Although Private, SpaceX Still Involved With NASA

Robert Siegel talks to Andy Pasztor, aerospace reporter for the Wall Street Journal, about the business model for SpaceX.

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ROBERT SIEGEL, HOST:

This was a private launch, but the development of the Falcon 9 rocket was funded in part by NASA. The agency put up $300 million. Are rockets to the space station likely to be profitable? We're going to ask aerospace reporter Andy Pasztor of The Wall Street Journal. Welcome to the program once again.

ANDY PASZTOR: Nice to be with you.

SIEGEL: And, first of all, is there enough of a paid cargo on that Falcon 9 to pay for the cost of the flight?

PASZTOR: Oh, absolutely not. They're taking up about a thousand pounds of non-crucial provisions and some clothing for the astronauts. So this is a test flight. And so far, it's gone remarkably well. And if it works, it'll be the first time that a privately funded and operated spacecraft will be able to actually link up with the space station.

SIEGEL: And do the customers exist now to make a business plan work for sending things up to the space station?

PASZTOR: Well, this has been the big question for many years, and I don't think that this launch answers it, really, to any great extent. Space Exploration Technologies Corp. and others are betting that there's enough NASA business in the next, let's say, 10 years to provide the cargo to the space station and to take astronauts to the space station, so that they will be able to make a business out of it. But, of course, it depends on how many companies are competing for that business.

And down the road, the hope is that there will be other commercial customers able to use these rockets. The one thing that SpaceX has working in its favor is that it already has about a billion dollars worth of private contracts with satellite operators to launch their satellites. That's a legitimate, longstanding, established business. And if they can make that work, that's certainly a profitable area for them.

SIEGEL: Back in 2005, Elon Lusk told space.com that a flight of the Falcon 9 would be priced between 27 million and $35 million. The SpaceX website now cites a price of $54 million. Do you know, am I comparing space age apples and oranges or has the price of passage into orbit doubled since those early estimates a few years ago?

PASZTOR: Well, I think space engineers like to say that a two or three-year delay in a space project is almost being on time. And based on the history of space projects, mostly government space projects, doubling in price for a specific project is almost coming in on target.

SIEGEL: Is it evident to you, though, that SpaceX does this cheaper than the government would do it, and that it has some secretive production that makes it much more efficient?

PASZTOR: I don't think there's any doubt about the fact that they have done what they've accomplished at a tiny fraction of what it would have cost under traditional NASA contracts. The secret, they would say, is that they don't have excessive government oversight, that they can actually build prototypes and do the work the way that they want to do it, without a lot of, essentially, double-checking and triple-checking.

The big dilemma for them is: Can they turn themselves from a sort of a boutique space development firm into essentially a production house, where they'll turn out rockets and spacecraft at much larger volumes? It's not clear, at this point, that they're going to be able to do that at anywhere near the cost that they've projected.

SIEGEL: Well, I mean, so far, Andy Pasztor, in terms of a business, does it check out, or is it, in effect, being carried by NASA contracts at this stage?

PASZTOR: I think, at this point, it's heavily dependent on NASA contracts and will continue to be for many, many years.

SIEGEL: Thank you. Thanks for talking with us.

PASZTOR: My pleasure. Certainly.

SIEGEL: Andy Pasztor covers aerospace for The Wall Street Journal.

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