SpaceX launched a satellite into orbit last year, then landed the rocket that launched it back on Earth. This was something no one else in the history of spaceflight -- neither commercial launchers Boeing (NYSE:BA) nor Lockheed Martin (NYSE:LMT), nor superpower governments such as the United States or Soviet Union -- had ever accomplished before.
And now SpaceX is preparing to make history again by re-launching a used rocket, carrying the new SES-10 satellite.
A bit of history
SpaceX entered the world of commercial satellite launches in July 2009, when it put a Malaysian imaging satellite, RazakSAT, into orbit with a first-generation Falcon 1 rocket. Multiple government launches for NASA and the Canadian Space Agency followed. And then, in 2013, SpaceX returned to commercial space carrying a payload for European satellite communications giant SES.
That launch, carrying the SES-8 communications satellite into supersynchronous transfer orbit, reportedly cost SES "well under US$60 million" to launch -- a discount it received in return for volunteering as Falcon 9's first paying commercial customer.
SES has since sent up one more satellite on a Falcon 9 (SES-8), and it has four more in the pipeline: the aforementioned SES-10, due to go up sometime this month, and SES-11, SES-14, and SES-16, on dates yet to come.
For those keeping score, to date, SpaceX has successfully sent up -- and brought back down safely -- six rockets used to launch:
- Orbcomm-2, launched to low Earth orbit (LEO) and landed at Landing Zone 1 on Dec. 21, 2015.
- CRS-8, launched to resupply the International Space Station (ISS) in LEO and landed at sea on April 8, 2016.
- JCSAT-14, launched to geostationary transfer orbit (GTO) and landed at sea on May 6, 2016.
- Thaicom 8, likewise launched to GTO and landed at sea on May 27, 2016.
- CRS-9, launched to LEO and landed at Landing Zone 1 on July 17, 2016.
- And most recently, JCSAT-16, launched to GTO and landed at sea on Aug. 14, 2016.
The SES-10 mission will be the first to carry a satellite into space aboard one of those used rockets. Specifically, it will ride SpaceX's second rocket returnee, the one that carried CRS-8 to ISS. And once again, SES is getting a sweet deal for playing guinea pig -- perhaps as much as a 30% discount to ride a used rocket.
Don't call it a comeback
Now, SpaceX eschews use of the term "used rocket" -- likewise "reused," "secondhand," "pre-owned," "manufacturer-refurbished," or "open-box."
Instead, SpaceX would really prefer that you call its reusable rockets "flight-proven."
Why is that? SpaceX doesn't spell out the reasons for its terminology switcheroo, which appeared in a recent Facebook posting. But if you ask me, what SpaceX is trying to do here is change the way the world looks at rockets -- and the practice of rocketry itself.
When SpaceX calls the CRS-8 booster "flight-proven," it's laying the groundwork for a new paradigm in which reusable rockets, as opposed to disposables, will become the norm. In this bright future, a rocket won't be truly proven flyworthy until it has flown at least once -- which kind of disqualifies every other orbital rocket on the market today.
It depends on what the meaning of "is" is
And that's kind of the point. SpaceX is emphasizing the fact that the nonreusable rockets flown by Boeing, Lockheed Martin, and their European rival Airbus (NASDAQOTH:EADSY) aren't really "flight-proven," at least not in the sense of being reusable. It's emphasizing the fact that it's done something technologically different from everyone else in the industry (with the possible soon-to-be-exception of Blue Origin).
Thus SpaceX turns the entire concept of "used rockets" on its head. It's not "risky" to fly on a reusable rocket. To the contrary, the real risky rockets are the nonreusables that Boeing, Lockheed Martin, and Airbus are selling -- because by definition they haven't yet proven themselves reliable for reuse.
Granted, over at United Launch Alliance, Boeing and Lockheed would certainly argue that after 110 straight successful launches, they've proven the reliability of their rockets pretty darn well. And yet, SpaceX's exercise in semantics seems to be gaining traction with at least one important market player. Commenting on the upcoming launch, SES chief technology officer Martin Halliwell noted specifically that insurers made "no material change" to the rate they charged to ensure this SES-10 launch, as compared to what they ordinarily charge for launching a satellite on a brand-new rocket.
What it means to investors
So what does this mean to investors? If SpaceX launches SES-10 successfully, and after that, makes launches aboard "flight-proven" rockets routine, the cost of space launch is going to plunge. SpaceX has promised 30% price reductions on launch cost. Insurers appear to be agreeing not to eat up those savings with "material" increases in the cost of insurance. Thus, the total cost goes down -- below the industry-low prices SpaceX already charges.
This is grand news for companies that want to put satellites in space more cheaply. It is not good news for Boeing, Lockheed, Airbus, and their old-space economy peers. They're about to become high-cost providers in an industry that's leaving them behind -- at rocket speed.