It is estimated that the space tourism and travel market will generate USD 7.9 billion and fly 41,000 passengers by 2030, with orbital tourism contributing USD 5.9 billion.
Sir Richard Branson is a British entrepreneur who has made significant contributions to the aviation and space industries. He founded Virgin Galactic (listed on the New York Stock Exchange) in 2004, which has produced significant commercial and scientific aviation progress. In July 2021, he successfully reached the edge of space on board his Virgin Galactic rocket plane, making him the first of the new space tourism pioneers to try out their own vehicles. The primary sources of revenue are from carrying payload cargo and providing advanced technology aerospace engineering services to the U.S. government. Virgin Galactic’s goal and main strategy is to generate most of its revenue from space tourism.
Virgin Orbit is another company founded by Sir Richard Branson in 2017, which aimed to provide flexible and cost-effective launch services for small satellites. However, the company faced several challenges and setbacks that led to its bankruptcy in April 2023. According to a report by CNBC, Virgin Orbit was unable to generate enough revenue to sustain its operations due to its inability to reach the rate of launches necessary.
Therefore, with the focus remaining on Virgin Galactic, profitability relies on surviving the next few years before generating significant revenue. According to one report, Virgin Galactic will need to build and operate one additional Virgin Spaceship vehicle to be able to break even in a year. Assuming it would be available to carry paying passengers in late 2024, which means that the earliest Virgin Galactic could break even is 2025. The Virgin Galactic spaceflight system consists of a large aircraft called the Virgin Mothership (VMS), which carries the passenger-carrying spacecraft called the Virgin Spaceship (VSS). Each VSS carries 2 crew and 6 passengers. Both the VMS and VSS are reusable.
Virgin Galactic announced its financial results for the third quarter ended September 30, 2023, and provided a business update. The company has successfully completed six spaceflights in six months with overwhelmingly positive customer feedback.
The company’s cash and marketable securities position as of September 30, 2023, was approximately USD 1.1 billion. The company’s revenue for Q3 2023 was USD 1.7 million, compared to USD 0.8 million in Q3 2022. The company’s net loss for Q3 2023 was USD 105 million, compared to a net loss of USD 146 million in Q3 2022.
In summary, privately run space companies with big visions face severe capital requirements and inevitable production delays, and escalating operating costs. Virgin Orbit did not make it and went into bankruptcy, and Virgin Galactic is just on the cusp of success, albeit with many delays since its inception in 2004. Nevertheless, if Virgin Galactic can deliver its craft on schedule and conduct the projected number of flights, then it clearly will have a business with a ‘space moat’ facing virtually limited competitors, excellent customer feedback and huge barriers to entry. However, it would take a brave soul to bet that the current projected dates for flight commissioning will be met 100%.