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Sat 12 Sep 2009 04:00 AM

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Spaceman

Will Whitehorn, president of Virgin Galactic, talks space travel, dirty tricks and Abu Dhabi.

Spaceman
Spaceman
Virgin Galactic was panned by the critics as a dream too far but thanks to an investment from Abu Dhabi it is now on course to become an incredibly profitable company.


Will Whitehorn, president of Virgin Galactic, talks space travel, dirty tricks and Abu Dhabi.

We’ve all been there. One night, you get talking, have a few drinks and come up with an idea that will change the world, or at least you think will change the world. When you wake up the next morning, it’s usually forgotten about. That is unless you happen to be Sir Richard Branson, Will Whitehorn and Buzz Aldrin discussing space travel.

“The idea for Virgin Galactic was probably born in a bar in Marrakech,” Will Whitehorn, president of Virgin Galactic tells CEO Middle East. “We had just built a capsule for Richard to fly around the world in and we were delayed in taking off by bad weather. Richard asked Buzz a very simple question about why rockets were never launched from rockets and Buzz replied: ‘we did do that and it was a good idea but in the rush for Apollo to get completed and get to the moon a lot of ideas were abandoned. But the big rocket, it worked and it was a good idea.’”

Whitehorn registered the brand rights for the idea the following day, not realising at the time that Branson had already registered Virgin as a trademark for space travel 10 years earlier.

Some 14 years since that infamous bar room conversation, Whitehorn and Branson are on the verge of the most dramatic leap in commercial space travel ever seen. Three hundred people — from Michael Schumacher to designer Philippe Starck and physicist Stephen Hawking — have each coughed up $200,000 and are patiently waiting to board the first Virgin Galactic space flight, due to take off at the end of 2011. The company, following a $280m investment from Abu Dhabi’s
Aabar Investments

, is worth a staggering $900m. First panned by the critics as a dream too far, Virgin Galactic is now a mega-brand and company that is on course to become incredibly profitable.

From dream to reality

The turning point from dream to reality came when Whitehorn met Burt Rutan, the designer behind GlobalFlyer, the aircraft that adventurer Steve Fossett used for his round-the-world solo flight in 2005, and the SpaceShipOne, a reusable aircraft that could take a pilot at least 100km into space. Whitehorn knew immediately that he would be the man to help get Virgin Galactic off the ground and into space. “I intrinsically got what Burt was telling me. He cracked one of the biggest problems of space, which is re-entry.”

Virgin has spent more than $100m developing SpaceShipTwo, which will be launched 50,000ft into space using Virgin’s carrier plane, WhiteKnightTwo. Despite the vast sums of money required for such a huge project, Whitehorn has never doubted Virgin’s capability of creating the world’s first commercial space travel company.

“I was one of those nine-year-old kids who was told by his mother in 1969, while watching the moon landing, that one day I would go to the moon. My parent’s generation had seen so much change and had seen it happen so fast that they imagined Stanley Kubrick’s vision of 2001 was going to happen.”

But it wasn’t just his mother’s intuition that persuaded Whitehorn to put his name on such a project. It was also his faith in the founder of Virgin, Sir Richard Branson. Since joining Virgin in 1987 to work in the newly listed company’s investor public relations department, Whitehorn has seen the group through some incredibly challenging times, including the British Airways dirty tricks affair, which began in 1993 and ended up in court some years later.

“There was a deep recession in the early ‘90s and Richard was determined that the airline was going to succeed [but] there were certain people at BA who were equally determined that it wasn’t,” he recalls. “That period was extremely challenging; having to track down the activities that BA were up to like slurring Virgin in the press and saying Virgin was bust when it wasn’t. At the time Virgin was a much younger company and people were much more nervous.”

BA eventually reached an out-of-court settlement with Virgin and Branson distributed the resulting £500,000 compensation he received among his staff. “It was the making of the modern Virgin Group,” says Whitehorn.

Then, of course, there was Virgin Trains, which almost ruined the brand’s reputation when it first launched after coming under fire for its terrible time keeping record. “I think one of the things that really saw Virgin get through that period was the structure that we created whereby we weren’t one big pyramidal holding company. These were independently run and separately financed businesses and the strength of Virgin and the branded venture capital model really came through during that period,” says Whitehorn.

Taking the Virgin brand onto space

With a background in public relations, it is unsurprising that Whitehorn is a huge fan of Virgin’s approach to branding. “Richard understands about brands and therefore is prepared to do things like take risks and put his brand on a defunct ex-nationalised train company on the promise that we can introduce a brand new fleet, but it will take time and it will be a challenge,” he says.

Putting the Virgin name onto space travel has obviously worked too. While 300 people have now paid nearly $40m to fly ‘sub-orbital’ with Virgin Galactic, another 700 are waiting to see the first flight before they commit their money. Some 85,000 have also signed up and are prepared to fly when the tickets drop to a more achievable price.

“[Space travel] is like a Sony flat screen television. They were originally $20,000-30,000 now they are less than $1,500. If you can get the economies of scale into this business, the prices can fall because the system is robust and, we believe, very, very safe,” he explains.

Each of the paid-up customers will complete two to three days of preparation at a purpose-built space station in New Mexico before being taken on the two hour flight, which Virgin hopes will happen at the end of 2011.

The one thing these pioneering customers all had in common was the desire to experience weightlessness. The additional room on SpaceShipTwo — the ship is twice as big as the first prototype and can carry up to six passengers — has given the firm the opportunity to combine commercial space travel with scientific research, such as micro-gravity experiments and astronaut training. Whitehorn believes this is the reason why the Abu Dhabi-based investment company,
Aabar Investments

, decided to buy a stake in the firm last month.

In August,
Aabar Investments

paid $280m for a 32 percent stake in Virgin Galactic, valuing the firm at nearly $1bn. The Abu Dhabi fund, which also owns a stake in Daimler, has committed an additional $100m to fund the launching of small satellites from the mothership to third parties.

“If we hadn’t taken that decision then (to build a bigger aircraft), I don’t think
Aabar

would have invested today. Although the space business travel plan holds up very well and they have invested into that, they can see the wider application of this system,” he says.

Abu Dhabi’s investment in Virgin Galactic will fund the test-flight programme that will begin later this year. Some analysts believe
Aabar

overpaid for its latest investment, but Whitehorn is quick to rubbish rumours. “I don’t think they have overpaid, I don’t think they’ve underpaid; it’s the right deal to take this business forward. The reason why we did this deal with
Aabar

rather than anyone else is [because] they were also committed to taking it further than others for the satellite development company and that’s really important. We believe that is going to be the second leg of this development by 2015.”

He adds that the city will also significantly benefit from its association with the company. “It gives them the opportunity to develop a science and technology park around a project like this, as well as a tourism opportunity, and that’s a very rare thing. That’s what Cape Canaveral was in the 1960s and it led to the success of Florida as a tourist destination. It also became one of the great space hubs of the world.”

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