Mar 30

Mar 30 The Tripartite for Outer Space Tourism

Passenger capsule interior of SpaceX (Courtesy of SpaceX)

“And all dared to brave unknown terrors, to do mighty deeds, to boldly split infinitives that no man had split before—and thus was the Empire forged.”

— The Hitchhiker’s Guide to the Galaxy, Douglas Adams

*First and foremost, I hope everyone is staying safe and healthy in these uncertain times. Together, the human race has overcome difficult challenges, and likewise, we will get through this because life finds a way. #HumanityStrong, stay home if you can, and lets #FlattenTheCurve together!*

Late last year, with a ticker of SPCE on the New York Stock Exchange, Virgin Galactic became the first publicly traded Outer Space tourism company. Given my own interest in Outer Space, the potential to be personally involved in an out-of-this-world enterprise was too tempting to pass up; I quickly brought some SPCE stocks. While Virgin Galactic is planning to start commercial operations late this year, it will likely slip to 2021 with the ongoing COVID-19 pandemic and the incoming economic recession.

With Outer Space dominated by professionally-trained and government-backed astronauts and companies, tourism in this arena might feel like a new development. However, space tourism has been with us since 2001 when Dennis Tito visited the Russian section of the International Space Station (ISS), becoming the world’s first Outer Space tourist. Related to this industry, although I wrote a post on whether space tourists can be considered astronauts—tl;dr: likely not, I never focused specifically on the emerging players that will drive this industry forward. Even though it seems like new enterprises are consistently being formed in this space, Virgin Galactic, SpaceX, and Blue Origin have created a dominant tripartite in the sector; each with its own unique and matured plans for Outer Space tourism. For these companies, money is not an issue because at the helm of each is a different billionaire: Jeff Bezos for Blue Origins, Elon Musk for SpaceX, and Richard Branson for Virgin Galactic.

For this post, I will provide insights on the members of this tripartite (chronologically introduced based on the expected date of their first tourism launch) and their visions for the Outer Space tourist. I will then conclude with my thoughts on the future of this expansive industry.

***Please note*** As disclosed, I am long SPCE. So, along with the usual legal disclosure in the footer, I will also mention that this is not a financial column and any content below is for informational purposes only and should not be construed as legal, tax, investment, financial, or other advice.

Virgin Galactic

A subsidiary of the Virgin Group Ltd., Virgin Galactic alongside its sister company, Virgin Orbit, are their billionaire founder’s, Richard Branson, forays into the Outer Space sector. Fully devoted to the space tourism industry, Virgin Galactic had been mired by an early tragedy: the crash of its first SpaceShipTwo, VSS Enterprise, which resulted in the death of the flight’s co-pilot, Mr. Michael Alsbury. But, the company achieved success in December 2018 when VSS Unity reached an altitude of 80 km above sea level—however, whether this counts as Outer Space is still up in the air. In February 2019, Virgin Galactic followed up this accomplishment by taking up its first passenger, the company’s Chief Astronaut Instructor Beth Moses, on VSS Unity’s fifth supersonic powered test flight.

VSS Unity can carry up to eight people per flight: six paid passengers and two pilots. For this experience, passengers, called Virgin Galactic astronauts, will arrive at Spaceport America for 3 days of training and preparation. On the day of flight, they will embark on a SpaceShipTwo variant, such as the VSS Unity, that is attached to its carrier aircraft, WhiteKnightTwo, and take off conventionally to an altitude of about 50,000 feet. At this point, SpaceShipTwo will detach from its carrier and surge toward Outer Space at speeds approaching 3.5 times the speed of sound. Once the vehicle reaches its apex, the pilots will shut off the engines, enabling passengers to experience few minutes of weightlessness.

For this approximately 2-hour flight experience, tickets were last sold at $250,000. While Virgin Galactic is currently closed to new ticket purchases, interested passengers can pay a $1,000 refundable deposit as part of Virgin Galactic’s new “One Small Step” Program. This will enable you to be at the front of the line when tickets become available again: you can sign up here.

As a new public company subject to reporting and disclosure laws, Virgin Galactic conducted its first quarterly earning call this February. According to its CEO, George Whitesides, it currently has over 600 reservations and $80 million in deposits that could potentially represent $120 million in revenue. It also has over 7,900 individuals on its interest list. For 2020, Virgin Galactic will be focused on fully proving its technology and fly Richard Branson safely to “Outer Space” on a commercial flight. The company is hoping that by 2021, it will be able to ramp up its revenue and start regular commercial flights.

Blue Origin

Blue Origin is a brainchild of the billionaire Jeff Bezos, founder of Amazon. Serving as his Outer Space dream, Bezos funds Blue Origin through sales of his Amazon stock, generating about $1 billion of funding each year. Following its motto: Gradatim Ferociter—Latin for “step by step, ferociously,” Blue Origin has been steadily developing its family of rockets, including the New Shepard, its Outer Space tourism focused launch platform.

Named after NASA astronaut Alan Shepard, the New Shepard launch vehicle is made up of two components: (1) a pressurized capsule and (2) a booster rocket that is powered by Blue Origin’s proprietary BE-3 bipropellant rocket engine. Designed to be fully reusable, the New Shepard can take up to six passengers per flight with its crew capsule having 530 cubic feet of interior space. Paid passengers begin their Outer Space experience at the Blue Origin-owned Corn Ranch spaceport in Van Horn, Texas. Here, all tourists will participate in a day-long training session on safety as well as instructions on in-flight activities, communications, and how to maneuver in a zero-gravity environment. On launch day, passengers will be strapped onto their seats as they experience up to 3 Gs on a vertical launch that will take them beyond the Karman Line—100 kilometers above sea level; leaving no one to doubt whether they are truly in “Outer Space.” While the booster rocket return safely via a vertical landing, these individuals will experience few minutes of weightlessness in the pressurized capsule before landing back on earth through a combinational system of parachutes and retro-thrusters.

Flight tests on the New Shepard began on April 29, 2015, and 12 launches have been conducted so far. Except for the first launch, the booster rocket has landed successfully each time. For these launches, three vehicles have been used: 1 test flight on New Shepard 1 (booster crashed on landing), 5 test flights on New Shepard 2, and 6 test flights (so far) on New Shepard 3. While all of the launches so far have been unmanned, Blue Origin is planning to fly a crewed flight—on New Shepard 4—by the end of this year (charging ahead ferociously even amidst the COVID-19 outbreak).

While Blue Origin still has not disclosed the ticket price, it will likely be in “hundreds of thousands of dollars” initially. If you are interested, you can sign up here.

SpaceX

As the first company to successfully land a rocket’s first stage on both land and sea, SpaceX has achieved astronomical success in the past decade. Envisioned by billionaire Elon Musk, SpaceX is headquartered in Hawthorne, California and has performed numerous successful missions for both governmental and commercial customers. Its signature rocket family, the Falcon, includes both the reliable Falcon 9 and the groundbreaking Falcon Heavy. While still aiming for even greater successes in the Outer Space launch industry, SpaceX has recently turned its attention to the tourism sector with two new partnerships.

In February of this year, SpaceX announced a partnership with Space Adventures that will send four passengers on SpaceX’s crew Dragon capsule on a free-fly mission in Outer Space. Space Adventures is no newbie to the Outer Space tourism game as it assisted Dennis Tito to become the world’s first Outer Space tourist in 2001. Under the arrangement with SpaceX, a Falcon 9 rocket will launch four Outer Space tourists to a height of 2 or 3 times the altitude that the ISS orbits around Earth. Given that the ISS orbit is approximately 400 km above sea level, this means that these passengers could achieve an altitude of up to 1,200 km. Since this could be within the inner Van Allen Belt, I am hoping that these space tourists aren’t staying at the height for too long given the radiation exposure. Although the crew dragon capsule will not dock with the ISS, this free-fly mission could last up to five days and can launch as early as late 2021. if interested, you can sign up for more information here.

Speaking of the ISS, NASA also recently issued an interim directive that will pave the way for the commercialization of the space station. Under the directive, NASA will allow private companies to purchase time and space on the ISS to market and commercialize services and products. Seizing on this opportunity, earlier this month, SpaceX also introduced a partnership with Axiom Space for three Outer Space tourists to visit the ISS on a 10-day trip as early as second quarter 2021. If successful, this could be the first ever fully private mission to the ISS (Dennis Tito accompanied two Russian crew members on an official Russian mission: ISS EP-1). The three passengers with an Axiom Space-trained astronaut, serving as the flight commander, will launch onboard a crew Dragon capsule on top of a Falcon 9. With a round trip traveling time of 2 days, these individuals will spend an additional 8 days living on the ISS. At a ticket price of $55 million, one seat has already been booked. While this is way too rich for my blood, if interested and got the cash, you better hurry up and contact Axiom Space.

The Billionaires’ Chase for a Trillion Dollar Market

With definitive plans and proven hardware, Virgin Galactic, Blue Origin, and SpaceX are the clear leaders in this emerging sector. But, because Outer Space tourism is expected to be a $3 billion market by 2030 as a part of an eventual multi-trillion dollar space economy, there is plenty of room for others to join them among the stars. But, as many budding commercial Outer Space enterprises have learned the hard way (e.g., XCOR Aerospace, Golden Spike Company, Excalibur Almaz to name a few): Outer Space is hard, really hard, literally rocket science hard. Hence, it is likely that we have seen the establishment of a tripartite for this industry. Each of these billionaire-founded companies is primed to dominate a significant slice of this market with all of them having at least one dedicated launch site for their services—with their own unique crew capsule and proprietary launch technologies to boot. These factors suggest that the blueprint for success in the Outer Space tourism sector will be largely previewed by the tripartite’s groundbreaking experience in the next couple of years.

In addition, each member has their own distinct characteristics that will enable passengers to pick the experience that is best suited for them. Going for the cheapest option that most mirror your current aerospace exposure? Virgin Galactic will offer this with a six-digit price point; its Outer Space experience will start with a horizontal takeoff and end with an airplane-like landing. However, by staying below the Karman Line, some may doubt that you have really reached Outer Space. Feeling a little bit more adventurous and want to make sure you are undoubtedly considered an Outer Space tourist? Go with Blue Origin who uses a vertical rocket launch platform. By getting you 100 km above sea level, you will be exposed to a few minutes of weightlessness in indisputable Outer Space. You will also return to Earth using methods very similar to what current-day professional astronauts experience: parachutes assisted capsule landing. Want a fully immerse multi-day Outer Space adventure and money is not a concern? SpaceX is your bet and you can pick to either break records by orbiting at heights unseen since the Gemini program or spend some time and see what’s it like to be an ISS astronaut. Through these SpaceX experiences, you will not only experience long-period of weightlessness but be one of those few who have circumnavigated the globe from above.

For the foreseeable future, Outer Space tourism will likely be a reserved realm of the ultra-rich. But, if the tripartite is successful in their early years, this sector should become a vacation market that would eventually be financially available to a middle-class family; only this time around, getting to the destination is an essential experience in it of itself. As more companies are incentivized to enter, I hope more distinctive Outer Space opportunities and experiences will become available for people across the globe to enjoy. While it took less than a century from the invention of heavier-than-air aeroplanes to their mainstream adaption, I believe that the Outer Space version will take significantly longer to achieve universal affordability. There are many more challenges, risks, and hardships that will need to be overcome in the extraterrestrial environment of Outer Space: it is a lot easier to defy gravity for a while than to escape it completely. But while an Outer Space experience is likely not in the cards for me given the current timeline, it’s exciting to be living in an era on the precipice of another giant leap; only this time, toward a new commercialization age of Outer Space.