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SpaceShipOne at April rollout
Suborbital RLVs, like SpaceShipOne, face lower technical and financial hurdles and could open up lucrative new markets. (credit: J. Foust)

Is there a business case for RLVs?

<< page 1: high costs, small markets

The suborbital solution

In this analysis it becomes clear why there are neither no operational orbital RLVs today nor any in the foreseeable future. Yet, without the introduction of RLVs we are left with expendable vehicles, which, as the ASCENT study shows, have fallen into a stagnant market, not to mention one that currently is proving unprofitable for most, if not all, the major players. Is there a way out of this situation?

The answer may lie with another class of RLVs. This analysis has focused on orbital RLVs, capable of placing sizable payloads into orbit in direct competition with current expendables. However, there has been a surge of interest in the last several years in suborbital RLVs, vehicles that can fly to the edge of space carrying a few passengers or small payloads. The $10-million X Prize has generated much of the initial enthusiasm for suborbital RLVs. That interest is now sustained by recent forecasts, which project that suborbital space tourism could blossom into a half-billion-dollar industry within 20 years.

One advantage that suborbital RLVs have over their orbital cousins is that they fly far less demanding trajectories, climbing to 100 kilometers and about Mach 3. This makes it far easier to develop such vehicles, as they don’t rely on cutting-edge technologies to be successful. When Scaled Composites rolled out SpaceShipOne, its X Prize entry, earlier this year, company president Burt Rutan estimated the total cost of the program at about the same as the going rate for a ticket on a Soyuz flight, or about $20 million. Some other companies are also developing vehicles at similar, or even lower, costs.

Just as the Wright Brothers did not go from the Wright Flyer directly to a 747, or even a DC-3, we cannot expect to jump from expendable rockets immediately to large orbital RLVs.

The successful development of one or more suborbital RLVs will not only open up the space tourism market, it could serve other markets. A study conducted by the Aerospace Corporation for the US Department of Commerce last year identified a number of promising markets for suborbital RLVs in addition to space tourism, including remote sensing, microgravity testing, and missile defense applications. All of these are either unserved or underserved by existing sounding rockets.

These markets give suborbital RLV developers additional revenue streams that can help provide investors with an acceptable return on their investment. It also provides the basis for investing in a new generation of more capable suborbital RLVs, particularly those with greater crossrange, which could open up additional markets like rapid package delivery. This creates a virtuous loop that enables the incremental development of increasingly capable suborbital RLVs, eventually reaching the point where orbital RLVs become feasible.

The problem with orbital RLVs, and why their business cases never close, is primarily because we are attempting to take too great a technological leap in a bid to serve too small a market. Just as the Wright Brothers did not go from the Wright Flyer directly to a 747, or even a DC-3, we cannot expect to jump from expendable rockets immediately to large orbital RLVs. That should be the enduring lesson from the space shuttle program, not to mention later efforts that became enamored with cutting-edge technology, forsaking operational requirements and the needs of the marketplace. Instead, Wright and other aviation pioneers took a more incremental approach that, over time, led to larger, faster, safer aircraft. A similar approach in RLVs will allow us to go from small suborbital RLVs to larger orbital versions, and in the process make money and build a sustaining industry. It may be the best solution—and perhaps the only solution—to the omnipresent woes of the launch industry.


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