Virgin Galactic’s Possible Businesses
A little over two years ago, I questioned Virgin Galactic’s business, asking whether it was, as the flacks stated and the fans believed, the future of spaceflight. At the time, the company had spent nearly 20 years to get to SpaceShipTwo.
Business Possibilities
In 2005, Virgin Galactic talked about possible point-to-point travel using SpaceShipThree. It re-emphasized that possibility, signing a contract with the United Arab Emirates Space Agency in 2019 as a potential step to create a spaceport network. During that time, the company pinky-swore it would launch paying passengers into suborbit soon.
Those mentions point to two business possibilities for Virgin Galactic: the suborbital fair ride and point-to-point global travel. The company is slowly progressing in its suborbital effort, conducting two missions in 2023 so far. Point-to-point travel seems to have dropped off as the company grapples with operationalizing its suborbital business. However, Virgin Galactic’s first 2023 mission suggests another business possibility as well—a suborbital research platform.
Are any of these business possibilities, using Virgin Galactic’s current launch platform, possible and sustainable? The company appears to believe so.
Virgin Galactic’s Hype and Current Market Focus
In hindsight, it’s evident that Virgin Galactic has been taking full advantage of the “Peak of Inflated Expectations” part of the Gartner Hype Cycle. However, the company has glided toward the “Trough of Disillusionment” for twenty years since its initial successes with SpaceShip. Virgin hasn’t reached the Trough yet.
It is clear to this author that Virgin Galactic will not reach its “Plateau of Productivity” in the next ten years. Its predicted slow progression is based on how the company has operated so far. Virgin Galactic has spent over twenty years beta-testing its SpaceShips, with a history of long and late projects.
Suppose testing and tweaking at least several generations of rocketplanes took twenty years. Does that mean Virgin Galactic’s new Delta class will undergo about 6-7 years of testing and tweaking before commercial use? What happens if one of the Deltas fails?
What does commercial use even look like for Virgin Galactic? Its managers were relatively bullish in the company’s first quarter 2023 earnings call about projected margins using the new rocketplane. Their outlook, however, was based on the fair ride aspect of its business and not point-to-point.
Virgin Galactic is focusing on what is essentially the modern version of a Montgolfier brothers balloon ride. Based on history, that doesn’t seem sustainable in the long term. Those intrepid brothers made a business of balloon rides. Still, most balloon rides today offer an experiential service--one for grey-haired vow renewals and life affirmations while peacefully floating in the wind.
That appears to be the market that Virgin Galactic is aiming at, with the possible bonus of passengers losing their lunch. Based on the numerous hot air balloon events, there is still an appetite for floating in a basket in the sky. But is there a similar appetite for a much more expensive, less enduring rocket ride?
Virgin Galactic thinks so and continues painting itself into a similar business corner, offering the same exciting technology it offered twenty years ago. After twenty years of sloping towards disillusionment, its technology appears less promising than initially hyped, even as the price of admission grows.
VG offers the suborbital flight experience for $450,000 per person in its new generation rocketplane. And that rocketplane still requires an airplane to get it to space, indicating the flight profile is still close to those of earlier SpaceShips.
The two-hour experience for Virgin Galactic's rocketplane passengers begins as their ride dangles under the wing of an airplane. The launch/ascent phase consists of the airplane flying to ~50,000 feet and releasing the rocketplane, which ignites a few seconds later. Passengers experience a rapid ascent to ~83 kilometers (km), still in the launch/ascent phase. During the following free-flight phase, the rocketplane spends about five to six minutes near the apogee. After that, it descends to the Earth for re-entry and landing.
The adherence to the fair ride business as a step towards point-to-point travel would make sense. But new generation rocketplanes aren’t going to make point-to-point business viable if the flight still requires an airplane to get to launch altitude. If that’s the basis for Virgin Galactic’s point-to-point business, it won’t be a practical option for travelers. The reasons for that assertion:
It’s complicated.
It’s crew-intensive.
It takes too long.
G-forces are still a concern.
It’s Complicated, Intensive, and Time-Consuming
This refers to the complexity of the suborbital launch system and not the technology Virgin Galactic is using for the airplane or rocketplane. Complexity doesn’t mean that something can’t be done, but it adds all sorts of opportunities for Murphy (of Murphy’s Law) to show up.
Two flight systems add complexity. Whereas a company such as Blue Origin focuses on its New Shepard rocket, Virgin Galactic must immediately double its requirements. It needs money for buying and maintaining an airplane and developing and maintaining a rocketplane.
Even the method of launching the rocketplane from the aircraft is complicated. The aircraft is manufactured explicitly for launching spaceships only and is a one-off. Customized craft are always more expensive than their mass-produced counterparts. One-offs are also unreliable, requiring more maintenance and vigilance.
The system’s complexity bleeds over to the crews for both craft. These crews must work by strict flight safety regulations, including complying with crew rest requirements. Imagine being at an aircraft terminal and knowing your airplane relies on two sets of air crews before it can depart. Then, add the complexity of teams not being on time, etc. If VG wants to create a daily business, it will need alternate crews to comply. It will need backup crews for the backups.
People also make mistakes. That trait is one reason why companies embrace automation. Constant training minimizes errors, which again requires more people to replace the crews in training. Virgin Galactic has invested in facilities and procedures for training crews and passengers. Training passengers is a sure indication that Virgin Galactic’s suborbital ride is for those with extra time on their hands.
Time comes into play for the hour or so necessary for the airplane to get the rocketplane to the correct altitude. If the airplane was still essential for point-to-point suborbital travel, passengers could count on an additional hour to the (admittedly) short travel time.
The Gravity of the Situation
G-forces are a concern for all suborbital passenger services.
The G-forces involved before and during the rocketplane’s engine ignition might prove too much for certain passengers. For those individuals, the FAA notes companies should take "great care" if they expose passengers to an over five-second sustained G(z) load greater than 3.
The Congressional Research Service, on the other hand, recommends explicitly G-force limitations on untrained passengers, noting that some might be able to withstand as high as 5 G. In contrast, others might pass out (G-induced loss of consciousness) at 3 G. The additional research from the FAA and CRS doesn't contradict NASA's standards but narrows down who is eligible for taking a suborbital spaceflight from the general population.
For Virgin Galactic, the flight from the runway to 50,000 ft exposes passengers to normal G-loads faced in commercial passenger jets. However, the rocketplane's drop from the aircraft and launch towards apogee exposes passengers to a G(x) acceleration of 4 for about 70 seconds. During rocketplane re-entry, passengers and crew are exposed to 6.0 G(x) acceleration for a short duration before reconfiguring into a glide at 80,000 ft.
None of the above reasons prevent Virgin Galactic from flying its rocketplane. But they demonstrate the challenges of using VG’s rocketplane for anything beyond the looky-loo mission. Despite the nifty-looking rocketplane and its ability to get passengers to suborbit to experience weightlessness for approximately 5 minutes, the business case using the current technology and launch methods leads to a dead end.
The company still requires an airplane to lift a rocketplane to a high altitude, although it is working with other companies for that carrier aircraft instead of building it on its own. The next generation rocketplanes still are purpose-built for the short suborbital ride and nothing more ambitious.
The company was bullish on its suborbital fair ride attraction in its 1Q23 call. It provided calculations for why and focused on Virgin Galactic’s Delta class rocketplane. It believes in its numbers enough to invest in a facility in Arizona to build the new rocketplanes. This analysis references those numbers as evidence of the company’s optimism. However, it’s unclear if Virgin Galactic is breathing its optimism or if its founder somehow influences some of the business’s decisions.
Amazingly, Virgin Galactic can still point to a customer waiting list despite the long wait as evidence of interest in its business. It wanted to get the number of people signed up on the list to 1,000 by the end of 2022. The fact that the company hasn’t mentioned hitting that goal probably means it didn’t achieve it. That list seems somewhat small, considering how long Virgin Galactic has been accepting applications. Although, it’s larger than one might expect, considering the lengthy delay.
While delays are a routine part of the space business, subjecting customers to constant delays over 13 years seems anathema to Virgin’s traditional focus on providing them with an exceptional experience. The tenacity of the 600 to 800 people on VG’s waiting list may indicate irrationality and naive loyalty to the company. If that’s the case, the waiting list isn’t a valid interest metric and throws the data supporting VG management’s optimism into question.
Research to be Done
If the data for the fair ride aspect of Virgin Galactic’s suborbital offering is suspect, and it isn’t proceeding with point-to-point transportation, what’s left? Virgin answers in one of its marketing brochures: research. There’s research to be done—always—with governments and companies each as prospective and high-paying customers for suborbital research flights.
According to Virgin Galactic, researchers have three minutes of microgravity time per rocketplane flight, an advantage compared to 25 seconds per parabolic maneuver in “reduced-gravity aircraft” (heard of the “vomit comet”?). It can carry a large mass payload—450 kg—and a few researchers to suborbit. No sounding rocket can do that. The rocketplane can have several large payloads in one mission. There are some organizations with ideas for the rocketplane’s flight profile already.
National Academies lists a few examples of research that could be conducted using a suborbital platform such as VG’s spaceships. The human physiologic response to microgravity is at the top of the list, which requires much more research before humans venture to the Moon or Mars.
But research in other sciences can also be done, which the National Academies site helpfully breaks down into five categories: life sciences, engineering, Earth Science, physics, etc. Each one of those categories contains at least three sub-categories, such as atmospheric chemistry, materials processing, fertilization and early development, the release of deployable payloads, etc. Those research areas are from one organization that notes at the beginning of the list that it’s “not intended to be exhaustive.” NASA also has some ideas.
Virgin Galactic already had a nation use the suborbital rocketplane as a research platform. On June 29, 2023, Galactic 01 lifted Italian military and government researchers and 13 research payloads. Those payloads showed the sheer variety of research that could make Virgin Galactic change from a rocketplane for fair rides to test/development platform: cosmic radiation measurements, technology testing, human physiology tests, and more.
There’s also the microgravity training aspect that the rocketplane brings to the table. If certain companies are to be believed, more humans than ever will be working in space. Virgin Galactic’s rocketplane can help prepare them for that.
Of the three business possibilities, using rocketplane as a research/training platform seems to be the most sustainable. Focusing on that business wouldn’t preclude offering suborbital fair rides. Admittedly, the research business is less inspiring than watching people float in a cabin in the sky. Certainly, less inspiring to potential investors. Virgin Galactic would gain experience and insight while operating its research business, developing a more mature, less Rube Goldberg-esque method of point-to-point global travel.
If that is the business it wants to be in.
John Holst is the Editor/Analyst of Ill-Defined Space, dedicated to analysis of activities, policies, and businesses in the space sector.
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