Those VIPs who bought tickets for Richard Branson's space dream suffer a familiar sinking feeling

There are two arms to Sir Richard Branson’s space endeavours – Virgin Orbit which launches commercial satellites into space and Virgin Galactic, which offers ninety-minute space flights for over US$ 250,000 each.

With only two space test flights under its belt, Galactic has over 600 people signed up — including pop star Justin Bieber and actor Leonardo DiCaprio — representing about US$ 80m in pre-paid sales.

But yesterday there was bad news for the other of Branson’s space endeavours, as Virgin Orbit, which uses a rocket slung underneath the wing of a Boeing 747 to fire satellite payloads into space from 35,000 feet, failed to get that launch rocket into orbit during its very first airborne test.

This was how Virgin Orbit announced the bad news on Twitter:

Orbit’s setback doesn’t directly affect the Galactic VIP side of the business. Except that, in reality, it does. Firstly it’s a huge emotional downer and plays into some of the negativity surrounding Branson’s space initiatives that has been curated by Private Eye and others in the media, with long memories. Some paying customers bought in as long ago as December 2009.

Private Eye 2018 article on Virgin Galactic failures
In October 2018, Private Eye catalogued a series of Sir Richard Branson’s past spaceflight promising as the entrepreneur announced that his Virgin Galactic project ‘should be in space within weeks, not months’.

Secondly, it’s an unwelcome reminder of Galactic’s own fatal crash in 2014, when pilot error and inadequate safety controls underlined just how much close to the safety cliff-edge any new space endeavour has to pass.

Thirdly a successful launch would have helped release payment on a number of Orbit’s commercial satellite launch contracts that could only have assisted with Galactic’s own route to launch. Orbit had said before Monday’s launch failure they hoped to ‘quickly pivot’ to commercial operations and that its second rocket was in the final stages of being built in its manufacturing plant near Los Angeles. A payload from NASA is supposed to be Orbit’s first commercial launch along with a group of satellites for universities in the US.

In fact, thanks to the coronavirus, the rocket failure could not have come at worse time. Virgin Group is battling acute liquidity issues in their better-known mature businesses, including the two Virgin airlines. So bad is this that earlier in the month the group sold twenty percent of its shareholding, or 25m shares, in Virgin Galactic [NYSE ticker SPCE] to secure US$ 366m for other parts of the Virgin empire. Virgin still has a 40 percent stake.

All of that needs to be placed into a wider context though. In November 2018 UBS picked Space as one of the best long-term investment sectors available: ‘the space economy is reaching an inflection point and is poised to grow from US$ 340bn currently to almost US$ 1trn in the next couple of decades’.

Sir Richard Branson writes a letter to his grandchildren on the occasion of Virgin Galactic’s SpaceShipTwo successfully completing her first space flight and return to earth in December 2018.

From the investment prospectus, Virgin Galactic’s promise to investors is a profit margin of 65% on each commercial flight, approx. US$ 160,000 profit on a US$ 250,000 space-flight VIP ticket or US$ 975,000 profit with a full payload of six paying passengers.

In August last year, Virgin Galactic revealed what Spaceport America looks like, their ‘Gateway to Space’ facility in the New Mexico desert that was designed by Lord Foster’s architectural company.

Passengers will get to see the curvature of Earth against the blackness of space and experience a few minutes of weightless before coming back down for a runway landing.

The purchase price includes the astronaut training process which takes three days, with the flight on the fourth. Preparation includes ‘high G training’.

According to, two more SpaceShipTwo vehicles are currently being built in Mojave, and others will likely follow; the company's hangar at Spaceport America can accommodate five SpaceShipTwos and two WhiteKnightTwos simultaneously.

Investment deck for Virgin Galactic’s 2019 listing, comparing to Blue Origin from Bezos
Taken from the investment deck for Virgin Galactic’s 2019 listing, Branson’s space flight is compared against that of Amazon boss Jeff Bezos’s Blue Origin.

Investment deck for Virgin Galactic’s 2019 listing, showing growth in $10M+ net worth individuals
The Virgin Galactic investment deck is built on figures from Credit Suisse to explain the Total Available Market [TAM] of individuals worth US$10m plus, assuming a compound annual growth rate of six percent.

CNBC interviews the CEO of Virgin Galactic in January this year about the prospects for space tourism and the next generation of point-to-point hypersonic space craft.

In reporting the reversal for Virgin Orbit, the Financial Times noted that the first full trials for new rocket systems often fail, and Virgin Orbit had lowered expectations ahead of Monday’s mission.

‘Before Monday’s mishap, Virgin Orbit executives said that even an incomplete test could yield plenty of valuable information. They hoped to learn from a number of stages of the flight, from releasing the rocket and igniting its engines to firing the second stage and seeing it release its payload. “As we said before the flight, our goals today were to work through the process of conducting a launch, learn as much as we could, and achieve ignition,” the company tweeted. “We hoped we could have done more, but we accomplished those key objectives today.”’

In terms of a first scheduled flight for those commercial passengers, Virgin Galactic has no news. The prospectus talked about Q1/Q2 this year which means a further delay. What is obvious to see is that the Virgin Galactic’s space operation is relocating to Spaceport America, as their hub, away from the original testing base in the Mojave Desert.

Just before Christmas last year, the local newspaper for Spaceport America caught up with retiree Sally Krusing from Tucson, Arizona, who had purchased her ticket to ride back in 2013. She was happy to wait, commended Virgin’s exceptional customer service, and made clear that if she had a change of mind the terms and conditions of her contract allowed her a full refund.

In the meantime, in footage released just last week, we got to see SpaceShipTwo make her first solo flight to and from Spaceport America which happened on May 1.

Author image
Charlie Charters is a former rugby union official and sports marketing executive turned thriller writer whose debut book Bolt Action was published by Hodder & Stoughton in 2010.
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