I was just interviewed on ABC TV about the news that Richard Branson’s Virgin Galactic is going public through a merger with Social Capital Hedosophia, to be the first publicly listed space tourism company. A video of the interview is below.
In the billionaire space race, featuring most prominently Elon Musk’s SpaceX, Jeff Bezos’s Blue Origin, and Richard Branson with Virgin Galactic, these visionaries are seeking to tap the potential of the space business.
The additional capital raised by Virgin Galactic appears to be sufficient to take it to finally taking paid customers into space next year, beginning with the over 600 people who put down deposits of $250,000 over five years ago. Their financial forecasts are optimistic, looking to be profitable by 2021 and with an EBITDA of $270 million by 2023.
The three major space companies each have different ambitions and business models.
Musk is intent on colonizing Mars. Bezos wants humanity to populate the entire solar system. Branson does not seem to be quite as grandiose in his aims but is clearly looking beyond the space tourism business.
For Virgin Galactic in particular, hypersonic point-to-point travel is a compelling next step. SpaceX is touting a 40 minute New York to Shanghai flight time. Its largest planned rocket could carry 100 people, making the business model feasible.
A recent report on the space industry by UBS suggests through a back-of-the-envelope calculation that hypersonic travel could be a $20 billion business in a decade, while space tourism would be just $3 billion.
Blue Origin, while planning to run a space tourism business, appears to be more focused on taking commercial payloads into space as an avenue to make itself financially viable on the way to its bigger plans. One of the next steps is taking astronauts to the moon, which the company hopes to achieve by 2024, having tested its moon lander recently.
Bezos has been far more enthusiastic about the potential of the moon than Musk, who seems to be fixated on Mars. The moon could be a source of raw materials and low gravity base from which to build and launch self-contained space habitats.
There are of course massive risks and uncertainties. However a viable space tourism industry, which we may be on the threshold of today, is simply a staging post to all of the potential of space and space travel.