Apparently Planet Earth isn’t big enough for Richard Branson. Overnight he has stepped up his campaign to launch what would be one of the first commercial space flight ventures by unveiling the rocket plane that will take fare-paying passengers into space in less than two year’s time.
Branson was in the desert in New Mexico overnight for the launch of the spaceliner, creatively named SpaceShip 2, which will undergo another period of intense testing over the next 18 months in the lead up to taking paying customers on short space flights.
And when we say short, we mean short. The passengers will experience zero-gravity weightlessness for around six minutes on the two-hour flights that are expected to cost a tick under $220,000. Six tourists will go up at any one time.
Branson reportedly has 300 customers on the waiting list. He and his family will make the first flight, accompanied by the rocket ship’s designer.
“We want this program to be a whole new beginning in a commercial era of space travel,” Sir Richard told reporters before the official unveiling.
“The unveil of SS2 takes the Virgin Galactic vision to the next level and continues to provide tangible evidence that this ambitious project is not only moving rapidly, but also making tremendous progress towards our goal of safe commercial operation.”
It’s all very impressive and, we must say, pretty cool. But the question remains – is this a big Branson publicity stunt or a real business?
Branson is certainly hoping it’s the latter, and he’s got a fair bit of cash behind him to support his conviction.
In July, Abu Dhabi’s Aabar Investments announced it was taking a stake in Virgin Galactic with a $US280 million investment that it claimed valued Virgin Galactic at $US900 million (Branson is the only other shareholder).
Virgin, which has spent about $US100 million on the project so far, said at the time that the capital from Aabar would get the company through to commercialisation.
Of course, that means the joint venture partners are looking at a pretty long payback. We’ve got no idea of the margin in the space travel business (who has?) but with tickets selling at $US200,000 a pop, Virgin needs to find 1,900 well-healed customers before ticket sales will even match the $US380 million investment, let alone cover costs or make a profit.
Is that possible? Probably, but it’s just very hard to know what the appetite for this sort of product will be.
Branson loves being a pioneer and being first into commercial space tourism will obviously carry a fair bit of cache.
But it’s tough to know just how big a money-spinner this galactic venture might be.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
