The world’s richest man, Amazon founder Bezos, was robbed of the headlines by Richard Branson.
While Bezos is still preparing for the first manned space test flight aboard his company’s blue origin rocket, Virgin Galactic founder Richard Branson, who is also on the private space track, has taken the lead. On July 11, 2021, Richard Branson, 71 years old, boarded the “unity” spacecraft of his space travel company “Virgin Galactic” after being delayed for one and a half hours due to the weather. He successfully arrived at the edge of space and landed safely about an hour later.
Branson became the first tycoon ever to fly into space by a private space company. This also allows Virgin Galactic to compete with blue origin and SpaceX for the space travel market, taking the lead.
Reliability and safety are psychological barriers to private space travel flight. Especially when the design of Virgin Galactic escape free system is criticized, Branson’s personal test shows his confidence in the product“ Branson is not a fearsome man, but he is also thoughtful. He would not have gone if he had not estimated the safety. ” Will Whitehorn, the former president of Virgin Galactic, told the media, “if the boss doesn’t go, how can we expect scientists or paying passengers to trust security?”
Virgin Galactic, founded in 2004, plans to provide commercial space travel services for paying passengers in 2022. According to the different time of ticket purchase, interested passengers can book seats at the price of US $200000-250000 (about RMB 1.3-1.6 million). 600 passengers, including Brad Pitt, Leonardo DiCaprio and Tom Hanks, have paid a deposit of more than US $80 million in advance. The company expects to operate about 100 flights a year in 2023, which is equivalent to building a “highway” to space.
“Welcome to the new space age.” Branson said at the spaceport on the same day, “I used to be a child who dreamed of looking up at the stars. Now I am an adult looking back at the beautiful earth on the spaceship.” The success of Branson’s test flight not only opened the way for Virgin Galactic to attract new customers, but also became one of the milestones in the private space industry.
But when space travel becomes the new “game of the rich”, the United States has not systematically regulated private commercial space vehicles, and passengers have to bear their own risks. Foreign media reported that neither Branson nor Bezos bought life insurance for their space flight.
Before boarding the aircraft, Branson took a group photo of SpaceX founder Musk on social media. Bezos publicly wishes Branson through social media, “I hope you and your team can succeed and return safely.”
Space tourism has become a rare highlight of Virgin Group’s epidemic situation
Although Branson did not publicly claim that he was “grabbing the headlines”, it seems that he needs a public victory more urgently than Bezos and musk. In COVID-19, when Amazon and Tesla’s shares soared and surpassed or approached the market value of trillions of dollars, Branson’s business empire was hit hard.
Virgin Group, which started in the record business and then expanded to aviation, telecommunications, media, finance and other industries, has become a diversified business empire, with more than 40 subsidiaries in the name of “virgin” and a total annual revenue of 23 billion US dollars. Virgin brand, which is deeply bound with Branson, represents a bold, free and unconventional way of life. However, in the global epidemic, it has suffered heavy losses due to the sharp reduction of the demand for home and travel around the world. Branson’s once proud travel plans such as airlines, hotels and gyms have been defeated.
Virgin airlines, the flagship brand of the virgin Empire, announced 3500 job cuts after it had to suspend flights due to the epidemic. In August last year, it applied for bankruptcy protection in New York by invoking Chapter 15 of the U.S. federal bankruptcy law. Virgin is 51% owned by Branson’s Virgin Group and 49% by delta.
Virgin airlines, which tried to turn around its troubles, once asked its employees to take eight weeks of unpaid leave and hoped that the British government would help them, but met with resistance. Since then, Branson turned to private equity for virgin blood transfusion, and through the sale of two Boeing 787 fundraising. However, the epidemic situation in Europe and the United States has not yet completely dissipated, and it is unclear when the aviation sector will rebound. According to the financial report released by Virgin airlines in May this year, the annual revenue in 2020 is $1.2 billion, which is two-thirds lower than the annual revenue of $4 billion in 2019. In addition to virgin airlines, virgin Australia, another airline of the Virgin Group, also entered into the voluntary custody procedure of bankruptcy protection in April 2020. At that time, it owed us $6.8 billion.
Under the pressure of the epidemic, Virgin Group’s space sector, including Virgin Galactic and virgin orbit, the satellite launch company, has almost become the only bright spot in Branson’s business empire, but it also faces financial pressure.
Blue origin, which is also a private space travel track, relies on Founder Bezos to sell $1 billion of shares every year. SpaceX has won several billion dollar contracts with NASA in addition to venture capital. By contrast, Virgin Galactic, which was founded in 2004, was primarily funded by founder Branson and an Abu Dhabi sovereign fund before going public through spac. After the listing, the latest disclosure shows that Virgin Galactic holds about $617 million in cash. Based on a quarterly loss of $50-60 million, the company has about 10 quarters of cash left.
At a time when the global epidemic has not yet completely dissipated, the outside world is worried that if the economy cannot recover quickly, Branson will have to sell some shares of Virgin Galactic to give blood to other sectors.
Debate on the route of commercial suborbital flight
Unlike the orbit of the international space station at about 400 km, the “space travel” of blue origin and Virgin Galactic competition is realized in suborbital orbit, that is, at an altitude of 20-100 km from the earth, so the space experience time is only 3-4 minutes. According to Virgin Galactic’s $200000-250000 ticket price, it is equivalent to paying $60000-80000 (about 380000-510000 yuan) for each minute of space experience.
Virgin Galactic’s weightlessness experience live
Branson’s “space journey” was recorded live on July 11. At about 10:30 a.m. local time, his spaceship “unity” took off from the space port near New Mexico on board the jet VMS Eve. About 40 minutes later, the plane rose to an altitude of about 15 thousand kilometers. Then, Tuanjie separated from the carrier and flew at three times the speed of sound propelled by rocket engines to an altitude of 86 kilometers above the earth’s surface. In microgravity, passengers, including Branson, are released from their seats, suspended in the air, and can enjoy the space scenery from the windows. In the process of returning to the earth, the crew unlocks the twin tail trusses and makes the fuselage rotate at an appropriate angle to make the spacecraft enter the earth’s atmosphere like a badminton. Passengers will have an “overload experience” during the descent, which is six times the gravity. After that, the spaceship glided in the air like an airplane and landed on the runway under the control of the pilot.
As Branson claims to have completed his own space flight, there are a lot of controversies and contrasts surrounding the voyage experience. The blue origin of Bezos is shown on twitter, suggesting that Virgin Galactic’s aircraft has small portholes and no escape system. What’s more, it has not reached the height of “space”.
“From the beginning, the new Shepard was designed to fly above the K á RM á N line, so there were no asterisks next to our astronauts’ names.” Blue origin insinuates on social media that Branson’s Virgin Galactic spaceship is just a “high-altitude plane”, which does not reach the edge of space generally recognized by the industry. Carmen line is defined by the International Federation of air sports (FAI) as the boundary between the earth’s atmosphere and outer space, with an altitude of 100 km.
According to blue origin’s previously announced plan, Bezos’s “space trip” experience on the 20th will be different. The blue origin of the new Sheppard rocket will be launched vertically from the ground, reaching more than 100 kilometers above the earth’s surface. Passengers can experience weightlessness for about three minutes, even unfasten their seat belts, float in the cabin, and watch the distant earth from a huge window. Seven minutes after liftoff, the capsule will start the landing procedure. Passengers need to fasten their seat belts to experience a high-speed fall. Four minutes later, the capsule will automatically open its parachute. There is no need for manual operation by the pilot inside the capsule. The capsule plans to land in the desert of the western United States to complete the journey. At present, blue origin has not yet sold tickets to the public. According to the results of previous auctions, passengers riding in the capsule with Bezos will have to pay $28 million.
But Richard Branson doesn’t seem to care about the controversy. The huge traffic brought by the controversy and the aura brought by the successful flight test make him enjoy both fame and wealth.
This is not his first event marketing. In 1986, in order to promote virgin airlines, which had a difficult start, Branson personally sailed across the Atlantic Ocean; In 1987, he flew across the Atlantic Ocean in a giant hot air balloon. His vehicles are marked with virgin’s huge brand identity, which makes personal risk-taking behavior become a marketing Carnival again and again.
This is also the experience he inherited from his predecessors. When Branson first stepped into the aviation industry in the 1980s, he received the advice of British Aviation entrepreneur Sir Rick, “make sure your brand appears on the cover of the magazine.”. Since then, Branson has repeatedly used event marketing to escape from the edge of death 75 times and become the target of media pursuit.
Branson’s personal test aircraft also brings real benefits. In May this year, when the news that the test flight might be delayed came out, the company’s stock market value evaporated by a fifth. In June, Virgin Galactic got the FAA passenger launch permit and hinted that Branson might test the spacecraft before Bezos, the stock price jumped nearly 30%.
“Space is not the wild west of the rich”
Behind Virgin Galactic and blue origin’s scramble for commercial private space tourism is the desire of the top rich for scarce experience.
“Given the limited capacity, Virgin Galactic is unable to serve all interested people.” Oliver Chen, an analyst at Cowen, an American securities firm, said in the research report that the business model of space tourism can be compared with luxury goods – a spacecraft of Virgin Galactic can carry up to six passengers and launch up to five times a month.
Scarcity and supply less than demand are typical characteristics of luxury industry. At this stage, space travel is still a game for the rich. The Cowen survey found that about four high net worth people with net assets of more than $5 million were interested in paying $250000 for space travel. According to the data in 2019, there are 2 million people with net assets of more than 10 million US dollars in the world.
In 2018, Virgin Galactic suspended booking for space travel, just after the company successfully conducted its first space flight test. It is expected that Virgin Galactic may reopen booking after Branson’s successful space flight test, and may raise the price to $400000 to cover the high R & D and manufacturing costs.
But it’s still an untested niche. Under the supply shortage and security cloud, Virgin Galactic is using the operation of high-end clubs to sell “ultimate experience” and “high-end contacts” to high net worth groups who are interested in “going to heaven”, and it is also targeting potential passengers ahead of other competitors.
Robin Vaughn, the founder of Vaughn oil company in Texas, USA, spent 200000 US dollars to book a space travel ticket for Virgin Galactic in 2006. Although he has not boarded his spaceship in the past 15 years, he does not regret spending the money.
“It’s not just about space travel, it’s about building a community and membership.” Oliver Chen, an analyst at Cowen, a US securities firm, said. Similar to the “car club”, Virgin Galactic sells high-end circles with similar tastes and organizes ticket buyers’ gatherings from time to time. Richard Branson also opened his private islands in the Caribbean Sea for members of the “Virgin Galactic founder club” to socialize.
In 2020, Virgin Galactic’s new CEO also seems to indicate the direction of the company’s business model. Unlike the former CEO who used to work for NASA, the new CEO, Michael kolglazier, was a Disney executive. He has no aviation and aerospace experience, and is in charge of Disneyland. His field of expertise is “creating and managing safety, innovation and entertainment experiences for consumers”.
It is worth noting that in the live video of Virgin Galactic manned flight test, compared with the boring technical details, “marketing talent” Branson introduced a large number of entertainment elements, more like a big show, and every passenger was like a star with many stars in the camera tracking. The live broadcast was hosted by American talk show stars. During the flight test, the pilot made a series of jokes. At the same time, a special team tracked and photographed the pilot signing the flight book and taking the sponsor’s vehicle to the take-off point. Branson’s flight test is also signaling to potential sponsors and aspiring wealthy groups.
While people are cheering for the progress of science and technology and entrepreneurship, the space travel project is also accompanied by controversy and doubt.
Bill Nelson, director of NASA, recently said that space is by no means the “wild west” of the Billionaires: “they have to undergo the same rigorous physical and psychological tests as other professional astronauts.” However, the United States has not yet systematically regulated commercial space. The previous bill passed by the US Congress stipulates that the Federal Aviation Administration of the United States shall not issue commercial spacecraft standards until 2023 at the earliest, which means that passengers participating in private space flight have to bear their own risks.
At present, whether the physical conditions of passengers are suitable for boarding the spaceship or space capsule is decided by each company. People involved in commercial space travel identify risks mainly by signing “informed consent forms”. Considering the uncertainty of space travel, there is no special insurance for participants in the United States. According to foreign media reports, neither Branson nor Bezos, who is about to take the capsule nine days later, have taken out life insurance for space travel.
Reprint indicated source：Spark Global Limited information