some of the prices are increasing,” she said.

She looked to competition from new launch vehicles as key to stemming that price growth. “That will help on that price element.”

During a separate conference panel March 15, Tom Ochinero, senior vice president of commercial business at SpaceX, stated that the price increase last year was caused only by inflation. “It was overdue,” he said, as the company has not raised its published launch prices previously to adjust for inflation.

“That doesn’t actually even cover the increase in our cost,” he said, noting far greater cost increases for some items, like helium used to pressurize propellant tanks. He denied that the increase had anything to do with SpaceX’s position in the market as one of the few launch providers with capacity on its manifest in the near term.

“We are making adjustments just to keep up with our own costs,” he said. “In terms of performance, reliability, the low cost of insurance and the cadence that we provide, we feel like we’re positioned to provide high value to our customers.”

Rood said that at least some of the higher launch costs borne by Momentus will be passed on to its customers. However, he was optimistic prices will decline in the longer term because of both increased competition and the impacts of SpaceX’s own Starship vehicle, touted as offering a far lower cost per kilogram of payload.

“I think the long-term trend will be lower launch prices, lower cost per kilogram,” he said, “but we may see in the near term some adjustments upward.”

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TAGGED: demand, driving, High, Inflation, launch, prices

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Jayden Hanson March 27, 2023
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