Inflation Bites As SpaceX Forced To Hike Rocket Launch Prices By 20%

Ramish Zafar
A SpaceX Falcon 9 rocket during a launch earlier this month. Image: SpaceX

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Amidst the wave of inflation that has hammered the earnings of technology firms such as NVIDIA, AMD and Intel, SpaceX has also increased the rates of its launch services. The company, which still offers the lowest rates in the industry to a myriad of destinations such as low Earth Orbit (LEO) is now charging 20% more for its rideshare programs, but at the same time, it has reduced the minimum prices offered to its rideshare customers. SpaceX has also increased the prices of its launch vehicles, with the base price for a Falcon 9 rocket sitting at $67 million for a trip to geostationary orbit (GTO).

SpaceX Now Charging $1.2 Million To Place 200 Kilograms In Low Earth Orbit Through Its Rideshare Program

The first signs of inflation hitting SpaceX came when the firm increased the prices for its Falcon 9 and Falcon Heavy rockets. A fact sheet for both that is available on the comapny's fwebsite reveals taht prospective customers will now be charged $67 million to place 5.5 metric tonnes into a geostationary orbit with the Falcon 9 and $97 to place 8 metric tonnes in the same orbit. On a per kilogram basis, this translates to $12,181 for the Faclon 9 and $12,125 for the Falcon Heavy.

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Prior to the adjustments, the flights for the Falcon 9 and Falcon Heavy had cost $62 million and $90 million, respectively. SpaceX uses Rocket Propellant 1 (RP-1) or Kerosene as its rocket fuel, and the prices for Kerosene heating oil jumped to record highs earlier this year in June in the aftermath of the Russian invasion of Ukraine.

SpaceX, on the other hand, raised prices for its rocket launches in March, going on to caution customers that:

Pricing adjustments made in March 2022 to account for excessive levels of inflation. Missions purchased in 2022 but flown beyond 2023 may be subject to addditional adjustments due to inflation.

HEATING-OIL-FUTURES-OCTOBER-2022
JET-FUEL-PRICE-OCTOBER-2022

Additionally, the prices might not come down soon if futures data for kerosene heating oil is any indicator. These futures, which 'price' a commodity months ahead, currently peg the pricing of heating oil to sit at $4.18 in four months time and have gone up by a massive 66% over the past year. However, they are still below their 52 week high level of $5.86

The rising prices have also forced SpaceX to increae its rideshare program costs. These costs were first increased in March as well, with a $1.1 million price tag for 200 kilogram payload to sun synchronous orbit. Previously, the firm had charged $1 million for the same payload and $5,000 for an additional kilogram, and the increase saw the per kilogram costs also grew by $500.

Now, the latest reading on the SpaceX rideshare website shows that the firm is charging $1.2 million for the same 200 kilogram payload but it has kept the additional price increase per kilogram at the same level.

However, now, SpaceX also places a minimum price tag of $300,000 for payloads weighing up to 50 kilograms, in a divergence from its earlier options that had the same price tag for all payloads up to 200 kilograms. The base price for 50 kilograms leads to a per kilogram price of $6,000, slighlty lower than the marginal price for an additional kilogram.

A detailed look at the payload weights of the Falcon 9 rideshare should explain the majority of the capacities required by the customers, but on the surface, it appears to be an attempt to retain customer interest as prices for heavier payloads go up.

SpaceX lets its customers launch as mugh as 862 kilogram payloads per port on the Falcon 9, and a full plate is capable of handling 300 kilograms, with one quarter and one half being able to support 100 kilograms and 200 kilograms, respectively.

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