Virgin Galactic: Anatomy of a Business Model

Alex Tai, Vice President, Operations, Virgin Galactic. He plans to fly the first commercial flight of SpaceShipTwo as one of the pilots and now oversees the design and building of the craft. Image CREDIT: NMSU

LAS CRUCES, New Mexico - For Virgin Galactic--the passenger-carrying spaceliner company--plans are rapidly taking shape to offer suborbital space flights in the near-term but also to eventually offer point-to-point rocket travel around the globe, as well as to space hotels, and trips to the Moon.

While the business case for public space transportation has yet to be proven, sections of Virgin Galactic's spaceliner already dot the factory floors at Scaled Composites in Mojave, California--all under the watchful eye of aerospace designer, Burt Rutan.

Rutan and his team built and flew the piloted SpaceShipOne on a trio of suborbital treks in 2004, winning the $10 million Ansari X Prize purse in the process. Now they are hard at it fulfilling the Virgin Galactic order for commuter-class spaceliners.

The company's founder, British entrepreneur Sir Richard Branson entered into a partnership last year with Rutan creating The Spaceship Company to build a fleet of commercial suborbital spaceships and launch aircraft.

At Virgin Galactic, ticket sales for suborbital flights at $200,000 a seat are tallying up. And here in New Mexico, the design of Spaceport America is underway to handle the space-bound public traffic by 2009-2010.

The business plan is for 50,000 people to visit space over a ten year time period, explained Alex Tai, vice president, operations for Virgin Galactic. Tai is trained as a pilot in the Royal Air Force and started at Virgin as an airline pilot for Virgin Atlantic before embarking on special projects for Branson.

Working on the Virgin Galactic project from its conception, Tai plans to fly the first commercial flight of the firm's spaceship as one of the pilots. Among current tasks, he is supervising the design and construction of the new passenger-carrying SpaceShipTwo.

In this exclusive interview, SPACE.com caught up with Tai during the 2nd International Symposium for Personal Spaceflight, held here prior to the October 20-21 Wirefly X Prize Cup festivities.

Maximize the experience

"What this is about is some seven minutes of black sky; about four minutes of zero-gravity and about training to become an astronaut," Tai explained. There's no doubt in his mind that the experience will be first-rate and a full-service package--akin to the luxurious pampering already given Virgin travelers, he noted.

"You can sit somewhere in a box strapped into an ejection seat and give them zero view," Tai said. "That's no way to go into space. We'll be giving them a really sexy training experience. We're providing large windows that maximize the view...the freedom to float around in zero-gravity...to maximize the experience. I don't think we're in danger of under-delivery."

For the $200,000 a person receives an all-accommodations three-day package, hotel, training and transport to and from the spaceport site. "We'll throw in meals and champagne," Tai added.

Early adopters

Tai said that he's aware that there is still skepticism in some circles about public space travel. More stunt than a stable business. Branson is keen, he responded, on developing a legacy and becoming the first-ever spaceliner operator and owner.

Beyond high-priced seats--those early adopters of spaceliner travel that are booking and spending big time dollars--look for the cost of access to space to drop.

"There will be incremental improvements to the technology," Tai predicted. Initially, SpaceShipTwo, like its predecessor, will utilize the oomph of a hybrid rocket motor. But once the industry is underway, Virgin Galactic will look for other types of motors to plug in the back of spaceliners.

"Then the seat prices will tumble," is the forecast from Tai. Branson plans to plow back money gained from early flights into extensions of space tourism, he added.

Banking on Virgin Galactic's progress, watch for more manufacturers to pop up with other types of space vehicles. "There will be fuel to fan the invention...and the fuel is money," Tai said.

Safety in the front seat

It would be wrong to think of SpaceShipTwo as a "scaled-up" SpaceShipOne. While larger in size--both the suborbital rocket plane as well as the White Knight carrier mothership--extra margin must be built in for safety systems to be implemented. Redundant and backup systems are to be employed too.

Lofting six passengers and two pilots up to the edge of space means putting safety in the front seat and a rigorous testing and shakeout program of hardware is envisioned, Tai said.

"From a business perspective," Tai suggested, "I would very much like him to spend the least amount of money and do it in the shortest period of time. But that's not the fundamental requirement. It's producing the safest, best-performing ship. If I have to wait an extra year for that, I'll take the pressure from everyone...to make sure that we get the best possible product."

Dreamy job

Tai said by the time the first systems are delivered to Virgin Galactic, something in the range of $150 million will have been spent.

Then an operational structure must be put in place. Facilities are required to handle early operations in Mojave, California and at Spaceport America in New Mexico. A team of exceptionally competent and skilled personnel to operate the spaceliners are also needed.

"And that's going to cost money as well. I believe we'll spend between $225 million and $250 million" to reach that operating point, Tai said, perhaps staring in 2009 but also depending on how the testing program goes.

There will be a Virgin Galactic cadre of spaceliner pilots. They are being drawn from Virgin's network of airlines. "We pay top dollar. And that attracts some of the best pilots," Tai said, with those selected for space travel duty picked after a meticulous training and preparation course.

"We'll ensure that we get the best possible pilots. It'll be a dreamy job," Tai emphasized.

Passionate passengers

Tai speculates that hundreds of spaceships might be needed to handle passionate passengers from around the world that hunger for space travel.

Beyond the New Mexico spaceport--once the case for safety and turnaround time is made with the SpaceShipTwo system--rhaps semi-permanent facilities, even local municipal airports, could handle space travel operations, Tai suggested.

"It's clearly a goal of Virgin Galactic of being a spaceline operator, not just for same-point-to-same-point space tourism," Tai said. "We want to go point-to-point on the planet ...with exceptional style and safety."

Getting cheap access to low Earth orbit, Tai continued, will be leveraged from the ability to globally hop about. "That's where the real market is. It will be done off the back of point-to-point...not off going straight to low Earth orbit."

With that technology in hand, it's onward to orbital destinations, space hotel stopovers, and to the Moon and beyond, Tai said. "That's the big step, to break free of the surly bonds of Earth."

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