Bezos, Branson rev their rockets for summer race to space
(Tribune News Service) — Star Wars is moving from the big screen to the desert Southwest as the billionaire owners of Blue Origin and Virgin Galactic ready their rockets for commercial launch into suborbit this summer.
Amazon CEO Jeff Bezos will board Blue Origin's New Shepard rocket July 20 for a flight to the edge of space from West Texas, accompanied by his brother, Mark, and two other as-yet unnamed passengers, including one who paid nearly $30 million for a seat to the stars.
Sir Richard Branson also plans to fly this summer from Spaceport America in southern New Mexico, possibly as soon as the July 4 weekend, according to media reports that the British billionaire hopes to beat Bezos in the race to space.
Virgin Galactic firmly denies those rumors. But either way, Branson is scheduled to shoot into suborbit sometime this summer, marking the launch of commercial passenger service for tourists who can pay at least $250,000 for a joy ride to the stars.
The battle of the billionaires may only be media hype. But it reflects a new stage in the effort to launch paying passengers on private rockets to space, marking the transition from yearslong research-and-development operations to commercial launch by both Virgin Galactic and Blue Origin.
And that, in turn, is generating renewed excitement among investors about the prospects for commercial space services finally coming to fruition, said Rich Smith, a writer for the investor advisory service The Motley Fool who follows Virgin Galactic on the New York Stock Exchange.
"The Bezos-Branson debate is really just a public relations war," Smith told the Journal. "It doesn't really matter who gets up first. This is really about investors looking for something to hang a stock price on."
Indeed, Virgin Galactic's stock has soared since the company successfully launched its VSS Unity rocket into suborbit on May 22 for the first time from New Mexico. Its stock price reached $39.12 per share Tuesday afternoon, up from a low of $14.27 in early May.
That reflects a huge rebound in investor confidence, which fell significantly in February after Virgin Galactic reported technical issues that forced the company to ground its rocket for three months to correct the problems. Company stock had climbed to a peak of $62.80 a share in early February, and then steadily declined over the following three months.
"The company's stock still has more ground to recover, but it's bounced back significantly," Smith said. "If it does fly over the July 4th weekend, the stock price could grow a lot more. But the bottom line is, Virgin Galactic has fixed the problems it faced and is back on track."
Virgin Galactic's publicly announced test-flight schedule now calls for one more launch to space with a four-member technical team on board, followed by Branson's long-awaited flight sometime over the summer. The company will also fly four passengers from the Italian Air Force to space in early fall to conduct experiments in microgravity and provide astronaut training.
After that, Virgin Galactic plans a four-month hiatus for upgrades and maintenance on the Unity, and on the mothership VMS Eve, which carries the Unity on its underbelly to about 50,000 feet, where the rocket breaks away from Eve and fires up its motors to shoot into space at 50 miles up.
If all goes well, full commercial service would start in early 2022, allowing up to six paying passengers per flight to float for a few minutes in microgravity and view the Earth's curvature before gliding back down to Spaceport America.
In early June, however, the online news service Parabolic Arc reported that Virgin Galactic may attempt to beat Blue Origin to space by accelerating its plans to fly Branson over the July 4th weekend. That generated significant media speculation about competition between the companies.
Virgin Galactic refutes the report, which Parabolic Arc based on an anonymous source.
"We are in the process of analyzing the data from our successful May 22nd flight," one spokesperson said in an email to the Journal. "As previously announced, we expect to complete the final test flights this summer through to early fall. At this time, we have not determined the date of our next flight."
Notwithstanding media speculation, the race to space is much less important than pending questions about the long-term sustainability of Virgin Galactic's and Blue Origin's business propositions, said Henry Hertzfeld, a research professor with George Washington University's Space Policy Institute.
"Of course showmanship is involved on who gets there first," Hertzfeld told the Journal. "... But the market has yet to be proven."
In that regard, Blue Origin's upcoming flight bodes well for both companies. Some 7,600 people from 153 countries bid in an online auction this month to fly with Bezos in July, culminating in one anonymous bidder paying $28 million, plus a 6% buyer's commission, for the winning ticket.
That demonstrates substantial interest among potential customers with money to burn.
"The winning bidder is paying a premium to be the first to go up," said Smith of The Motley Fool. "But the auction shows significant interest from people who can afford it."
To date, 600 people have paid $250,000 each to reserve seats on Virgin Galactic's rocket. And the price may rise when the company reopens sales later this summer.
At those prices, Virgin Galactic is targeting a finite number of wealthy space tourists, Hertzfeld said.
"There clearly are some people who will pay for flights," Hertzfeld said. "But there's no mass market for ordinary people to buy seats for a cheap price. I don't know what they'll need to break even, but I assume it's a large number of full flights."
Virgin Galactic is striving to achieve some 400 flights per year to generate $1 billion in annual revenue at Spaceport America once it reaches full commercial operations. It's also betting on business services, such as flying institutional customers like the Italian Air Force to space.
But as commercial space gains momentum, both Virgin Galactic and Blue Origin will face more competition, particularly from Elon Musk's company SpaceX, which is already flying cargo and astronauts to the International Space Station. And it has plans to fly paying passengers on a three-day orbital ride in September.
Both Virgin Galactic and Blue Origin are finally approaching the starting gate for space tourism, but it remains to be seen how they'll fare in the long term, Smith said.
"For now, everyone's focused on the start of commercial operations," Smith said. "I recommend that investors take the long view, looking out over three-to-five years. Virgin Galactic has no revenue or earnings yet, and people are just trading on future prospects."
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