Virgin Galactic Gears Up: The Dawn of Commercial Space Tourism
June 16, 2023
The global space tourism industry is on the cusp of a significant transformation. Virgin Galactic (SPCE) has announced the start of commercial operations from June 27. The inaugural flight, aptly named “Galactic 01,” will carry three crew members from the Italian Air Force and the National Research Council of Italy. Their mission: conducting microgravity research with scientific payloads. This historic journey will pave the way for monthly private astronaut flights, set to begin in early August.
Riding the Market Tides
Virgin Galactic’s stock value has ridden a rollercoaster since its peak at nearly $60 in 2021. It suffered due to numerous delays, technical challenges, and market volatility. However, Thursday’s announcement sparked a 44% surge in after-hours trading, lifting the share price to $5.84 and erasing a 7% loss from the regular session. Notably, the current short interest on SPCE stands at 23.94% of the total float, with a 52-week trading range between $2.98 and $8.56. Ivan Lee, an analyst from Seeking Alpha, recently voiced caution about Virgin Galactic’s future, citing concerns about revenue projections and technology. He pointed out that “the numbers don’t seem to add up for at least the next 3 to 4 years.”
Billionaire Space Race: The Saga Continues
This breakthrough comes nearly two years after Virgin Galactic’s founder, Richard Branson, outpaced fellow billionaire Jeff Bezos in the suborbital space tourism race. Bezos’ company, Blue Origin, hasn’t launched its New Shepard vehicle since September 2022, due to a booster-related issue during an unmanned flight. Virgin Galactic, on the other hand, is gearing up to launch its flights from Spaceport America in New Mexico, targeting the affluent clientele. For a 90-minute journey, which includes several minutes of weightlessness, the ticket price is set at a hefty $450K. This is a significant increase from the initial batch of 800 tickets, which were priced at around $200K each. This leads to an intriguing question: What is the Karman line, and why does it matter?
Regulatory and Future Considerations
Since 2004, the U.S. Congress has kept the FAA from regulating the safety of commercial space flights, aiming to encourage sector growth without imposing burdensome compliance costs. Presently, crews operate under an “informed consent” policy, meaning prospective astronauts accept risks akin to those of skydivers and bungee jumpers. This policy has been extended several times, with the latest extension valid until October 1. This prompts another question: Is point-to-point space travel becoming a near-future reality?