If the early bookings are an indication, the market for space tourism more than showing signs of life.
By: Ashutosh Sinha
It was as perfect as perfect could have been. Last week, SpaceX broke fresh ground as it became the first private company to last send astronauts into space. A small step for Elon Musk’s Space Exploration Technologies Corp, or SpaceX, it could prove to be a giant leap for the space business.
A few weeks ago, US President Donald Trump signed an executive order to drive the fledgling space industry. NASA now plans a manned mission to the moon in 2024, to be followed by “sustained lunar presence”.
A few months ago, as the opening bell rang at the NYSE on October 28, 2019, the doors for space tourism were opening. Virgin Galactic Holdings made its debut on the exchange. It gave investors an option to buy into the business which hopes to send tourists into space. It was the first company of its kind to list on the exchanges.
It is time for the race for space to gear up for a big liftoff.
Vying for space biz
Virgin Galactic (NYSE: SPCE) may be looking to become the first company to send tourists to space. But it is closely being followed by Blue Origin, founded by Jeff Bezos, and SpaceX. If he manages to beat his rivals, it will be the culmination of a dream that Branson has nursed for over a decade.
For the moon mission, NASA has selected SpaceX, Blue Origin and Dynetics as the companies that will build the new lunar landing systems. Astronauts could be sent to the moon by 2024. The $967 million that NASA is spending on the Moon to Mars Mission will be split between the three companies. While a long-term stay on the moon is planned, NASA ultimately wants humans to reach Mars.
A spacecraft without any crew member launched by Boeing (NYSE: BA) in December 2019 ran into some technical problems after nearly 30 minutes of a flawless launch. It was part of the plan that could help chart the course for routine flights for NASA crew up and down the international space station.
Some of these companies could look to join hands with India as it opens doors for private companies too. India’s Finance Minister Nirmala Sitharaman recently announced a change in policy that allows private companies to participate in Indian Space Research Organisation (ISRO) led missions. She hopes that this could lead to a transformation of India’s space sector.
Buzzing market for space tour
If the early bookings are an indication, the market for space tourism more than showing signs of life. Nearly 600 people have already paid about $225,000 each for the historic journey where no one has gone before. While those are confirmed booking, a bigger number of people have registered to get an opportunity to book a seat.
If all goes well, the first flight could well happen this year and in another two years 3,200 people could have had an experience of their lifetime.
The skeptics argue that even the wealthiest may think twice before making a second booking. If there are any untoward incidents, it could disrupt the entire market too. The question being asked is whether a few minutes of a feeling of weightlessness is worth the risk, making the demand for the service is uncertain.
The Virgin Galactic stock had been inching up soon after its listing. After the February 2020 sell-off in the market, its price has nearly halved from the high above $37. With the success of the SpaceX effort, it could draw interest from investors in the Virgin Galactic stock too.
Could the stock be at a tipping point now? It could rake millions or break a few hearts.