LAUNCH MARKET COMPETITION AND PRICING PRESSURE

SpaceX's low launch prices, especially for communication satellites flying to geostationary (GTO) orbit, have resulted in market pressure on its competitors to lower their own prices.Prior to 2013, the openly competed comsat launch market had been dominated by Arianespace (flying Ariane 5) and International Launch Services (flying Proton).With a published price of US$56.5 million per launch to low Earth orbit, "Falcon 9 rockets [were] already the cheapest in the industry. Reusable Falcon 9s could drop the price by an order of magnitude, sparking more space-based enterprise, which in turn would drop the cost of access to space still further through economies of scale."SpaceX has publicly indicated that if they are successful with developing the reusable technology, launch prices in the US$5 to 7 million range for the reusable Falcon 9 are possible.

In 2014, SpaceX had won nine contracts out of 20 that were openly competed worldwide in 2014 at commercial launch service providers.Space media reported that SpaceX had "already begun to take market share" from Arianespace.Arianespace has requested that European governments provide additional subsidies to face the competition from SpaceX.European satellite operators are pushing the ESA to reduce Ariane 5 and the future Ariane 6 rocket launch prices as a result of competition from SpaceX. According to one Arianespace managing director in 2015, it was clear that "a very significant challenge [was] coming from SpaceX ... Therefore things have to change ... and the whole European industry is being restructured, consolidated, rationalised and streamlined."

Also in 2014, SpaceX capabilities and pricing began to affect the market for launch of US military payloads. For nearly a decade the large US launch provider United Launch Alliance (ULA) had faced no competition for military launches.Anticipating a slump in domestic military and spy launches, ULA stated that it would go out of business unless it won commercial satellite launch orders.To that end, ULA announced a major restructuring of processes and workforce in order to decrease launch costs by half.

The Falcon 9 carrying the Intelsat35e communications satellite into orbit.

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