Can private-sector space business be profitable, or is it just an exciting way for billionaires to live out their fantasies?

The big kahuna of American rocket companies is the United Launch Alliance, a joint venture of Boeing and Lockheed Martin that until this year held a monopoly on the lucrative business of launching rockets for the US Air Force.

But that monopoly is no more. The company faces a new era of competition as Elon Musk’s maturing SpaceX aims to fly more space missions in one year than ULA does, and as Jeff Bezos’ Blue Origin breaks ground on a new factory for orbital rockets.

ULA, for its part, isn’t sitting still. ”I came here to transform the company, position it in this new competitive marketplace with all these different players,” says Tory Bruno, who took the CEO job at ULA in August 2014 after a three-decade career in Lockheed’s missile-defense business. In his first full year in charge, ULA returned more than $400 million in operating profits to its two owners, but the company must prepare for when its final no-bid launch contract expires in 2019.

One “game changer” that’s key to Bruno’s plan? Space trucks.

To-do

When Elon Musk founded SpaceX, he brought two key virtues that had been missing in aerospace: A Silicon Valley style of leanness amid all the cushy government contract margins, and a visionary belief that investments in reusable rockets would be justified by a wave of space businesses involving customers beyond traditional government clients.

ULA is learning from both ideas. Bruno has responded to the competitive challenge with better blocking and tackling—”we’ve taken about 36% percent of the costs out of our supply chain”—and a vision, rivaling Musk’s in its ambition, of a growing economy between the Earth and the moon.

In ULA’s conception (pdf), humans will begin living and working in orbit during the next five years, building the infrastructure for space mining and exploration that will culminate with lunar colonies before 2050.

AP/NASA/Ben Smegelsky A ULA rocket carried supplies to the International Space Station in March 2016.

If that sounds far-fetched, consider that the first private mission to the moon is expected to take place next year, and the first private spacecraft is likely to start ferrying humans into low-earth orbit by 2019.

Key to all of this is making it cheaper to actually get to space. As of 2015, SpaceX was able to cut the retail cost of its rockets to less than $100 million—as low as $62 million for certain commercial launches—while the cheapest ULA rocket costs $164 million to fly. Those numbers alone explain how SpaceX shook up the market, though ULA notes that the upstart can’t match its 100% record for reliability.

Either way, ULA is building a whole new launch system, called Vulcan, to compete.

Space trucks

ULA has its own plans for reusing its new rocket, and fittingly, they take almost the opposite tack of SpaceX.

Rockets tend to follow a predictable construction that combine two “stages,” each with its own engine or engines—a large first stage that carries the rocket into space, and a smaller one that takes whatever the rocket is carrying to its destination.

SpaceX has been trying to reuse the big first stage of the rocket, generally the most expensive section. Its engineers designed the rocket to land on the ground after flight, and the company plans to re-fly one for the first time this fall.

ULA is instead looking to the second stage of the rocket as a source of cost-savings and efficiency. Only ULA wouldn’t relaunch the used stage from Earth.

“We realized that you don’t have to bring it back in order for it to be reusable,” Bruno says. “That’s the big paradigm change in the way that you look at the problem—if you have an upper stage that stays on orbit and is reusable.”

ULA A ULA rendering of the reusable Advanced Cryogenic Evolved Stage (ACES)

That’s the concept behind ACES, for Advanced Cryogenic Evolved Stage, the reusable stage ULA is developing. It looks like a fat little fuel tank with four rocket motors on the end, but it has some special characteristics. It’s specially insulated to better store fuel in space, its simplified electrical system cuts weight, and most importantly, it can be re-started and re-fueled while in space. All together, the new technology means that the stage could wait around in orbit for weeks or months before moving around its next cargo load.

“One you get to [low-Earth orbit], you’ve used two-thirds of the energy to be anywhere in the solar system,” Bruno says. In ULA’s vision, you could fly a spacecraft “that was so heavy or so gigantic that your biggest rocket could barely get it to LEO, then one of these reusable upper stages that’s already up in space can swoop down and grab it and take it to its final destination.”

Orbital ecosystem

The idea is to create a kind of conveyor belt system that makes it economically feasible to do increasingly large-scale activities in space.

“Build up a fleet of these things in space, space trucks if you will,” Bruno says. Then, “the big, expendable rockets, those are the freight trains. It starts becoming practical to construct large-scale infrastructure and support economic activities in space—a transportation system between here and the moon, practical microgravity manufacturing, commercial habitats, prospecting in the asteroids.” In that scenario, he suggests, low-Earth orbit “becomes the app store of space.”

Many of the companies that have business plans like these—including firms like Planetary Resources, Bigelow Aerospace, Deep Space Industries, and Moon Express—have already won millions of dollars in capital from Silicon Valley investors to develop the technology to do it. They are just waiting on reliable, cheap rides to get into space.

ULA ULA’s vision of the space economy in 15 years.

ULA is hoping for a virtuous cycle: In particular, the ability to obtain water in space, perhaps from the moon, asteroids, or a comet, could lead to the ability to obtain rocket fuel—typically a mix of hydrogen and oxygen—in space. The weight of fuel is a major cost for rockets flying into space, so producing it away from Earth would mean a major expansion of what could be done in orbit.

When orbital access is cheaper, Bruno says, “we’ll do all sorts of economic activities there, things we haven’t even thought about today.”