By Shane McGinley
Virgin Galactic CEO outlines the business model behind the new space race
During the glamorous days of early transatlantic flights flying was largely the domain of movie stars like Elizabeth Taylor and bands like The Beatles, while most people only ever travelled to the airport to catch a glimpse of the latest teen sensation waving to screaming fans on the runway.
With the advent of low-cost carriers, and airlines such as Ryanair offering flights for just a few dollars, air travel was brought back to the masses and flying lost its luxurious allure and become as regular as jumping on a bus.
British entrepreneur Sir Richard Branson, who made his name when his Virgin Atlantic brand challenged the dominance of flag carrier British Airways, is now pioneering the latest step in aviation history and the Middle East is set to play a focal role in this advancement.
“We are entering a new stage in space age,” says George Whitesides, CEO of Virgin Galactic and former chief of staff at the National Aeronautics and Space Administration (NASA).
He isn’t wrong. Under Virgin Galactic’s new plans that are being chosen by Branson, it aims to build its second spaceport in Abu Dhabi and claims that, within the next decade, its spacecraft will be able to fly between Abu Dhabi and North America is just over an hour, a move he believes will be a game changing step.
“It still won’t be cheap,” he admits. “It will be used [initially for] high value package delivery, like if someone needs the transplant of a kidney or something like that. Like everything else, it will grow from there and eventually we will have people on it and it will be the earlier adopter, the wealthier people, who will be first.
“The real cost of transatlantic flight, if you do the current year analysis is around $80,000 when they were first starting out and it is almost the same order of magnitude as our current product.”
Founded in 2004, Virgin Galactic’s aim is to bring space travel to the masses and provide sub-orbital spaceflights to the paying public.
Priced at $200,000 a ticket, the company has signed up celebrities such as Tom Hanks, Katy Perry, Brad Pitt, and Angelina Jolie to take seats in the first commercial spacecraft when flights start next year. The actor Ashton Kutcher was recently the 500th person to sign up, but Whitesides is aiming to move beyond simple space tourism.
“Our whole business plan is pretty forward thinking but we have a demonstrated market with the space tourists, we have a demonstrated market in the research market and we will have some announcements on other areas we are getting into, so what we want to do is logically use the resources we have to attack markets that make sense.
“A few weeks ago we announced our 500th customer deposit, at $200,000 a ticket it signifies a milestone of over $100m in future revenue. That business is just one piece of the overall commercial space travel market, [which is] worth billions of dollars overall. “We think the target market that we will be looking at soon will be the order of magnitude of about $500m a year,” he estimates.
In order to get to this point, Whitesides reveals that Virgin Galactic is nearing completion of its first spaceport in New Mexico in the US and it is already planning its second base in the UAE.
Abu Dhabi was seen as the natural choice for the company’s base outside the US as Abu Dhabi state-backed investment firm Aabar Investments acquired a 32 percent stake in Virgin Galactic in 2009 and Whitesides says this is a further step in the partnership between the two companies.
“Under the 2009 deal the two companies agreed that Abu Dhabi would gain exclusive regional rights, subject to receipt of regulatory clearances, to host Virgin Galactic tourism and scientific research space flights,” he says.
To show the company is serious about its Abu Dhabi venture, Whitesides reveals it has appointed Steve Landeene, a senior executive responsible for setting up Spaceport America in New Mexico, to oversee the various steps needed to make Spaceport Abu Dhabi a reality.
“In his new role, Landeene will be responsible for developing the roadmap for the construction of a spaceport in Abu Dhabi, starting from financial, strategic and organisational business planning and, if the requisite regulatory approvals are approved, moving through to spaceport construction management,” says Whitesides.
A location for Spaceport Abu Dhabi had not yet been selected and potential sites would be evaluated once the regulatory requirements had been finalised, he says.
From 2007 to 2010, Landeene worked as executive director of the Spaceport America project. The world’s first commercial spaceport, the $209m facility in southwestern US, is now in the final stages of construction of the first of three phases, which will be completed later this year.
“The appointment comes at an exciting time. Virgin Galactic has a beautiful home at Spaceport America in New Mexico. We look forward to the day when Virgin Galactic spaceships will be flying above this vibrant and forward looking city.
“Perhaps one day to see a future generation of our spaceships to fly from here to Abu Dhabi to New Mexico in no more than an hour… The first city pair in which the globe is once again brought closer together for the benefit of us all.”
“It is not Star Wars,” he says of the plans, but, he admits it is not currently within the range of the spacecraft Virgin Galactic currently operates.
“We couldn’t do it with our current vehicles. We would have to have a new vehicle… They are not really optimised for point to point, they are optimised for travel straight up to space and down… But the basic physics of it is that if you go into near orbital space, the International Space Station gets around the planet in 90 minutes so you do the math. If you are not going at exactly that speed you can get there in an hour. To me, as a space guy, the technologies we will be working on in this programme will have applications and I think honestly, it is a huge market down the road. Maybe not tomorrow and probably not a year from now, but it is a huge market eventually.”
“No sooner than five to ten years,” he estimates when pushed for a timeline.
With Spaceport America taking shape this year, this gives the project and his ambitions some much needed credence. “There will be three phases [in Spaceport America]. The phase about to finish is the spaceport entity that manages the spaceport finishes their work and they turn it over to us. Then we do our own fit-out to put in the special Virgin touches and that could take as much as a year.
“Then we do some more work and bring our operations down, which could take a few months, so what we are looking towards the end of 2013.”
While Spaceport America is taking shape, Spaceport Sweden is on the cards and Spaceport Abu Dhabi has been announced, some aviation analyst are still not convinced that this will majorly impact the aerospace industry and the dream of a one hour journey between the Middle East and the US is still no more than a pipe dream.
“To claim that these sorts of distances can be covered in an hour, in between five and ten years is more PR guff than reality,” says Saj Ahmad, chief analyst at StrategicAero Research.
“The fact is, airplane speeds have not gotten faster since the dawn of flight and that in ten years time, the majority of people will still be flying in airplanes shaped no different than what we see today.
“Aside from the prohibitive cost of these so called fast-flights, the infrastructure to support such air transport vehicles does not exist, nor are airplane makers looking to “go faster” while fuel costs cripple airlines.
“Until air transport machines are prioritised for speed ahead of economy, then every carrier that can afford them will buy them. Right now, this is more pie-in-the-sky thinking that won’t even make a ripple in the industry.
“Ten out of ten for forward thinking but it’s not going to happen for several decades or beyond until such time propulsive and fuel efficiency to make this sort of adventure real can be attained.”
Should airlines be worried? “Not at all,” is Ahmad’s assessment of Virgin Galactic’s ambitions.
As we say our goodbyes, Whitesides reveals he will soon be off to Abu Dhabi airport as his wife is pregnant and close to going into labour back in the US. A one hour flight time would certainly be handy around about now he’s surely thinking?
Virgin Galactic: What you get for $200,000
The craft is projected to be a six passenger, two pilot craft. Its planned trajectory will overlap the Earth’s atmosphere at 70,000 feet (21,000 metres), which will make it a sub-orbital journey with a short period of weightlessness. The spacecraft, SpaceShipTwo, will be carried to about 16km or 52,000 feet by a carrier aircraft, WhiteKnight II. At that point, when the carrier aircraft reaches its maximum height, the SpaceShipTwo vehicle will separate and continue to over 100km.
The time from liftoff of the White Knight booster carrying SpaceShipTwo until the touchdown of SpaceShipTwo after the sub-orbital flight will be about 2.5 hours. The sub-orbital flight itself will only be a small fraction of that time. The weightlessness will last approximately six minutes. Passengers will be able to release themselves from their seats during these six minutes and float around the cabin.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
ALL suborbital spacecrafts do have nearly ZERO safety systems, so, the FAA will NEVER allow them to fly with tourists to 65 miles of altitude in the vacuum!
all achievements today are through positive thinking and exploring the possibilities.
Good Luck ! Richard