SpaceX raises prices to lower them

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Spacex has updated its prices for sending payloads to Earth orbit, Geosynchronous Transfer Orbit and even Mars(Credit: SpaceX)

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SpaceX has done so well in bringing down launch costs that it's raising its prices. That may seem paradoxical, but all is not what it seems. As well as making great strides towards its goal of a reusable launch system with three sea landings in a row, SpaceX has made improvements in rocket engine technology which mean that while launch prices look like they are going up, they're actually going down.

If you regularly visit SpaceX's website you may have come across a list of prices for sending up payloads to Earth orbit (LEO), Geosynchronous Transfer Orbit (GTO) and even Mars, on the company's Falcon 9 and the still under development Falcon Heavy. Until recently, the price of a Falcon 9 launch was quoted as US$61.2 million. But a couple of weeks ago, this changed to US$62 million. At first glance, this clearly means for all of Elon Musk's boasts about wanting to bring down launch costs by 30 percent, that didn't stop SpaceX from jacking up the ticket prices by US$800,000 dollars. A clear example of corporate hypocrisy? Not really.

Though the new landing technology has yet to have any impact on launch costs, the improved engines on the latest Falcon 9 have. Between tweaking the efficiency of the nine Merlin engines and the trick of using supercooled liquid oxygen to carry more oxygen, SpaceX was able to boost the low Earth orbit (LEO) payloads carried by the Falcon 9 from 13,150 kg (28,991 lb) to 22,800 kg (50,265 lb).

Doing the sums, this means that under the old prices, a Falcon 9 cost $2,111 per pound to reach LEO, while the improved version costs $1,233 per pound. The reason why the overall price is higher is because the rocket now carries a much larger payload. It looks higher because launch costs are an all-or-nothing system.

To put this into perspective, if you book a flight on a plane that's half empty, you get your seat for the same cost and might even be able to get boosted to First Class for a nominal fee. On the other hand, if airlines, operated like launch companies, you'd have to pay for all the empty seats as well as your own. This is why SpaceX and others often launch multiple payloads and offer piggyback fares to balance the weight.

In other words, you get what you pay for. In this case, a lot more tonnage at a cheaper per pound cost.

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