Here's How SpaceX Saved $120 Million With (and Without) a Really Big Fishnet

Source Motley_fool

Key Points

  • In 2017, SpaceX set a goal of recovering and reusing its rocket fairings.

  • SpaceX just launched and recovered a fairing half that's been reused 40 times.

  • Each time a fairing is reused instead of being bought new, SpaceX saves at least $6 million.

  • 10 stocks we like better than Space Exploration Technologies ›

"Imagine you had $6 million in cash on a pallet flying through the air that's just going to smash into the ocean. Would you try to recover that? Yes, you would." -- Elon Musk, 2017

That's how Elon Musk described the rationale behind Space Exploration Technology's (NASDAQ: SPCX) plan to deploy boats at sea, equipped with gigantic nets, to catch one (or both) halves of the fairings from its Falcon 9 rockets after they detached to deploy cargo in orbit. Each complete fairing, said the CEO, cost $6 million to build -- or roughly 10% of the cost of an entire Falcon 9. (That was back in 2017. Thanks to inflation, the cost has reportedly risen to $8 million today.)

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And so, the CEO's plan:

"My guess is in the next six months we'll figure out fairing recovery. We have a special boat to catch the fairing; it's like a catcher's mitt but in boat form." -- Elon Musk 2018.

Rocket headed into space through clouds.

Image source: Getty Images.

40 x $6 million / 2 = what?

It's been eight years since Musk made this promise. So, how are things going for SpaceX? Well, there's bad news and good news...and better news:

Over the past six years, Musk & Co. have launched more than 600 Falcon 9 rockets, and deployed probably well over 1,200 fairing halves. (Once split open, each fairing half comes back to Earth separately). The company initially outfitted two boats with gigantic, raised nets to catch the fairings as they parachuted back to Earth. It caught a handful of fairings this way, but abandoned the effort in 2021.

That's the bad news.

The good news is that SpaceX eventually decided it didn't need to catch the fairings, but could simply guide them to a pickup point using thrusters and parasails, then fish them out of the ocean before they sank, refurbish and reuse them. This has been the procedure for the past five years.

And this is how SpaceX was able to announce last week that at least one fairing half has now flown and been reused an incredible 40 times. (Note that this refers to one particular piece of equipment having been used 40 times. Across SpaceX's entire inventory, many more fairings will have been reused many times.)

And here's the best news of all: Just reusing that one specific half of one specific fairing -- which must have cost at least $3 million to build and may have cost as much as $4 million -- saved SpaceX $120 million. That's roughly enough money to build two complete Falcon 9 rockets. The money saved from reusing all the other fairings SpaceX has used over the years may have been enough to build an entire fleet of Falcons!

What it means for SpaceX

As SpaceX has evolved from a company that launches rockets to one that primarily makes its money from the Starlink satellites launched by those rockets, the importance of saving money on rocket parts has dwindled. As SpaceX evolves even further from a company that launches rockets to a company that provides satellite internet to a company that does $26.5 trillion annually selling artificial intelligence services...well, saving $3 million on a rocket fairing will probably resemble, ever more, a rounding error on the income statement.

Still, SpaceX's relentless focus on keeping costs low is a big part of why it can launch payloads at a lower per-kilogram price than any other space company on the planet. It's how it can launch Starlink satellites so economically.

As SpaceX begins saving even more money by reusing entire spaceships (Starship), it will also be able to launch artificial intelligence satellites into orbit more economically.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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