Is It Worth It? - the Economics of Reusable Space Transportation

Over the past several decades billions of dollars have been invested by governments and private companies in the pursuit of lower cost access to space through earth-to-orbit (ETO) space transportation systems. Much of that investment has been focused on the development and operation of various forms of reusable transportation systems. From the Space Shuttle to current efforts by private commercial companies, the overarching belief of those making such investments has been that reusing system elements will be cheaper than utilizing expendable systems that involve throwing away costly engines, avionics, and other hardware with each flight. However, the view that reusable systems are ultimately a "better" approach to providing ETO transportation is not held universally by major stakeholders within the space transportation industry. While the technical feasibility of at least some degree of reusability has been demonstrated, there continues to be a sometimes lively debate over the merits and drawbacks of reusable versus expendable systems from an economic perspective. In summary, is it worth it? Based on our many years of direct involvement with the business aspects of several expendable and reusable transportation systems, it appears to us that much of the discussion surrounding reusability is hindered by a failure to clearly define and understand the financial and other metrics by which the financial "goodness" of a reusable or expandable approach is measured. As stakeholders, the different users and suppliers of space transportation have a varied set of criteria for determining the relative economic viability of alternative strategies, including reusability. Many different metrics have been used to measure the affordability of space transportation, such as dollars per payload pound (kilogram) to orbit, cost per flight, life cycle cost, net present value/internal rate of return, and many others. This paper will examine the key considerations that influence stakeholders as they make space transportation investment decisions, including primary metrics by which various stakeholders measure financial goodness and other factors that significantly shape decisions to invest in reusable or expendable systems. It must be noted at the outset that reusable systems take many forms and perform different transportation functions including, but not limited to, ETO payload delivery. The discussion in this paper is limited to the economics of ETO transportation systems.