Economics of Russian launch

We frequently see quoted prices for Soyuz, Proton and Zenit launches
that are a lot lower than those for US ELVs or Arianespace. Often
those prices are cited as proof that over-all $/kg to orbit could and
should be a lot lower, were it not for [insert your favorite critique
of how the US does space here].

I'm curious -- and have no opinion in advance -- about the extent to
which the raw prices are an apples-to-apples comparison. It's my
understanding from Jim Oberg's and others' work on the Soviet space
program that in general they've had longer production runs of the same
core models, with advantages in learning curve and economy of scale.
And obviously labor costs are less in Russia and Ukraine. (Should we
use exchange-rate or PPP comparisons?)

But I don't know much about how Soviet facilities were privatized,
what the cost accounting (if any!) in that process was like, or to
what extent there has been continued _de facto_ subsidy since 1990 to
maintain a base of missile technology and expertise. So I don't know
if a Soyuz price reflects amortized R&D, infrastructure, etc. in the
same way an Atlas or Delta or Ariane price does.

Can you suggest any good resources on this subject?

-Monte Davis

Originally Posted by Monte Davis

We frequently see quoted prices for Soyuz, Proton and Zenit launches
that are a lot lower than those for US ELVs or Arianespace. Often
those prices are cited as proof that over-all $/kg to orbit could and
should be a lot lower, were it not for [insert your favorite critique
of how the US does space here].

I'm curious -- and have no opinion in advance -- about the extent to
which the raw prices are an apples-to-apples comparison. It's my
understanding from Jim Oberg's and others' work on the Soviet space
program that in general they've had longer production runs of the same
core models, with advantages in learning curve and economy of scale.
And obviously labor costs are less in Russia and Ukraine. (Should we
use exchange-rate or PPP comparisons?)

But I don't know much about how Soviet facilities were privatized,
what the cost accounting (if any!) in that process was like, or to
what extent there has been continued _de facto_ subsidy since 1990 to
maintain a base of missile technology and expertise. So I don't know
if a Soyuz price reflects amortized R&D, infrastructure, etc. in the
same way an Atlas or Delta or Ariane price does.

Can you suggest any good resources on this subject?

-Monte Davis

hi
The ariane5-ECA launcher cost is now around $100m (préviously $160m).
Here a short and recent news on this topic:
http://www.france-science.org/home/p...ID=8411&LNG=us
See N°303-4: "Ariane5 new production structure"
Others improvements (performance and cost) will come in a few years.
The soyuz production cost is far less expensive than usually thought.
Rémy

R=E9my MERCIER wrote:

hi
The ariane5-ECA launcher cost is now around $100m (pr=E9viously $160m).
Here a short and recent news on this topic:
http://tinyurl.com/9fcb3
See N=B0303-4: "Ariane5 new production structure"

According to "http://www.spacetoday.net/Summary/1242"
each Ariane 5 flight costs close to $200 million.
The hardware itself might be reduced toward
$100 million, but that is only 60-70% of the total
launch services cost.

Arianespace is cutting costs because it must compete
with Proton and Zenit. But since Proton and Zenit
prices are artificial, ILS and Sea Launch will be
able to drop prices to maintain market share
against Arianespace if they choose to do so. And
there is always the possibility of China Great Wall,
who could undercut the Russians and Ukrainians if
they wanted.
=20
- Ed Kyle

On Fri, 12 Aug 2005 19:41:15 +0000, Rémy MERCIER
wrote:


The ariane5-ECA launcher cost is now around $100m (préviously $160m).

Yeah, right. After a launch failure, the need to requalify the engine
and new upper stage, and the massive schedule delays that cause for
the improved Ariane 5, the price went DOWN.

Tell me another one.

Subsidies, anyone?

Brian

"Brian Thorn" wrote in message
...
On Fri, 12 Aug 2005 19:41:15 +0000, Rémy MERCIER
wrote:


The ariane5-ECA launcher cost is now around $100m (préviously $160m).

Yeah, right. After a launch failure, the need to requalify the engine
and new upper stage, and the massive schedule delays that cause for
the improved Ariane 5, the price went DOWN.

Tell me another one.

Subsidies, anyone?

That's the problem with government monopolies- the price offered does not
need to have any relation to actual costs.

So, Remy, what are the *actual production costs*, including subsidies of any
suppliers, of an Ariane 5 flight, and how do you derive the numbers?

Originally Posted by Scott Hedrick

"Brian Thorn" wrote in message
...
On Fri, 12 Aug 2005 19:41:15 +0000, Rémy MERCIER
wrote:


The ariane5-ECA launcher cost is now around $100m (préviously $160m).

Yeah, right. After a launch failure, the need to requalify the engine
and new upper stage, and the massive schedule delays that cause for
the improved Ariane 5, the price went DOWN.

Tell me another one.

Subsidies, anyone?

That's the problem with government monopolies- the price offered does not
need to have any relation to actual costs.

So, Remy, what are the *actual production costs*, including subsidies of any
suppliers, of an Ariane 5 flight, and how do you derive the numbers?

Hi,

When Jean-Charles Vincent itself (director arianespace-kourou) says : « the production cost is now almost 35% less » then I take my calculator (and my glasses) and I write: 130*1.25*(1-0,35)= . Then I can see (with some difficulties): “105,6”. (It is known that the production cost was almost E130m).
""""""the price offered does not need to have ANY relation to actual costs."""""
"any" is a little excessive. With the EGAS programme (Europpean Guaranted Acces To space) the fixed charges (kourou) are paid ("EGAS-help" = "USarmy-facilities").
As a result, Ariane5 is now within the market prices. And for the future I bet on a reliability = 0,99 and with the best (incomparable!) services.
Rémy

Brian Thorn wrote:
On Fri, 12 Aug 2005 19:41:15 +0000, R=E9my MERCIER
wrote:


The ariane5-ECA launcher cost is now around $100m (pr=E9viously $160m).

Yeah, right. After a launch failure, the need to requalify the engine
and new upper stage, and the massive schedule delays that cause for
the improved Ariane 5, the price went DOWN.

Tell me another one.

Subsidies, anyone?

Show me another launcher in this class (i.e. EELV,
Proton, Sea Launch Zenit, etc.) that would even
exist without a government having spent large
somes of money.

- Ed Kyle

"Rémy MERCIER" wrote in message
...
When Jean-Charles Vincent itself (director arianespace-kourou) says : «
the production cost is now almost 35% less »

That's nice, but I don't see the subsidy numbers, either the direct subsidy
to Arianespace, or to the suppliers. In order to come up with the *real*
cost, you need to add in the subsidies.

Sorry, but there's no evidence to support the numbers provided, and a great
deal of evidence, including history, to make them suspect.

Then there's the amortized development costs, *including* a substantial
amount of recent redevelopment and retesting. *Adding* expense does *not*
cause the per-unit costs to drop.

Don't pee on my leg and tell me it's raining, son. Otherwise, you run the
risk of getting elected to Congress.

"Ed Kyle" wrote in message
ups.com...
Show me another launcher in this class (i.e. EELV,
Proton, Sea Launch Zenit, etc.) that would even
exist without a government having spent large
somes of money.
------------------

The United States Government underwrote the original development costs years
ago, but does NOT pay part of the cost of Atlas or Delta launchers.

In article ,
Monte Davis wrote:
But I don't know much about how Soviet facilities were privatized,
what the cost accounting (if any!) in that process was like, or to
what extent there has been continued _de facto_ subsidy since 1990 to
maintain a base of missile technology and expertise. So I don't know
if a Soyuz price reflects amortized R&D, infrastructure, etc. in the
same way an Atlas or Delta or Ariane price does.

Ariane prices don't amortize anything; the R&D/infrastructure costs are
basically written off by the ESA governments.

The same is *mostly* true of Atlas and Delta. There's probably some
attempt to do cost-recovery on the companies' share of the EELV
development and infrastructure costs. But nobody is attempting to
recover the government contributions to either the EELVs or their
predecessors. If you want to see full amortization, you need to look
at fully-commercially-funded ventures like Pegasus and Falcon I.

Nobody really has a good handle on the true *costs* of Russian launchers.
Almost certainly, they too are treating infrastructure and R&D as sunk
costs assumed by the government, except perhaps for recent upgrade work.
Even that is hard to be sure of.

They have some inherent advantages, from accumulated experience, past
investment in automation, and generally leaner, less manpower-intensive
operations. They also benefit, at least temporarily, from low wages and
low prices in what is now essentially a Third World country. And they
probably don't fully pay for all the government help they get. But
there's still much uncertainty about how big the gap is between their real
costs and their prices. (For that matter, just getting hard numbers on
prices is not easy.) For Proton, in particular, there's little doubt that
their prices are set in reference to the West's -- to avoid provoking
another round of trade restrictions -- and their real costs are much
lower. How much lower? No outsider knows. Hell, *they* may not know.
--
No, the devil isn't in the details. | Henry Spencer
The devil is in the *assumptions*. |