For years, Elon Musk has used the analogy of destroying a commercial jet after just one flight to explain his view that rockets must be reusable if humans are ever to afford space exploration.
Now, the founder of Space Exploration Technologies Corp (SpaceX) has discovered a way he might profit off that dream.
He is forming an airline of sorts, one that pledges to transport people anywhere on Earth in minutes by launching them on a rocket at speeds up to 27,360kph.
Photo: AFP
This audacious, hypersonic goal lies somewhere between science fiction and sound physics, although nothing in SpaceX’s rudimentary plans appears to be technically impossible.
However, long before Wall Street bigwigs get vaulted from New York to Asia in less than an hour, the significantly slower supersonic jet travel first popularized by the Concorde might return, sharply reducing flying times on many routes popular with business travelers.
Several companies are working to develop new supersonic aircraft technologies, as is NASA.
However, it will still take you a few hours to get to New York from Paris.
The bigger hurdle for both hypersonic and supersonic might well be the financial underpinnings of these ventures — determining how to make the technology profitable and not just the tiniest of niche transport options for the 1 percent, according to several experts in the aerospace industry.
The challenges “won’t be around whether it’s technologically feasible, it will be around what the economics will need to be to make it a reasonable endeavor,” said Luigi Peluso, a managing director in the aerospace, defense and airlines practice at consulting firm AlixPartners LLP.
Hypersonic speed would obviously revolutionize long-haul air travel, but could anyone but billionaires afford to fly above the atmosphere, zipping anywhere on the planet like an intercontinental ballistic missile with free peanuts?
Musk says yes — for about the price of a full-fare economy ticket today.
That is certainly aspirational and only possible after the technology is mature, Peluso said.
SpaceX declined to comment beyond Musk’s announcement of his plans last week.
“Hypersonic is going to be pretty incredible and I think that’s something that everybody is working for,” said Vik Kachoria, chief executive of Spike Aerospace Inc, a Boston start-up that is developing a supersonic business jet.
Spike plans to fly its first SX-1.2 demonstrator aircraft this week, albeit at subsonic speeds. Supersonic test flights are set for 2019, with customer deliveries in 2023.
With currently available data, it is impossible to draw conclusions about operating costs or ticket prices for hypersonic flight, and with the arrival of supersonic options, Musk’s bright, affordable skies might be more crowded and competitive.
One way an airline can set prices is to collect all of its costs to fly a route — expenses such as jet fuel, employee compensation, landing fees, airport charges, and sometimes aircraft maintenance and depreciation — and then add the profit margin it wants.
That is the approach of many ultra low-cost carriers like Spirit Airlines Inc.
Another is to use what Peluso called “a value-based model” of what the market would bear for a particular service.
In the case of a supersonic London-New York flight — a route with plenty of price-insensitive corporate demand — the market is likely to bear quite a bit.
For example, an airline could decide that a 50 percent margin is appropriate for a three-hour supersonic trip, given that it cuts the flight time by more than half.
Colorado-based Boom Supersonic, which says it has almost 80 orders from airlines for its 55-seat jet, has projected a one-way fare from New York to London of US$2,500.
That includes “healthy profitability for the operator” of the 3 hour, 15-minute flight, Boom spokesman Eli Dourado wrote in an e-mail, declining to offer more specific cost details.
“A pretty major difference between supersonic flight and suborbital transportation is that the former can be done without major engineering leaps,” he said.
In the case of SpaceX, the company’s planned “BFR” rocket would be fully reusable. That would help cut launch costs.
The question is how much can they fall? SpaceX has a list price of US$90 million for launches with Falcon Heavy, its largest rocket, which is expected to fly for the first time by year’s end.
SpaceX charges US$62 million to launch Falcon 9, its workhorse rocket.
“If that cost continues to come down as they scale, can they get it to US$30 million to launch?” Peluso asked.
However, flying humans adds extra cost in terms of safety equipment, redundancies, regulatory oversight and other protocols. All of those factors will add to the math problem.
This is where one of the unknowns that Musk and others are racing to test comes into play: How cheaply can you launch a large rocket?
Lower a launch cost to US$5 million, fly 50 people, sell the flight at cost and suddenly you have a fare that could be about US$100,000.
However, that scenario involves relying heavily on numerous optimistic assumptions around cost savings and a willingness to break even on the flights as a way to promote a nascent industry.
“Never say never, but that’s a heavy lift,” Peluso said.
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