The British businessman beat billionaire Jeff Bezos to the edge of space. Bezos will embark on his own space flight later this month aboard his Blue Origin LLC rocket. The two men are part of a new generation’s space race, and both are trying to expand access beyond the reach of government and fact-finding missions to at least a handful of high-net-worth individuals who can afford it.
Shares of Virgin Galactic, which have attracted a large retail following, fell 17% on Monday after the company said it could sell up to $ 500 million in shares.
At the heart of Galactic’s business model will be whether the demand for space travel is sustainable. Analysts have been trying to find out, looking at various comparisons, from the use of private jets to the number of people who have climbed Mount Everest.
“It’s like a Venn diagram” of thrill seekers and people of great wealth, said Ron Epstein, an aerospace industry analyst at Bank of America.
Billionaire businessman Richard Branson and five crew members successfully traveled to the edge of space, experiencing weightlessness aboard a Virgin Galactic spacecraft. The flight is part of a push to power a new space tourism industry. Photo: Virgin Galactic
The 90-minute flight was a critical marketing moment after years of slow progress and setbacks. A devastating 2014 failed launch resulted in the death of a Virgin crew member.
“I believe and hope that we will show the world today that it will be possible to see this planet from space, and what it could look like,” Chief Executive Michael Colglazier said after Sunday’s launch. “The scale that [we] we were able to share that with the world through this live broadcast it was really important. “
Branson’s role was to evaluate a private customer’s experience, from training to how the company helps passengers build trust before takeoff, to the actual launch into space, Colglazier said. For new astronauts, that process is being simplified to between five and seven days, he said.
Branson said it has embedded itself in the customer experience of many of its business enterprises, including airlines, cruise lines and trains. “I’ve written 30 or 40 little things that will make the next experience for the next person who goes into space with us that much better,” he told a news conference Sunday after the flight.
The flight of Richard Branson and the crew of the Virgin Galactic passenger rocket plane was broadcast live.
Photo:
galactic virgin / Reuters
Two more flights are scheduled to take off in the coming months, one more manned by Virgin’s crew and a second carrying members of the Italian Air Force. Starting next year, the company’s commercial space flight will begin in earnest from 2022 as it aims to increase to about 400 flights a year.
To reach that number of flights, Colglazier estimates that the company will likely need “a high number of single-digit spacecraft to a low two-digit number.” From there, Virgin Galactic is preparing to build additional spaceport facilities, potentially in other countries.
Roughly two million people can afford to go into space, according to stock analysts at Vertical Research Partners, with that high net worth population growing about 6% each year. He estimates that Virgin needs to transport around 1,700, or about 0.08% of those people, into space each year for its model to work.
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What aspiring astronauts are willing to pay is still unclear. Blue Origin received more than 20 offers for more than $ 4.8 million to land the first seat on its first passenger mission next week, which analysts say indicates a high level of untapped demand. Space tourism could generate about $ 4 billion in annual revenue by 2030, according to an estimate by UBS last year. Virgin says its goal is to generate $ 1 billion for every spaceport it builds.
As of March, Virgin Galactic had about 600 reservations, with an average price of $ 250,000, with $ 80 million in deposits from aspiring astronauts. UBS estimates that ticket prices will likely increase between $ 300,000 and $ 400,000 per ticket, with prices potentially becoming more accessible as operations scale and costs decrease.
Ticket sales were halted after the 2014 catastrophe. Colglazier said the plan is to launch a next tranche of tickets in late summer or early fall.
Write to Benjamin Katz in [email protected] and Micah Maidenberg in [email protected]
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