Privatization of Space

Industry has been a part of space flight for quite some time. Let us not forget the big role companies such as Boeing or Lockheed Martin play in space flight since decades. I was fortunate to visit the ULA factory in Decatur, Alabama this summer and I was honestly impressed. ULA – United Launch Alliance is a joined venture between Boeing and Lockheed Martin, and it is the manufacturer of Delta II, Delta IV Heavy and Atlas V. I witnessed the manufacturing of both Delta IV Heavy and Atlas V on the factory floor at ULA and I could say that was state of the art work. ULA’s main customers are NRO, Air Force, and NASA of course, and they were sold out seven years in advance at the time I visited the factory. From this perspective, I found privatization of space flight really useful. I will not mention SpaceX in my post for this week because I simply do not consider SpaceX to be an example of a private company, with NASA funding 80% of its endeavors ($800 million).

I would say that privatization of space can be beneficial if a couple of factors are considered into this equation. First of all, the industry will never focus on ideals such as NASA did to beat the Soviet Union to the moon in the Sixties. The industry will always focus on profit only. As long as space flight could be profitable, private companies will jump in. Since I used as an example ULA, I would mention that such an endeavor is a recipe for success: ULA makes rockets, customers buy the rockets; ULA makes money, customers fulfill their needs.

Second of all, for space flight to be profitable on a large scale, the market must be expanded. At the moment, the market offered to commercial space is only transfer to ISS. However, rational investors will not put their money into this, because the market is too small and it will not last long enough. Here is where the role of government is important. For example, if NASA goes to the moon, something that could work better in the long run for the industry would be lunar cargo. Delivering only cargo to the moon, having no crew would also mean no risk, so private companies could develop their capability to deliver. The value of payload would lay in its location (the moon) and not the content, so they can risk losing it without any serious consequences. Lunar market would be big, governable, and long-term. Once the government goes to the moon, the industry can come up with many ideas: providing electricity, habitat etc., and therefore other and larger commercial activities could happen. But it is probably only a matter of time until such enterprises will occur.

Image source: spaceflight.com