A Ticket pricing strategy for an oligopolistic space tourism market

Abstract

Abstract It is important for any new launch system to develop a successful pricing strategy and to optimize launch system parameters to receive a high economic profit. A question arises, what will happen when an existing suborbital flight market (the first likely to be established in space) is interfered with by a new established orbital flight market for space tourism. There is a risk that the suborbital space tourism market could be almost instantly displaced when a product capable of reaching orbit was introduced. This is best discussed using the following three cases whose results are presented in this paper. Case A presents a ticket pricing strategy for a suborbital and orbital vehicle if the two vehicles do not compete in the same market. Case B shows the necessary ticket pricing strategy for a suborbital vehicle if there is competition from an orbital flight operator. However, the suborbital vehicle would not be able to keep up with a drop in ticket prices due to its obsolete characteristics. Thus, the suborbital vehicle would be forced to stop operation in the year when flight costs became higher than flight receipts as shown in case C.