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HomeEditor’s PicksEstimating Space Launch Prices for Market Comparatives - A Quick Overview

Estimating Space Launch Prices for Market Comparatives – A Quick Overview

The price per kilogram for space launches – specific to individual vehicles – can be computed using a generic or specific method.

Generic Estimate Method

The generic estimate uses published, or estimated, launch vehicle prices and payload capacities. The generic metric offers a qualitative measure of launch industry costs. While this approach is simple it treats as commodity items with a fixed price and capacity, and in general this is not the case.

Specific Estimate Method

The specific estimate uses the actual price for each launch event and the actual mass of its payload. Using actual price and payload mass implicitly takes into account that negotiations for launch vehicles can result in widely varying prices, depending on:

  • customer requirements for payload integration and/or orbital destination,
  • the existing supply of and demand for ,
  • the payload using less or more of the launch vehicles full capacity,
  • any special discounts related to bulk buys of launch vehicles,
  • launch insurance which can vary based upon launch vehicle reliability history,
  • any offsets related to acceptance of secondary payloads,
  • new launch vehicle companies aggressively discounting to establish initial and reference accounts, and
  • the exchange of equity or services for launch services.

Normalizing to Compare Between Countries and Years

When comparing currency values associated with pricing, between countries and between the years, two factors must be taken into account: currency exchange and inflation rates.

Pricing should first be converted to USD for each year. The average annual currency exchange rate applicable to each year should be used to convert foreign currency to USD. The average annual currency exchange rates are updated on a quarterly basis by the IRS. The IRS makes the exchange rate data set available for download.

Inflation rates are taken into account by converting current dollars into a constant dollar amount. A constant dollar is an adjusted value of currency used to compare dollar values from one period to another. Due to inflation, the purchasing power of the dollar changes over time, so in order to compare dollar values from one year to another, they need to be converted from nominal (current) dollar values to constant dollar values. Constant dollar value may also be referred to as real
dollar value. The annual US Consumer Price Index (CPI) should be used to adjust current dollar values to constant dollar values. The US BLS publishes regular updates to the CPI, and makes the CPI dataset available for download.

After converting launch pricing information to USD taking into account and current exchange rate, and adjusting for inflation to a common constant dollar value year (e.g. fiscal year 2021), comparisons can be done,

Reality

Unfortunately, the terms of specific commercial contracts are rarely made public – making the generic estimate method the only option available for comparisons across the industry. Some market firms may have a proprietary database of commercial contract information compiled based on industry contacts; but that is also not generally made public.

For comparisons across the industry, the following data set from CSIS provides the best publicly available generic estimates for launch vehicles from 1961 to 2019. Dollar values have been adjusted by CSIS to fiscal year 2021.

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