Virgin Galactic (SPCE) hopes to launch the first private commercial space tourism flight into space by the end of this year, but the company is also trying to revolutionize space travel on Earth.
“What we are doing is essentially the only company that’s going to be taking people admittedly up to space,” CEO George Whitesides told Yahoo Finance’s On the Move. “But taking people inside a winged vehicle faster than supersonic speed, we’re the only company going to be doing that with a winged vehicle.”
Virgin Galactic’s spaceship Unity and two others under construction also promise to speed up travel between continents and across oceans. “This is something that I think everybody wants. Who wouldn’t want to get to go across the ocean or something significantly faster?” Whitesides said.
Growing a business beyond space tourism promises to generate billions of dollars in new business for Virgin Galactic in the global aviation services market. Virgin Galactic estimates the total addressable market, TAM, is $900 billion. The spaceline, as it calls itself, plans to access the premium side of that market, which it estimates to be around $300 billion. “So even if we were to capture a relatively small portion of that, we’re still talking about a huge TAM,” Whitesides said.
Virgin Galactic’s stock had a roller coaster ride last week after analysts from Morgan Stanley and Credit Suisse both cut their ratings, with stock falling by 24% in early trading on Thursday. However, the stock was up nearly 12% again by market close on Friday.
All systems go for high speed global mobility
Virgin Galactic’s plan to monetize space tourism includes using its “proprietary technologies and capabilities for other commercial and governmental uses,” according to the company’s first earnings report released last week. Its growth strategy also envisions the development of “high speed global mobility vehicles that drastically reduce travel time from point to point,” for instance from Los Angeles to Tokyo in just two hours.
Time is a precious commodity, according to Virgin Galactic, which envisions a “fleet of winged vehicles integrated into existing airspace and airport infrastructure for accelerated adoption,” according to the report.
Whitesides says people get excited about space, but within Virgin Galactic the big picture is equally as motivating. “It's what makes us excited, you know, the opportunity to bring people together and to really change the way the world connects,” Whitesides said.
Right now Virgin Galactic is focused on meeting the last nine FAA required verification and validation milestones to begin regular space tourism flights. It was the first private space tourism company to acquire an FAA license under which it has already conducted suborbital space flights.
It previously planned to launch company founder Sir Richard Branson later this year on its flight inaugurating regular service. The company has not committed to a date for Branson’s trip but has registered close to 8,000 passengers, all of whom are willing to pay $250,000 for a trip to space. It’s the first phase Virgin Galactic says of its plan to revolutionize how we travel.
Adam Shapiro is co-anchor of Yahoo Finance’s “On the Move.”
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