By Earth to Earth Key Takeaways
- Air travel will be 20 times faster.
- Under 1 hour travel time to and from anywhere on Earth.
- Ticket price may be significantly higher than airlines, at least initially.
The experience for consumers will start with a boat ride from the departing city, to the rocket launch site roughly 20 miles offshore. Passengers will exit the ferry and begin boarding Starship. The reason it is in the ocean a few miles from any cities is strategic – for safety and to help minimize noise pollution.
In an interview, Gwynne Shotwell has described Earth to Earth in depth and states with confidence that this is something that will definitely exist.
After launch, Starship will exit Earth’s atmosphere and enter orbit, where the vacuum of space will allow frictionless travel at 16,777 miles per hour. Most journeys will take less than 30 minutes, and will be able to go anywhere on Earth in under an hour. For example, passengers will be able to travel from New York City to Shanghai, China in under 39 minutes. The same distance on an airplane would take 15 to 20 hours.
SpaceX has a list of estimated time-tables on their website:
The voyage will feel incredibly smooth, without any of the turbulence often experienced during airplane flights.
In addition to human transport, the US Transportation Command has teamed up with SpaceX to apply the technology in the area of distribution and logistics, where “point-to-point rapid movement of vital resources” would enhance a global supply chain. [1]
SpaceX’s Advantage
SpaceX profitability is important because the company needs to fund future space exploration endeavors; they aim to establish a base on the moon, colonize Mars, and invest in R&D to further advance rocket technology.
“In addition to vastly increased speed, one great benefit to traveling in space outside of Earth’s atmosphere is the lack of friction as well as turbulence and weather.“
– SpaceX
With point to point rocket travel on Earth, if SpaceX succeeds in being first to market, they will gain the first mover advantage. The first mover advantage for a space exploration company may be broken down into a couple components:
- Brand Recognition: SpaceX has done well with establishing strong brand recognition, although spending practically $0 on marketing.
- Technology: The company has made more than a few advancements and has achieved quite a lot in the way of space technology – from creating Starlink satellite network to landing rockets and making the first fully reusable ship, space travel is significantly cheaper than before. While a typical commercial airplane cannot fly more than one route per day, SpaceX will be able to run 10X the number of flights per day thanks to rocket reusability and faster vehicle turnaround time.
- Customer Loyalty: The company has built customer loyalty by consistently and successfully helping NASA with various projects [2]. NASA will certainly appear as a repeat customer into the future, and they seem to have a strong partnership.
- Consumer trust: SpaceX has a rigorous testing process and spent many years before attempting a mission carrying humans. SpaceX makes a point of putting safety first, and has spoken about their goal of making risk not small, but “tiny”. SpaceX has already, for example, sold its first commercial moon flight to art investor Yusaku Maezawa with the #DearMoon mission. [3]
- Competition: Space travel, exploration and associated technologies are a big whitespace in the market. There are few – if any – competitors entering the market for most of SpaceX’s services. The aerospace industry has Blue Origin, NASA (government), Lockheed Martin, and Boeing, but none of these companies are doing quite the same thing as SpaceX. Given the lack of competitors, SpaceX will play a major role setting the market price for this new type of air travel, which brings negotiating power and optimum competitive positioning. CEO Elon Musk has stated that “competition is good, bring it on” [4] in response to a question about Boeing as a competitor. The SpaceX Earth to Earth service will effectively compete with international airlines, but the target market / end consumer is a small portion of travelers who need to get to their destination quickly and have the financial means to do so.
- Economies of scale: As SpaceX serves these of customers, the company will continue to try to develop cheaper and better ways to launch people and cargo into outer space. As more people take journeys, the economies of scale that result from these innovations will create a more cost efficient means of doing so.
Carbon Capture
Elon Musk replied to a question about carbon-capture for rocket fuel, stating that “rocket flights will be zero-net carbon long term.”
Airplanes account for 9% of US emissions from transportation. Believe it or not, rockets will be a more environmentally friendly method of transportation than a traditional airplane.
Cost of Earth to Earth rocket service versus Airlines?
Airlines are actually not super profitable. Airlines have been quite un-profitable during the COVID-19 pandemic. Although large by revenue, airline expenses are also very large, so they operate on low margins.
For example, the cost of operations of one of the larger commercial airplanes, the Airbus A30, averages $27500 per hour, which extrapolates to roughly $550,000 total to fly from New York City to Shanghai, China.
The Cost of SpaceX Earth to Earth travel depends on a couple of factors. Passenger cost to break-even essentially comes down to cost per launch / number of passengers. Financials – total operating expenses and margins per flight to calculate minimum sales price to break even. These numbers aren’t yet published.
How much will consumers pay?
Note that carrying capacity (number of passenger seats) on Starship is around 1000 passengers for Earth to Earth, compared to only 100 passengers for a mission to Mars due to the need for spacious amenities on a longer mission. With more passengers onboard for an Earth to Earth voyage, costs could be driven down since it would be divided among more passengers.
Like airlines in the 1940’s, rapid Earth to Earth transit via rocket may likely be a luxury high end service for the first few years. There are 46.8 million people in the world who have a net worth of $1 million or more, so SpaceX probably has a sizeable target market to sell rocket seats.
The amount a consumer is willing to pay depends on the amount of value created. The best way to approach this by thinking about the value of a person’s time. A 20 hour NYC to Shanghai flight versus 1 hour rocket ship ride means 19 hours time saved. When you consider that someone travelling on business could add 19 hours of hypothetical productive time, the value becomes much more clear. Companies would even likely be willing to pay more for this service as they have to write off travel time as an employee payroll expense anyways.
The question is, how much is your time worth? The value is saving people time on air travel. How much is this 19 hours of time saved worth to you?
How much will tickets cost?
According to Head of Operations Gwynne Shotwell, tickets will be cheaper than a first class ticket, but more than economy. Gwynne has mentioned that SpaceX may likely charge a few thousand dollars per passenger per flight. Perhaps one day, the company may provide flights to consumers at a low enough cost to be affordable to the average person. We don’t quite know how much it will cost.
Sources:
- https://www.ustranscom.mil/cmd/panewsreader.cfm?ID=29ADE173-D927-8E46-7C6CBC100BAD9F71&yr=2020
- https://www.nasa.gov/johnson/HWHAP/welcome-home-bob-and-doug
- https://dearmoon.earth/
- https://www.entrepreneur.com/article/251129
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