Everything to know about Richard Branson’s historic Virgin Galactic space flight
Sir Richard Branson is set to be the first billionaire in space, and it’s only taken him 16 years and countless billions to do it.
The 70-year-old entrepreneur — who’s going by the call sign Astronaut 001 for the flight — plans to take off from Virgin Galactic’s spaceport near Truth or Consequences, NM on July 11. Barring any complications or bad weather, that’s nine days before his billionaire astro-rival, Jeff Bezos, slips the surly bonds of Earth.
The risks are huge. The future, and even the viability, of commercial spaceflight could be defined by how well Branson’s and Bezos’ flights go. In 2014, a Virgin Galactic spacecraft crashed in California, killing one of the pilots. Virgin Galactic has since modified the vehicles to reduce the chance of human error after a regulatory report concluded that one of the pilots had made a mistake while returning to Earth.
Here what you need to know about Virgin Galactic, the company leading the 21st Century space race:
Virgin Galactic plans mega profits — eventually
Branson’s space company is backed by huge institutions, like an Abu Dhabi sovereign wealth fund. But during its 19-month run as a publicly-traded company, Virgin Galactic has never been close to profitable. In fact, the company has lost $889.9 million since the start of 2017, and in some quarters booked no revenue.
For billionaires focused on the heavens, red ink is hardly a daunting detail. In the company’s 2019 annual report, it notes that the U.S. Chamber of Commerce predicted that commercial space flight would be a $1.5 trillion industry by 2040. There are about 600 flights booked — including celebrity passengers like Leonardo DiCaprio and Justin Bieber — for $250,000 a ticket, and the company has noted in its filings that it’s likely to jack up the price as demand swells. Branson & Co. are reportedly planning on 400 commercial flights a year, with each so-called spaceport hub booking $1 billion in revenue, although no specific timeline has been made public.
The near future of commercial space travel is for millionaires
The number of millionaires the world over has spiked in the last decade, with the total surpassing more than 20 million last year, according to CapGemini. Virgin Galactic is targeting that cohort, especially those with more than $10 million in assets, and has $120 million in expected future revenues from those customers.
What’s less clear is how a company like Virgin Galactic will keep customers returning. Their space missions last about two hours, and are expected to reach the lowest bound of what’s considered space. It “includes views of Earth from space and several minutes of weightlessness” before returning to the New Mexico spaceport. The company’s trip is essentially the world’s most intense roller-coaster ride and, unlike a commercial flight that gets a passenger from point A to B, it’s unclear if Virgin is exploring a reason to reach sub-orbital heights beyond just the novelty. VG’s CEO, Michael Colglazer, was formerly head of Disney Parks International, so he knows a thing or two about attracting people to rides.
Virgin Galactic has lots and lots of money
Virgin Galactic has two big advantages in building its space fleet: proprietary technology, and an immense cash pile. As of March 31, the company had $616 million in cash at its disposal, more than five times its current liabilities. Costs — particularly research and development, which reached $159 million last year — are expected to fall as commercial flights become more regular, according to the most recent annual report.
At Virgin Galactic’s disposal are, of course, the ships and spaceports that have made it competitive with rivals like Blue Origin, Bezos’ company. But unlike Blue Origin, Virgin Galactic doesn’t use a rocket launch from Earth. Instead, Branson’s method relies on two craft to break into the suborbital space. First, a twin-fuselage “mothership” plane, called the VMS Eve, takes off horizontally before reaching 45,000 feet to release the second vehicle. That vehicle, which carries two pilots and as many as six passengers, then engages its rockets to reach speeds up to Mach 3, or 2,302 miles per hour, to push into space.
The potential for commercial spaceflight has attracted interest not just from the wealthy who want to boldly go where few have gone before. NASA, as well as the governments of Italy and New Mexico, have had contracts with Virgin Galactic, and some have been integral to the business. While these contracts aren’t the company’s main focus, it could end up being a larger share of its business as their spaceflight technology is proved under real world conditions.
Virgin’s suborbital spacecraft carry payloads for NASA research, like machines for imaging and biomedical research, as well as other government flight systems. New Mexico leases its land, and has invested $200 million into the spaceport where Sunday’s flight will launch. And Italy has trained members of its air force on Virgin Galactic’s trips. These contracts are hefty, and can make a dent when the government pulls back. In 2020, revenue dropped $3.5 million, or 94%, with most of that decline due to the drop in government funding.
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