Burt Rutan thinks that the operating cost of EADS's proposal will be too high. I'm actually much more concerned (as is he) with the development costs. I've seen an estimate of a billion Euros. At 200,000 euros a ticket, you'll have to sell about five thousand rides just to get back the non-recurring costs, and that doesn't even include the cost of the money.

I think that the suborbital market makes sense, but not if you have to spend that much money up front. I think a smart entrepreneur could get to orbit for that amount (Elon has only spent a tenth of that amount, though he's not returning). I just don't think that a conventional player, like EADS (or Boeing, or Lockheed Martin) has either the cost structure or the risk acceptance to take on a program like this and make it successful. I suppose, though, it's possible that they're willing to take a bath on it if they expect it to give them a pre-cursor for a much larger point-to-point market, or military applications.

[Reading a few more articles]

Ah, they're not committed to it. They're just floating a trial balloon:

"We are offering a profitable system and have given ourselves until early 2008 to find industrial partners to share the risk, private investment of around €1 billion and an operator for the journey. We will not do it without that," he said.

If I were a betting man, I'd put money on it not happening. One thing it does show, though, is that the giggle factor is completely gone.

[Afternoon update]

Here are some more details on their business plans:

Auque said Astrium and EADS have investigated the business model in recent months and concluded that their project has sufficient advantages compared to similar efforts under way by start-up companies in the United States to attract as many as 4,500 paying customers per year by 2020.

At $267,000 per ticket, that customer volume would generate gross revenues of some $1.2 billion per year.

Yes, it would. If the price hasn't plummeted by then due to competition (e.g., John Carmack thinks that he can get a price in the few tens of thousands).

There seems to be a little hubris here:

Astrium has surveyed other space-tourism projects, mainly in the United States, and found most of them lacking in engineering or business-model seriousness. "There are those who think you can design a rocket plane in a garage," Laine said. "Suffice it to say that that is not our niche."

"Lacking in business-model seriousness"? Apparently, his irony meter is busted.

No, your niche is to bilk European taxpayers out of their hard-earned dollars and build white elephants. Sounds like son of Concorde, to me. I think I'll rely on the people who are doing it with their own money.

[Update about 2:30 PM EDT]

Am I the only one who thinks a one-week turnaround ridiculously unambitious for a suborbital vehicle? If that's true, they won't be competitive, because in order to ramp up their supply to meet demand, they'll have to build more vehicles, whereas a more nimble competition will simply increase flight rate with their existing fleet.

One thing it does show, though, is that the giggle factor is completely gone.

SpaceShipOne made it merely a smirk factor, and now it's quite distinctly a "hmm" factor.

If EADS are seriously considering spending $1B on developing a suborbital vehicle then the giggle factor is most assuredly alive and well.

I suspect that it's Boeing though who are doing the most chuckling though. Not only can EADS not beat them with the A380, they're losing to a guy who manufactures homebuilts.

I can guarantee that what EADS is doing in the background is going to ESA for Public/Private partnership funds which will drop their development costs by 50%. In the end it is a dodgy proposition as ESA politics is just about as efficient as NASA's.

Oh FYI

The branch of EADS doing this is the German side. The A-380 is from the French side of the family.

Adrasteia nails it, EADS needing a billion to "be serious" is laughable. The fact that they are able deliver such an attitude with a straight face just proves that how far off base they are.

Speaking about ESA funded projects, what's the status of the orbital recovery project?

Robert Heinlein once said, “Definition of an elephant: a mouse designed to government specifications.”

Update:
Definition of Astrium: SS2 designed to the specifications of a bloated government subsidized manufacturer.

Would the billion include conventional aircraft flight approvals?

One of the reports I read also mentioned the downrange capabilities - a billion for that might make commercial sense if you're looking at other markets. I'm still not personally sold on the size of the sub-orbital joy ride market.

Would the billion include conventional aircraft flight approvals?

Presumably it would, since the Europeans don't (yet) have an equivalent regulatory classification to our suborbital vehicles. This could actually give US entities a competitive advantage over European ones.

It could and it couldn't. It depends if the sub-orbital classification would be extended to allow global operations from normal airports carrying passengers under normal conditions.

If EADS could get this treated internationally as a conventional aircraft then I think they'd have an advantage.

I don't actually for a moment think that's plausible myself but I'm just pointing it out.

If this thing ever gets built, it could open up some business opportunities a few years from now. Motorola/Iridium spent billions developing the Iridium constellation. When their costs were too high, they declared bankrupsy. Someone bought the whole setup for pennies on the dollar ($60 million, IIRC). It seems likely this vehicle will go the same way. The costs are just too high. When they declare bankrupsy on the project, someone might be able to buy them for a song (if they aren't scrapped), lowering the price enough to be competitive.

You can't buy a working industrial base at firesale prices. Otherwise someone would have bought the concorde.

A lot of people seem to think that a billion euros
is too high for developing this project, but I remember reading that it has taken eclipse aviation several hundred million dollars to develop the eclipse 500. It goes without saying that the astrium spaceplane is a far more complicated vehicle.

I agree that he (laine) is being a bit cheeky when he criticises other projects but he does have a point that the rutan plan - two vehicles, hybrid rocket - lacks business model seriousness. I.E its operational costs will be high. And I suspect he is thinking of the rocketplane xp when he talks about engineering issues...

Do I think that this project will take off? No, but sure would be a nice way of taking a ride into space.

> It goes without saying that the astrium spaceplane is a far more complicated vehicle.

You're confusing performance and complexity.

Most of the complexity in a modern aircraft is in the avionics, whose requirements are not directly related to vehicle performance.

There's probably no reason for the suborbital spaceplane to have all-weather capability, for example.

I'll just add that I hope every single firm trying to make a go of this succeeds, but some clearly deserve to be more equal than others. To think they could just steamroller their way to dominance of a market whose success depends on leveraging every dollar suggests that EADS will have a steep learning curve ahead of it. But I congratulate them on their interior design, which does have distinct advantages over the (initial) concept unveiled by Virgin.

An interesting thing to think about: Once this market turns into a transportation sector, all those windows and handholds may become rather superfluous--a lot of people in the general public would rather not see the entire Earth hanging above/below/beside them, and I'm guessing most suborbital p2p travelers would eventually lose interest in the novelty of floating and just stay in their seats. It would be interesting to speculate about how seating will be efficiently arranged in an optimized suborbital transport. With two hours to anywhere, they might just pack people into little coffin-like spaces with tv screens in front of them. If you were flying to Tokyo, would you be more inclined to pay $3,000 for a two-hour coffin ride punctuated by ten (?) minutes of giddy buoyancy, or $800 for an 11 hour voyage in a coach seat? Of course they might have to work out a consistent g axis for that kind of "sardine can" concept, but I don't see why it wouldn't be doable.

You can't buy a working industrial base at firesale prices. Otherwise someone would have bought the concorde.

The British and French governments effectively wrote off the Concorde's R&D cost which isn't that different from declaring the project bankrupt. Even with that advantage, the Concorde had high operational costs, a small passenger capacity, limited range, and a limited market. As beautiful as it was, the Concorde wasn't a practical airliner.

As for the Eclipse 500, it did cost about $500 million. However, that price included the full cost of FAA aircraft and manufacturing certification, a hideously expensive process. Even a two seat private plane can cost tens of millions of dollars to get certified. At least in the US, space tourism vehicles aren't required to achieve that level of certification. FAA certification to the standard of standard aircraft would scuttle space tourism.

Notes:

Recently a German EU official made it pretty clear the EU will *not* fund this rich men joyride, so to speak.

It may be the posturing of deriding the competition by EADS is not actually hubris but FUD. FUD to scare away potential costumer loss to the competition by claiming they are unsafe.

I sincerely doubt EADS will manage to get funding for this and are way over their heads, considering the performance of their Airbus division A380, A350, not to mention the A400M, even if Sarkozy injects gobs of cash to prop up Airbus as is being claimed.

Astrium is not the german side of EADS. Astrium is
multinational. BTW the proposal is issued by Astrium Fr (les Mureaux).