The Case against Space Tourism - It's not the 'killer app' we imagine

Ian Flint · 2004-07-07 15:08:22

ANTIcarrot, I think he gave some Fox News "Fair and Balanced" answers instead of the BBC answers you wanted. :laugh:

JimM · 2004-07-07 15:15:19

1) What circumstances do you believe a theoretical spaceline would have to pay out compensation?
2) What amount do you believe would be legally reasonable?
3) What makes you think this beyond your opinion?

(I assume that when you say here "beyond your opinion" you really mean "beyond your competence".)
To answer 1) : In any circumstances where the passengers come to grief, be it fatally or not.
To answer 2) : I refer you to my answer to 3).
To answer 3) : I am not a lawyer.

My answer to 3) is my reason for basing my cost estimate of what all this might come to--in particular what allowance has to be made for this risk when calculating the cost of operating the vehicle--in the form of an estimated size of the insurance premium that would have to be paid.

Thus the very question you claim I have not answered was the direct reason for introducing the extract from the other study into this thread--to illustrate how the premium might be calculated.

Now it is true (as you proposed) that part or all of the cost of the passenger or cargo insurance permium cost might be eliminated by passing the risk back from the vehicle operator to the passengers themselves or the owners of the cargo. However, in principle the passenger or cargo owner would have to pay what would be essentially the same premium, and so the actual cost to the customer of using the vehilce would not change. And it is the actual (total) cost to the customer that I am saying prices orbital tourism out of business-- at least on this sort of basis, for the time being.

BTW, there is another risk that would have to be covered and does not seem to have been considered so far: third party liability.

Apart from the obvious 3rd party risk, like crashing down onto a cow in the middle of a mid-western field, there's also the more spectacular possibility of charging into the $100 billion ISS and destroying it... I just thought it might be worth mentioning...

JimM · 2004-07-07 15:20:23

ANTIcarrot, I think he gave some Fox News "Fair and Balanced" answers instead of the BBC answers you wanted.

Well, your psychic powers are working overtime today, seeing how your post appeared before my response to ANTIcarrot.

Ian Flint · 2004-07-07 15:33:47

So clark got some "Fair and Balanced" answers, too. I still think you should apply at Fox.

To answer 1) : In any circumstances where the passengers come to grief, be it fatally or not.
To answer 2) : I refer you to my answer to 3).
To answer 3) : I am not a lawyer.

I mean, what is this stuff?

(I assume that when you say here "beyond your opinion" you really mean "beyond your competence".)

Don't take it personally, man. Even Lord Zubrin the Great ::trumpet:: has to show some sort of evidence or other scientists' opinions for people to take him seriously.

JimM · 2004-07-07 16:34:45

So clark got some "Fair and Balanced" answers, too.

I am not responsible for the ignorance or stupidity of my questioner. I will not waste my time or that of others answering questions already answered clearly and directly on several previous occassions.

Considering the codswallop he was writing--again! my answers were no less 'fair and balanced' than he deserved.

I mean, what is this stuff?
(I assume that when you say here "beyond your opinion" you really mean "beyond your competence".)

A necessary question, as "beyond your opinion" is a meaningless expression in the English language--as you presumably know if you speak English.

Don't take it personally, man.

Oh I don't, I don't. It's just, as I said, that I don't suffer fools gladly. I've got better things to do with my time than to waste it answering idiotic questions from ...well... idiots.

I had thought it was possible to have a serious debate here, but it seems I was wrong. Which is sad... not so much for me as for this board. I have some ideas I'd like to knock about and get reactions to, but clearly that will have to happen elsewhere now.

BTW, if you want to look at this in Fox News versus BBC terms, just remember that the job of the TV reporter is to ask the questions, not supply the answers. Answers are the consquence of questions, not the other way round.

So if you think this thread has become more like Fox than BBC, don't blame me but ANTIcarrot, clark and your good self.

ANTIcarrot. · 2004-07-08 03:30:18

If you had bothered to do some reasearch for one second JimM, you might have been able to find something (anything!) to back up your case. Some statistical evidence, point of law, or case study you could site. But you didn't do this once. But lo and behold! Within a minute (when *I* look) I find something that renders everything you've said to be complete and utter BS.

The Warsaw Convention covers international airline flights, and absolutely limits the compensation to US$75,000. No exceptions. At all. Period. Ever. Since the flight plan would always involve leaving US airspace for a substantial period of time, the flight would count as international, whether or not the rocket actually made it out of US airspace. The reasoning behind this is that since the flight is leaving US airspace, any accident could be covered by the laws of more than one country. For example if a US flight breaks up over France and the debris kills people on the way down, the accident would fall under US and French law. To avoid conflict, arbitration woudl be saught under Warsaw, and this applies from the 'start' of the flight.

So the answers turn out to be:
!) Unknown.
2) US$75,000
3) The Warsaw Convention and the United States 11th Circuit U.S. Court of Appeals both back this convention.

External evidence - to prove this is something beyond my opinion:
http://www.aviationlawcorp.com/content/ … tml#warsaw

I am not responsible for the ignorance or stupidity of my questioner.

But are you responsable for your own ignorance or stupidity? The Warsaw Convention is a thumping big knock down to your entire case. For your case to hold together you would have had to explain why Warsaw doesn't apply. You didn't, which was, quite frankly, rather Fox News of you.

ANTIcarrot.

Algol · 2004-07-08 05:06:38

Wow, heated discussion. I dont want to get caught in the crossfire but from the linked article above.......

IATA in cooperation with the United States Department of Transportation sponsored an international intercarrier agreement on passenger liability that was adopted by airlines starting in 1997. Today, over 120 airlines have signed the agreement. The intercarrier agreement removes the $75,000 (U.S.) limit of liability and allows passengers to recover full compensatory damages for physical injury or death in an "accident," according to the laws of their domicile, or place of permanent residence. After 1997, almost all the airlines have agreed that they can be sued for the entire amount of damages that a victimâ€™s country of domicile would normally allow the family to recover. The victims only have to show that the airline was negligent in causing their injuries.

The new Intercarrier Agreement modifying The Warsaw Convention theoretically exposes the airlines to unlimited liability. But the amount of damages for the plaintiffs is still dependent upon the laws applied by the country that has jurisdiction over the lawsuits.

JimM · 2004-07-08 08:02:48

The new Intercarrier Agreement modifying The Warsaw Convention theoretically exposes the airlines to unlimited liability. But the amount of damages for the plaintiffs is still dependent upon the laws applied by the country that has jurisdiction over the lawsuits.

Thank you Algol.

I was aware that the Warsaw Treaty $75,000 limit was history, which was why I did not mention it. So that takes us right back to where we were before ANTIcarrot introduced this particular red herring.

So after that trip round the houses the answers turn out, after all, to be:

!) In any circumstances where the passengers come to grief, be it fatally or no, plus any third party damages.
2) I refer you to my answer to 3, but in principle it could be infinity.
3) I am not a lawyer and don't intend to pretend I am one, unlike some other people.

...which is pretty much back were these questions came in.

(ANTIcarrot, on the basis of this example demonstration of your forensic skills you'd get slaughtered in a courtroom.)

BWhite · 2004-07-08 08:13:09

Here is another question. . .

Would flying sub-orbital violate the conditions of your normal life policy? Imagine your typical millionaire willing to spend $100,000 on a thrill, but he dies and the life insurance company refuses to pay out the $2,000,000 policy to the widow and the guy's kids need to drop out of college (or transfer from Yale to mid State Tech for lack of tuition money).

The widow sues the carrier for failing to disclose that flying suborbital invalidates standard whole life policies.

Unless the passengers can be insured for a reasonable price, no one will fly. (Or very very few and foolish.)

= IF = solid companies will write life insurance for suborbital passengers then there is no issue to discuss. A $1,000,000 life policy is part of the ticket price. If you die your widow gets $1,000,000 and all other claims are released.

Easy enough to do, today.

= = =

Insurance companies are the ultimate experts on safety. If they will sell you insurance at a reasonable price, its probably safe.

If not, the negative publicity will kill off your market of tourists.

JimM · 2004-07-08 08:58:59

The widow sues the carrier for failing to disclose that flying suborbital invalidates standard whole life policies.

Most life policies today have lists of exclusions for all sorts of dangerious activities (skiing, hang-gliding, etc.) This would presumably be another. But no-one in their senses who has dependents to leave behind would ski or hang-glide without taking out a separate policy to cover these activities. What we have here is the same situation writ large.

Insurance companies are the ultimate experts on safety. If they will sell you insurance at a reasonable price, its probably safe.

Yes, I agree. I certainly think sub-orbital trips will prove (relatively) easy to cover in the manner you describe.

I have also being trying to make the point that since it is virtually impossible to know what the actual outcome of a claim for damages would be, the only sane way to assess the cost at this point in the proceedings is to ask what the insurance cost of covering for it would be likely to be. What that needs is not the knowledge of a lawyer or legal precidents to call down by the score, but common-sense knowledge about how insurers assess risk and what they are likely to set premiums at.

The problem arises when we look at flights to LEO, where the ticket price goes up, probably by a factor or 20 to 50 over the suborbital price -- so we're looking at a market that can only be afforded, by and large(*), by billionaires or near-billionaires.They tend to have very much higher life cover.

(*) exceptions: competition winners and reporters. But there won't be anything like enough of them to sustain the business on its own.

clark · 2004-07-08 09:24:50

I know the Scot's wear kilts, but I didn't know that made them act like girls. :laugh: You get sooo emotional Jim. take a midol. No wonder those wankers were able to push your people around- start hollering all blue in the face, then just cry about how silly and stupid everyone is.

Anyway, let's just crack the nut. This whole cost thing and insurance thing have two parts. The R&D development side, and the insurance premium side.

Well, the R&D costs an arm and a leg and goes directly into the final cost of any future venture, right? I saw something like math a few posts ago, so I'll just assume as much (I'm sure Jim will yell at how bloody stupid I am, but whatever)

Now, if I recall, it seemed to be agreed that any flight units beyond the first three would be fairly cheap (in comparison to the first three production units). So, what i suggest is a 1 billion dollar prize for the first orbital SSTO that can take 10 tons LEO. Government and privately funded. This will help defer the cost of R&D, and act as the proving ground (exactly the model used by the X-prize and Scale Composites...you'll see).

So, I form a company with Jim (he can be my lawyer). We build this orbital thingy to win the prize. It costs more than the prize is worth, but that dosen't matter. Jim is screaming at me of course, but he is a Scot- and they're easy to slap around. So, after we win, we sell the patents related to the ship to interested parties. We do some more experiments, refine the ship a bit more to make it safer. We do shows and take up the occasional rich nut who can pay his own way (including any insurance)

After this, we gain new investors for a new orbital company. We have experience, and proof that this could work.

This is a seperate entity from the company Jim and I used to win the contest.

We use the new funding to build production models (which should be cheaper now that we've proved everything with the prize entry). We change the regulatory climate by lobbying the government. We also team up with insurance agencies that will insure any clientle that may be interested. Sure, it will be high in the begining, but as we gain more flights under our belt, the known risk factor, and the assumed rick (which is what it is right now) will drop. Insurance costs will come down, which increases our market size.

When the first planes took off, insurance exsisted, and it cost a lot. Somehow they kept on flying. This isn't a serious problem.

Try not to get your kilt in a knot Jim.

JimM · 2004-07-08 10:09:27

Now, if I recall, it seemed to be agreed that any flight units beyond the first three would be fairly cheap (in comparison to the first three production units). So, what i suggest is a 1 billion dollar prize for the first orbital SSTO that can take 10 tons LEO. Government and privately funded. This will help defer the cost of R&D, and act as the proving ground (exactly the model used by the X-prize and Scale Composites...you'll see)

Two observations:

One:
The minute you introduce X-type prizes into the cost estimate, you are sort of "cheating" in the sense that the object of the exercise is to figure out the economics of the thing as a stand-alone business. So, no prizes in this exercise, please, as they are a really serious distortion of the costs, leading you way up false trails.

Two:
What the numbers showed (the ones I imported from the other discussion and are available to read earlier in this thread if you care to look) is that even three units would not be financially viable. Even just one would have a really tough time breaking even. So the market for either more units, or for the sale of plans or patents or whatever, would basically be nil.

This point could be taken further, but I suspect (I've not worked it out in numerical detail) that if there were many more than three of these vehicles built at this stage in the development of the space business, you probably could not even give them away. Even at direct operation cost ($3million/trip) only, they would not have any customers. And in the process, they'd bankrupt the guys tring to make a go of the first three units, which would be carry the R&D, etc. costs, of course.
----------------------------

I answered these points above because they were reasonable points reasonably made.

Earlier, I did not get in the least emotional, just pi**ed off with people asking the SAME moronic questions (in identical form, too) for the second or third time, as if it was MY fault that they were too stupid to read the answers the first time.

And the last time I wore a kilt I was aged 4, forced into it against my will, to attend someone's wedding.

BWhite · 2004-07-08 10:19:26

What that needs is not the knowledge of a lawyer or legal precidents to call down by the score, but common-sense knowledge about how insurers assess risk and what they are likely to set premiums at.

Exactly. If no reputable insurer will sell a policy, few people will take the risk.

If insurance is available, strong contracts and waivers in exhange for insurance coverage should be easy enough to draft and thereby circumvent the liability issue entirely.

So its a red herring issue, both for detractors from space tourism and those who argue for special legislative protections. As much as I favor sub-orbital tourism, I am not a big fan of federal tax subsidies for that industry.

Persuade Lloyds of London and I am happy.

clark · 2004-07-08 10:20:41

And the last time I wore a kilt I was aged 4, forced into it against my will, to attend someone's wedding.

Child abuse starts early for you Scot's. :laugh: Were you the flower girl? Oh, never mind.

So, no prizes in this exercise, please, as they are a really serious distortion of the costs, leading you way up false trails.

Then the simple answer is that it won't work without government run research program that gives away the technology after proof-of-concept. Either that, or a large company with the available capital would be the only one capable of doing the long term investment that is neccessary.

. Even just one would have a really tough time breaking even. So the market for either more units, or for the sale of plans or patents or whatever, would basically be nil.

It might happen if the regulatory climate is adjusted so that people may pursue the adventure sans insurance. It is possible, and there is discussion on exactly this matter taking place within Congress over here in the States. Don't look for the bloody EU to make things easier for you guys though.

With that thought, and the reason I approach this problem in terms of volume of sales available per flight is that this has a direct relationship to making flights more economical for a wider market. One person can't really afford the 747- but 300 together, can. Which is why the number of people, if high enough, going up in one trip, coupled with regulatory relief, would make this a profitable enterprise.

Sure, a couple multi-billionares might afford the go-alone- but if you can get it into the multi-millionare range, then it open up the possibilities to companies, more individuals, and contest organizations to buy seats. You start to have a viable market.

BWhite · 2004-07-08 10:38:52

Regulatory relief?

A weasel-word (or lawyer-like term) for

(a) federally subsidized insurance; or

(b) cooperation with not fully and fairly disclosing the risks to paying passengers.

"Cigarettes don't cause cancer, cigarettes don't cause cancer, cigarettes don't cause cancer. Then, my God! How can you expect to sue? Everyone knows cigarettes cause cancer and you took the risk freely. . ."

clark · 2004-07-08 10:49:51

Regulatory relief?
A weasel-word (or lawyer-like term) for
(a) federally subsidized insurance; or
(b) cooperation with not fully and fairly disclosing the risks to paying passengers.

(a) federally subsidized insurance is acceptable if it creates new industries and provides a basis for new industry to become established. Long term, no. But sometimes you have to prime the pump. Or we can wait. Your choice.

(b) full disclosure is inherent and assumed, if not, then it becomes acceptable to sue the snot out of them. That said, you're getting on a glorified controlled explosion for a joy ride. Any company that has recreation as their bread and butter have a vested interest in getting people to trust that they have their saftey in mind. One explosion and a death kills their business, so I think they have a vested interest in being safe and upfront. Cigarette's are pretty cheap, and people are replaceable, so I don't think the analogy is apt.

Weasel word. :laugh: I take it as a compliment from you Bill.

ANTIcarrot. · 2004-07-08 12:04:31

I was aware that the Warsaw Treaty $75,000 limit was history

Of course you were. That must have been why you waited until after I brought the subject up, and Algol supplied the counter arguement, to say so.

Might I also note that the new agreement is apparently volontary, and international carriers can apparently still opt to limit their liability.

The victims only have to show that the airline was negligent in causing their injuries.

- Article

In other wards, a spaceline would ONLY have to pay out after a challanger style screw-up, just as I said at the start. What's more these rules apply to an industry which has 100 years of experience to say what is reasonable and what is not. A spaceline startup may will not be a 'common carrier' and will not have that experience. It will not be as easy to prove they must have known about a problem. And prove it the prosicuter must, beyond reasonable doubt.

(ANTIcarrot, on the basis of this example demonstration of your forensic skills you'd get slaughtered in a courtroom.)

Maybe, and I freely admit I should have read to the end of the article before posting. but at least I try and present proof and cite sources. You don't, and so I doubt if you'd get in at all.

The widow sues the carrier for failing to disclose that flying suborbital invalidates standard whole life policies.

I doubt that would win, as a person is responsable for their own life insurance. It's a contract between the millionare and the insurers, and his responsability to check anything risky before he/she does it. It's like if he went up into orbit, and then cut his own wrists. Even though he died whilst in their care they would not be held responsable for something the millionare did to invalidate their life insurance.

Depending on local law, the passenger may be required to prove they have travel-insurance, but that's about it.

Agree that providing single-trip life insurance is probably profitable, but it should be kept seperate from ticket price.

Even at direct operation cost ($3million/trip) only, they would not have any customers.

3000 tons into LEO for the cost of one shuttle trip? Under $1000/kg? Start up space-organisation for less than $50 million a year? Oh yes. Sure. No one would want one of those.

If insurance is available, strong contracts and waivers in exhange for insurance coverage should be easy enough to draft and thereby circumvent the liability issue entirely.

Strongly agree - and remember saying something similar at the start.

ANTIcarrot.

John Creighton · 2004-07-08 12:15:41

Why would the rich sue except for revenge? Not that the purpose of civil suits is not to bankrupt an individual or a company. The rich already have enough money. BTW civil suits are balance of probabilities which is different then beyond a reasonable doubt.

JimM · 2004-07-08 13:34:55

The rich already have enough money.

As I already quoted from The Great Gatsby, "The rich are different, they have more money."

And they have more money because they turn down no opportunity to gather yet more. You bet your sweet life they'll sue. And if having the most expensive lawyers means having the best lawyers and that has any bearing on the matter, they won't just win, they'll fleece you.

The race is not always to the swift nor the battle to the strong, but that's the way to bet.

clark · 2004-07-08 13:51:15

Well if Fitzgerald says so...

What color was Daisy's hair... Only one refrence is ever made. :laugh:

John Creighton · 2004-07-08 14:07:03

The rich already have enough money.
As I already quoted from The Great Gatsby, "The rich are different, they have more money."
And they have more money because they turn down no opportunity to gather yet more. You bet your sweet life they'll sue. And if having the most expensive lawyers means having the best lawyers and that has any bearing on the matter, they won't just win, they'll fleece you.
The race is not always to the swift nor the battle to the strong, but that's the way to bet.

Wouldn’t paying for an expensive lawyer decrease what you get in return? Moreover, if the expensive layer was such a good investment wouldn’t we all want the expensive layer. If the expensive layer was so good at winning he could just take his commission from the settlement right?

BTW you sound pretty down on people with money. BTW many rich people donate a lot of there money. If they go rich by hard work they don’t need to try to make my by suing a company out of business. Moreover how sympathetic is a Jury going to be to some rich guy that has a lot of money. That is unless you think the rich guy will buy of the jury but that is criminal.

JimM · 2004-07-08 14:20:19

I was aware that the Warsaw Treaty $75,000 limit was history
Of course you were. That must have been why you waited until after I brought the subject up...

That's pathetic, even by your standards. Of course I didn't waste time bringing up a dead letter just to point out it was dead. It would be like ... say ... pointing out that prohibition would be a problem, but we don't have to worry now because it's been ended.

...at least I try and present proof and cite sources.

But you do it so badly and so incompletely, you would be seriously better off not bothering. Stop pretending to be a lawyer.

3000 tons into LEO for the cost of one shuttle trip?

Well, what can I say? I know Shuttle is expensive, but $1.8 billion per trip? Who's kidding who now?

Under $1000/kg?

$660/kg, actually. But of course then you have to add profit, insurance (on the vehicle itself, not the other things), ground handling facilites, etc. So maybe you could sell at about twice $660/kg....

However, we already know there is just no market worth discussing for cargo for this mass to LEO, which leaves us back at tourists. At three tourists per trip, that comes out at $(((10,000lb/3)/2.2kg)*1,320) = $1909090.90... , which I think we could reasonably round out to be $2 million per tourist. Then there is the intersting matter of insurance for the tourist, but we're already been discussing that at some length.

At one launch per week, do you think you can find 150 billionaires a year for 10 years (the MTBF life of the vehicle is 500 trips = 10 years) IOW a total of 1,500 billionaires prepared to fork up $2 billion plus insurance for this sort of trip? Especially when under your scheme for many vehicles, it would be in the face of fierce competition on all sides? (Addnl. costs for sales & marketing would become significant.)

Looks like the highroad to bankrupcy all round, to me.

No one would want one of those.

Not if they've done their sums, they wouldn't.

JimM · 2004-07-08 14:28:17

(a) federally subsidized insurance is acceptable if it creates new industries and provides a basis for new industry to become established. Long term, no. But sometimes you have to prime the pump. Or we can wait. Your choice.

Like an X-prize, this is a sort of "cheating". If we are trying to look at the costs of a standalone business, both this and the prize are market-distorters. Let's leave them aside for now

JimM · 2004-07-08 14:36:37

Wouldn’t paying for an expensive lawyer decrease what you get in return?

They are expensive precisely because they significantly increase what you get in return. How else could they justify their fees?

BTW you sound pretty down on people with money.

Certainly not. Why should you say that? I'm just trying to be realistic--a scarse commodity among some of the denzines of this thread of late.

John Creighton · 2004-07-08 14:41:17

Wouldn’t paying for an expensive lawyer decrease what you get in return?
They are expensive precisely because they significantly increase what you get in return. How else could they justify their fees?

Give up the semantics. The more layer fees you pay the less of the settlement you end up with. If paying for an expensive layer was a better investment what is going to stop the poor person for paying for a better layer given the better layer can get them a huge settlement.

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#51 2004-07-07 15:08:22

Re: The Case against Space Tourism - It's not the 'killer app' we imagine

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