The Economist July 17th 2021 Business 57SpacetourismThe finite frontier
“I
t willbehumbling.Itwillbespiritu
al.” This is how Virgin Galactic wooed
customers with the prospect of a moment
in space in 2004. Within five years, it
claimed, it would take a total of more than
3,000 passengers on lifechanging jaunts
in its spaceships. On July 11ththe space
tourism firm began to make good on that
promise. Its vssUnity rocket plane was re
leased from a support aircraft, accelerated
to three times the speed of sound and
soared 85km above Earth’s surface. Thence,
for four minutes, its six temporarily
weightless passengers, including the
firm’s British cofounder, Sir Richard Bran
son, beheld the planet’s curvature against
the blackness of outer space, before return
ing to a spaceport in New Mexico.
It is not known if Sir Richard, not fam
ous for humility, felt any up there. He
called the experience “magical”. Inwardly
he may have gloated a bit, having pipped
Jeff Bezos, a much wealthier billionaire, to
the heavens. On July 20th Amazon’s re
cently retired boss plans to go slightly
higher, for slightly less time, in the New
Shepard, a verticallaunch vehicle built by
his own spacefaring company, Blue Origin.
The tycoons are among a growing group
of enthusiasts who think space tourism’s
time has come. A few paying customers
have flown in governmentissue Russian
spacecraft. Virgin Galactic and Blue Origin,
by contrast, built their own vessels for the
purpose of lobbing passengers beyond the
upper reaches of Earth’s atmosphere.Suborbitaltourismispartofa broader
private space business that has boomed of
late, thanks to advances in rocketry and
satellite technology. In 2020 investors
poured $28bn into such ventures, hoping
to emulate SpaceX, which has slashed the
cost of orbital launches thanks to its re
usable rockets and is valued at $74bn. Bank
analysts at Morgan Stanley expect the en
tire space economy to generate $1trn in
revenue by 2040, from $350bn today.
Those at ubsforecast $800bn by 2030. Like a Virgin, for the very first time
Space tourism, ubsthinks, will make “a big
contribution” to that total if it helps re
place mass longhaul aviation with hyper
sonic travel. That is unlikely. For now Blue
Origin and Virgin Galactic will offer brief
suborbital flights. Sir Richard floated
slightly below the Kármán line, usually de
fined as 100km above Earth’s surface,
where air becomes too thin for unpowered
flight. Mr Bezos plans to float a bit above it.
Suborbital excursions are not Blue Ori
gin’s main goal. The company is develop
ing a large rocket, the New Glenn, for
launching satellites, is selling advanced
rocket engines to others and is bidding for
nasacontracts. In the long run, Mr Bezos’s
aim is to foster a largescale spacebased
economy rather than amuse thrillseekers.
But Blue Origin’s bigger rockets could,
someday, take customers keen to go into
orbit for fun. SpaceX, though not driven by
the tourist market, is beginning to makesome money from it as a sideline.
As for suborbital jaunts, nearly 7,600
people bid to join Mr Bezos on his. The
winner parted with $28m. Virgin Galactic
says its waiting list has several hundred
hopefuls (including, according to Sir Rich
ard, Elon Musk, SpaceX’s boss). Cowen, an
investment bank, found two in five people
with a net worth of over $5m would con
sider paying $250,000, Virgin’s current
price, for a ticket. If, as consultants at Cap
gemini reckon, 2m Earthlings have that
much dosh, that is a decent market. It
could be a lucrative one, once regular
flights begin to offset rocketdevelopment
costs. Chamath Palihapitiya, a venture cap
italist and Virgin Galactic’s chairman, ex
pects operatingprofit margins close to
70% at scale, similar to a software firm’s.
Still, don’t expect space tourism to be a
big part of the space business, or of the tou
rist industry, in the next decade or two.
Morgan Stanley recently cut Virgin Galac
tic’s projected annual revenues by 2030
from $1.8bn to $1.3bn. Without tourist
friendly destinations to visit (the capacity
of the issis limited), orbital tourism, with
its far higher ticket prices, will not be a
huger earner. A few spacetourism start
ups, such as Rocketplane, Armadillo Aero
space and xcorAerospace, have thrown in
the towel. This year the popular space
themed exchangetraded fund run by ark
Invest, a techinvestment firm, dumped
most of its shares in Virgin Galactic, which
went public in 2019. Both Sir Richard and
Mr Palihapitiya have sold much of their
stakes in the firm in the past few months.
Its share price soared after the successful
flight, then tumbled when it said it would
issue new stock to fund expansion.
The biggest uncertainty relates to safe
ty. A disaster can set progress back by
years. nasasuspended its programme to
send untrained civiliansinto orbit in 1986
after a schoolteacher died along with the
rest of the crew in the Challengertragedy. It
took 15 years for another civilian to brave
the journey (on a Russian craft).
The risk is lower for suborbital mis
sions, which place fewer demands on life
support systems and come fitted with
abort technology. America’s Congress in
stituted a “learning period” for commer
cial spaceflight in 2004, leaving medical
and safety standards up to private firms, so
long as they warn clients about the risks
(which are considerable while barrelling at
Mach 3 or more strapped to a pile of high
explosives). vss Unity’s sister craft per
ished in an accident in 2014.
Even with no accidents, regulatory pro
blems may arise when the learning period
expires in 2023. Add more humdrum an
noyances such as launch delays, which are
common, and spacetourism may remain a
hobby for a few superrich daredevils with
lots of time to spare.nN EW YORK
The private business of vaulting passengers into space officially gets off the
ground. Now what?