UNIVERSITY OF LJUBLJANA FACULTY OF ECONOMICS MASTER’S THESIS BUSINESS ASPECTS OF SPACE TRANSPORTATION SYSTEMS DEVELOPMENT Ljubljana, June 2017 GREGOR SKOK AUTHORSHIP STATEMENT The undersigned Gregor Skok, a student at the University of Ljubljana, Faculty of Economics, (hereafter: FELU), author of this written final work of studies with the title Business Aspects of Space Transportation Systems Development, prepared under supervision of prof. dr. Peter Trkman. 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Ljubljana, Author’s signature: TABLE OF CONTENTS INTRODUCTION .................................................................................................................... 1 1 SPACE INDUSTRY OVERVIEW ...................................................................................... 3 1.1 Space Industry Markets .................................................................................................... 4 1.2 Space Industry in the European Union ............................................................................. 5 1.3 Launcher System Sales ..................................................................................................... 8 2 COMMERCIAL SPACE INDUSTRY ................................................................................ 8 2.1 Commercial Space Industry Structure .............................................................................. 9 2.2 Role of the ISS and NASA in the Commercial Launch Industry Development ............ 11 2.3 Commercial Market ........................................................................................................ 12 2.4 Commercial Launches .................................................................................................... 14 3 SUPPLY CHAIN MANAGEMENT AND LOGISTICS ................................................. 16 3.1 Space Sector Supply Chain ............................................................................................ 17 3.1.1 Supply Chain Structure ........................................................................................... 17 3.1.2 Value Chain ............................................................................................................. 18 3.2 Space Logistics ............................................................................................................... 20 3.3 Reverse Logistics ........................................................................................................... 22 4 OPERATIONS AND LAUNCH VEHICLES ................................................................... 25 4.1 Basic Operations ............................................................................................................ 25 4.2 Orbit Types ..................................................................................................................... 27 4.3 Space Launch Vehicles .................................................................................................. 27 4.3.1 Space Launch Vehicle Types .................................................................................. 28 4.3.2 Number of Stages .................................................................................................... 29 4.3.3 Space Transportation Vehicle Parts ........................................................................ 31 5 SPACE TRANSPORTATION SYSTEM FINANCING AND CONTRACTING ................................................................................................................... 33 5.1 Financing of Space Projects ........................................................................................... 33 5.2 Contracting ..................................................................................................................... 34 5.3 Risk Management ........................................................................................................... 35 5.4 Insurance ........................................................................................................................ 36 6 SPACE TRANSPORTATION SYSTEM COSTS ........................................................... 37 6.1 Spaceflight Cost Overview ............................................................................................. 38 6.2 Cost Estimation Methods ............................................................................................... 41 6.3 Comparison of Reusable and Expendable Launch Vehicles .......................................... 41 6.4 Cost of Reusable and Expendable Launch Vehicles ...................................................... 43 6.5 Dual Pricing and Cost Environment ............................................................................... 46 7 FUTURE DEMAND PREDICTIONS ............................................................................... 49 7.1 Existing Markets ............................................................................................................ 49 7.2 Emerging Space Markets ............................................................................................... 51 7.2.1 Space Tourism ......................................................................................................... 51 i 7.2.2 On-Orbit Satellite Servicing .................................................................................... 52 7.2.3 Private Space Exploration ....................................................................................... 52 7.3 Suborbital Reusable Transportation Systems ................................................................. 53 7.4 Space Launch System (SLS) .......................................................................................... 54 7.5 Skylon ............................................................................................................................. 55 8 QUALITATIVE RESEARCH OF SPACE TRANSPORTATION SYSTEMS .......... 58 8.1 Interview Details ............................................................................................................ 58 8.2 Cost and Revenue Specifics ........................................................................................... 58 8.3 Reusability as a Sustainable Future Approach ............................................................... 62 8.4 Space Industry Development and Demand .................................................................... 63 CONCLUSION ....................................................................................................................... 68 REFERENCE LIST ............................................................................................................... 70 LIST OF FIGURES Figure 1. Distribution of Sales by Main Market Segment (%) .................................................. 6 Figure 2. Sales by Main Market Segment: Military vs. Civil (M€) ........................................... 7 Figure 3. Sales by System: Public vs. Private customers (M €) ................................................. 7 Figure 4. Launcher System Sales (M€) ...................................................................................... 8 Figure 5. Total Commercial Space Launches from 1990-2014 ............................................... 10 Figure 6. Sales to Commercial Market by Customers (%) ...................................................... 13 Figure 7. Sales on the Commercial Market by System (M €) .................................................. 13