Virgin Galactic is preparing to become the first publicly traded spaceflight company, and the venture is setting a course to be profitable by August 2021, which would put it lightyears ahead of the profitability projections of another transportation-based company that simply moves people around on Earth: Uber.
The Wall Street Journal reports that Virgin Galactic is merging with Social Capital Hedosophia Holdings (SCH), which will take a 49 per cent stake and invest about $800 million (£641 million) into the space tourism endeavour.
“We are at the dawn of a new space age, with huge potential to improve and sustain life on Earth,” Richard Branson, founder and chairman of Virgin Galactic, said in a statement. “By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts.”
That progress has come with costs, namely the October 2014 wreck of a Virgin Galactic SpaceShipTwo craft test flight that killed the two pilots inside. No one has died on Virgin crafts since then but, of course, private space travel still remains a dangerous gamble.
In December 2019, the Virgin VSS Unity was the first of the company’s captained crafts to go to the edge of space. Earlier this year, Virgin Galactic sent two pilots and a test passenger to space for the first time.
“Since we put two spaceships into space ... and made five new astronauts—the first astronauts to have been made on American soil since 2009—we’ve had 2,500 people ask to sign up,” Branson told CNBC. “The market is enormous.”
Chamath Palihapitiya, head of SCH, told CNBC that the company actually has upwards of 600 customers ready to pay $250,000 (£200,600) for a one-and-a-half hour flight. Palihapitiya said that potential customers have put down more than $80 million (£64 million) in deposits so far. The company plans to launch its first customer flights within a year.
It seems a lot of rich people want to go to space. And while Branson’s Virgin Galactic is competing with Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin in the private-sector space race, Virgin Galactic seems to be the closest to providing rich people with the opportunity to take a brief trip beyond the Earth’s atmosphere.
It may seem absurd that so many rich people would be willing to spend a quarter of a million for a 90-minute trip that gives them just a few moments on the cusp of the cosmos. But when we’ve been promised civilian space travel for decades, I guess the elite will take what they can get. And providing thousands of wealthy people with the opportunity to say they’ve been to space could be a viable path to profitability within the next couple years. (For what it’s worth, Branson told CNBC, “Ten years from now we should see quite a dramatic decrease in our prices.”)
It certainly seems to be a better path to profitability than transforming road travel through ride-sharing. Last month, in its first earnings report as a public company, Uber posted a loss of $1 billion (£802 million) over its last quarter. The company has lost about as much in some previous quarters and loses money on every Uber ride. The company’s only hope at profitability is through adding fleets of autonomous vehicles.
That’s not going to happen before 2021, which is when Virgin Galactic (perhaps optimistically) plans to be profitable. We’ll check in in two years to see if shitty expensive space travel or shitty expensive robot cars are winning out.
Featured image: Mark J. Terrill (AP)