NASA’s High Launch Costs Despite Reusable Rockets

Launch Cost Trends and Market Dynamics

Over the past three decades, the nominal price that NASA pays for orbital launch services has climbed, not fallen—even as private companies have introduced reusable rockets and achieved near-daily access to Earth orbit. A forthcoming study in the July issue of Acta Astronautica finds that, adjusted for inflation, NASA’s average annual payment for launches rose by about 2.8 percent per year between 1996 and 2024. Those figures stand in stark contrast to the expectation that privatization and reusability would drive prices down to an equilibrium level.

Today, SpaceX flies over 100 missions per year, integrating fully autonomous first-stage landings with rapid factory-to-pad operations. Yet NASA’s internal data show that its per-mission launch contracts on SpaceX’s Falcon 9 average roughly $100 million—still higher than the inflation-adjusted Delta II rates from the late 1990s. Why hasn’t supply-side disruption translated into lower government costs?

Rise of Reusable Launch Vehicles

SpaceX’s Falcon 9 family marked the first operational recovery and reuse of an orbital-class booster. Key specifications include:

• First-stage thrust: 7,607 kN at sea level (nine Merlin 1D engines burning RP-1/LOX).
• Payload to LEO: ~22,800 kg on expendable flights; ~15,600 kg on reuse.
• Recoverable hardware: first stage (70 percent of vehicle cost) and payload fairings (~10 percent).
• Turnaround time: as low as 48 days between flights in 2024.

Reusable flights reduce the marginal manufacturing cost per booster by amortizing fixed hardware investment across multiple missions. At a mid-teens million-dollar internal cost per launch, SpaceX undercuts traditional expendable vehicles—even as it sells Falcon 9 missions to NASA at roughly $62–70 million list price.

NASA’s Procurement Model and Contract Structures

NASA’s Launch Services Program (LSP) uses fixed-price contracts for most science and exploration payloads, but it still carries a “government premium” for priority scheduling, specialized payload accommodations, and deep integration oversight. Key elements include:

• Firm-Fixed-Price (FFP) versus Cost-Plus contracts: FFP for science missions, cost-plus for crew/cargo (CCtCap) vehicles.
• Special requirements: strict contamination control, launch-site instrumentation, and unique orbital insertion accuracy (down to ±2 km at GTO).
• Schedule premiums: 6–10 percent surcharge to guarantee pad access within contracted windows.

These add-ons mean that NASA routinely pays more per kilogram to orbit than commercial telecom or rideshare customers, who accept broader launch schedules and standard payload accommodations.

Technical Roadmap and Future Cost Drivers

Looking ahead, the next generational step is SpaceX’s Starship/Super Heavy system:

• Super Heavy booster thrust: ≥72,000 kN (33 Raptor engines).
• Full-stack payload to LEO: ~150,000 kg.
• Reusability goal: 1,000+ flights per booster.
• Target marginal cost: $2–5 million per launch.

If achieved, Starship could reduce NASA launch prices by a factor of five or more. Similarly, ULA’s Vulcan and Blue Origin’s New Glenn—both partially reusable and powered by BE-4 methane engines—may inject competition, but both lack Falcon 9’s flight heritage and space-rated reliability data.

International Competition

While U.S. providers dominate government contracts, state-subsidized players abroad also influence global pricing:

• Ariane 6 (Europe): Expendable, ~20,000 kg to LEO, estimated commercial list price €75–85 million.
• Russian Soyuz-2: ~8,200 kg to LEO, ~$50 million but limited export licenses and political risk.
• China’s Long March 5B: 25,000 kg to LEO, state-controlled pricing, rarely open to Western payloads.

Subsidies and currency exchange rates complicate straightforward cost comparisons, but global launch capacity now comfortably exceeds NASA’s modest annual payload needs.

Policy Recommendations and Market Equilibrium

Moon Kim’s Acta Astronautica paper concludes that mere introduction of a new provider (SpaceX in 2016) did not shift NASA’s upward cost trajectory. Policy experts and GAO audits recommend:

• Increased use of competitive bid rounds across multiple U.S. and allied providers.
• Expanded rideshare opportunities for medium-class science payloads to leverage economies of scale.
• Stronger cost-plus oversight to cap schedule priority surcharges.
• Investment in next-generation launch infrastructure (e.g., high-rate composite tooling, autonomous pad operations).

With ULA’s Vulcan and Blue Origin’s New Glenn now operational—or entering qualification—NASA may see downward price pressure by late decade. However, a true step-change awaits Starship’s fully reusable architecture.

Conclusion

Despite the transformative impact of reusable launch vehicles, NASA’s historical procurement practices, priority scheduling premiums, and specialized mission requirements have kept average launch costs rising. As new entrants like Starship, Vulcan, and New Glenn reach maturity—paired with policy reforms to increase competitive pressure—NASA stands on the cusp of the long-promised era of low-cost, high-cadence access to space.