– Aparajita (Class of 2023, IBS Hyderabad)
INTRODUCTION
“One small step for man, a giant leap for mankind”~ 50 years ago, Neil Armstrong spoke this famous line when he became the first man to step on the moon.
In 2021, however, two missions were launched within a fortnight of each other, on July 11th and 20th, to make space travel as accessible as flying.
SPACE COMMERCIALIZATION
Commercial use of space refers to the delivery of commercially valuable goods or services using technology launched into Earth orbit or beyond. This phenomenon, also known as the Space Economy (or New Space Economy), is hastening cross-sector innovation processes by merging the most modern space and digital technology to provide a diverse range of space-based services.
The fact that attention has shifted from the fringe to the mainstream is one indicator that big industries are taking “space” more seriously. While research indicates that the space economy is facing overpopulation and monopolization, which are usual when businesses compete for a scarce natural resource, the outlook for the future is more than optimistic.
BLUE ORIGIN VS VIRGIN GALACTIC
Jeff Bezos’ Blue Origin and Richard Branson’s Virgin Galactic are two such companies that have forayed into the space tourism sector with many other companies close behind.
With New Shepard and SpaceShipTwo, Jeff Bezos and Richard Branson are competing in the same market of suborbital space travel. They are competing to be the first to launch paying clients on short space shots by using opposing technology ideologies for space capsules and spaceplanes.
FUNDING
Virgin Galactic, like many of Branson’s other businesses, is backed by public funding. Following the FAA’s clearance of passenger travel in June 2021, its stock hit a high of over $60.
Blue Origin, on the other hand, is a privately held company, with Amazon founder Jeff Bezos previously stating that he would sell approximately $1 billion in Amazon stock per year to fund the venture.
TICKET SALES
For ticket sales’ buzz, Blue Origin held an auction where the highest bidder went for 28 million dollars though requested to be switched to a later mission owing to schedule issues. Blue Origin ended up carrying the world’s youngest and oldest astronauts, 18 and 82 years old respectively.
The company already has approximately $100 million in commercial sales for flights on the New Shepard rocket. This year, two more commercial flights are scheduled, but Bezos said he doesn’t know how many will be available in 2022 because “demand is very, very strong”.
Meanwhile, Virgin Galactic estimates that commercial service will begin in early 2022. While Branson’s flight on July 11 was the company’s first with a full crew, none of the passengers were paying customers. Sirisha Bandla, an aeronautical engineer, was one of the crew members and became the third Indian-origin woman to fly into space. Another interesting fact is that Elon Musk, a third billionaire who is interested in space tourism, has purchased his Virgin Galactic ticket and is on the waiting list.
Ticket costs for Virgin Galactic were previously set at $250,000, but Wall Street anticipates them to rise to $500,000 and the company has collected $80 million in sales and deposits.
However, Branson has stated that he would like to see rates fall to $40,000, which could perhaps ignite a fare war.
And if ticket rates end up nearly the same, the cabin experience, more time spent weightless, a higher altitude, more specialized training, and more expensive hotel and family experience in the ground could become the decisive considerations.
But ultimately, the winner of this space race will be the one who will become the “it” space tourism provider.
DIVERSIFICATION
Apart from space tourism, Virgin Galactic also has agreements with NASA. In June 2020, the company signed a partnership with NASA to develop an astronaut training program.
The SPCE shares soared as a result of the announcement. In fact, it has already begun training 600 customers for its planned space flights.
Blue Origin, on the other hand, is also aiming to be a much more diversified company than Virgin Galactic. But Blue Origin’s ambitions span further into space. It is developing a deep-space rocket, lunar lander, and a constellation of satellites for internet service. They believe that it’s not as potentially detrimental to the company’s long-term development if they (Blue Origin) are not successful or not immediately successful.
CONCLUSION
Decreasing costs for launch and space hardware, in general, have enticed new entrants into this market, and companies in a variety of industries have already begun leveraging satellite technology and access to space to drive innovation and efficiency in their products and services. While space remains speculative, particularly in terms of business model creation, several elements are converging presently to imply that big enterprises’ journey into space is imminent. And Elon Musk’s recent announcement that he intends to launch an all-civilian crew into orbit in the fourth quarter of the year further confirms that we are on the verge of ushering in a new era of private commercial space travel.
REFERENCES
Amritanshu
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