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Thirty Lunar Lander Seats: Golden Spike's Magic Number to the Moon

Satellite Technology

Satellite Technology Feature Article

December 18, 2012

Thirty Lunar Lander Seats: Golden Spike's Magic Number to the Moon

By Doug Mohney, Contributing Editor

Golden Spike made it clear it needs to sell lots of commercial astronaut seats to the Moon at a list price of $750 million per person to get its lunar landing "railroad" going. But how many does it need to sell to cover its costs? Will other revenue be able to contribute to the bottom line?

To get to launch of the first mission, Golden Spike CEO Alan Stern says the company will probably spend between $7 billion to $8 billion in research and development, with a good chunk of money going to building a lunar lander and EVA suits, the only pieces of technology that aren't "off the shelf" for the company's system to transport two astronauts to the Moon's surface. Let's split the difference and it will be $7.5 billion in startup expenses.

Once the system is set up and all hardware developed, the per-mission price is $1.5 billion. Assuming there's about $500 million in disposable hardware per mission between two rocket launches, a lunar lander, customized EVA suits and other incidentals such as staffing a mission control center, that leaves around $250 million per mission to pay back R&D before you get into "profit." You'd have to sell 30 seats/15 surface missions by my math to break even, assuming a 33 percent profit per mission.

Clearing $100 million per mission -- a more conservative number -- translates to selling 75 seats or 37 to 38 missions. Once it starts operations, Golden Spike intends to average two missions a year, so clearing $100 million per mission means the company would have to operate for 19 years just to break even. At $250 million profit per mission, that's 7.5 years to break even.

Not included in this back-of-the-envelope model are two factors: Lower costs over time and other revenue sources. Launch providers would presumably be able to get more efficient building rockets at a steady pace. Reusable rockets are within the realm of possibility over the next decade, pushing costs down further. Adding in a lander that can be refueled and parked in lunar orbit for multiple missions would also drive per mission costs down. 

There's also the ability to provide rideshare capability to put payloads and experiments on the Moon. If researchers have equipment they'd like to fly to lunar orbit or the surface, they could pay Golden Spike for delivery on a flight. Researchers wouldn't have to pay for a dedicated flight and Golden Spike can collect some revenue if they've got the available space and mass.

Golden Spike also expects to bring in revenue from merchandising, advertising and media rights. While T-shirts, caps and plastic models might not bring in big dollars, CEO Alan Stern compared broadcast rights for a seven-day mission to Olympic coverage for countries that would have a participating astronaut. In Europe, countries such as France, Germany, Spain and Italy will pay between $130 million to $227 million for Olympic broadcast rights between 2014 and 2016. Roll in naming rights for vehicles and you could see where either the $750 million per seat list price could be pushed downward with other revenue streams.

It's an intriguing financial model from the revenue side, especially if you can build a package of service, media rights and advertising to cover costs. However, the anchors to getting started are people and organizations willing to make commitments to fly. I'm going to discuss Golden Spike's potential customers in my next column.

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Edited by Rachel Ramsey

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