Space Odyssey

by Diane Milne

Sir Richard Branson has paid €70 million in a bid to become the world’s first space tourism operator. But how risky is his investment and will the credit crunch mean a crash landing for the project? Diana Milne meets Virgin Galactic president Will Whitehorn to find out.

It's the 30th anniversary of the first moon landing and, if Sir Richard Branson has his way, just two years away from another giant leap for mankind - space tourism. Will Whitehorn, President of Virgin Galactic, has just given a speech at the London headquarters of the Royal Aeronautical Society at the organisation's first Space Tourism Conference. It's a sign of the times. What was once regarded as a harebrained scheme and headline-grabbing stunt by Branson is now the subject of a two-day conference attended by the world's aeronautical elite - and Whitehorn's speech is the star attraction.

Afterwards, over lunch, he relives the scepticism he encountered from the scientific community when Virgin Galactic was first launched in 2004 - and how much their attitudes have changed since then: "The initial reaction was, 'we've heard it all before, people think they can build things to get to space cheaply but it has never turned out to be the case'. I think what's happened now is that the interest in the scientific community has grown exponentially with the witnessing of the technology actually starting to come together and work."

To boldly go

For Whitehorn and his team the Virgin Galactic project has reached a turning point, with ideas that have been five years in the planning finally becoming a reality. A week before the Space Tourism Conference, Whitehorn was in New Mexico where ground was finally broken on the construction of Virgin Galactic's first launch site: Spaceport America. The 110,000 square foot facility will be the site of Virgin Galactic's €212 million space launch system, which will rocket its space launch vehicle, VMS Eve and spacecraft SpaceShipTwo, into space. On board won't be professional astronauts but passengers who will have paid €$124,000 for a ticket and undergone just three days of training before taking their place in history as the world's first space tourists.

The hugely complex and high-risk project represents a massive investment for the Virgin Group - €70 million so far. And Whitehorn admits that there were many times along the way when he wasn't sure that the gamble would pay off: "There were times when I didn't think this was going to happen. We've had numerous occasions when we weren't sure whether the technology would work in different areas." He goes on to say, however, that many of the technical problems have now been ironed out. VMS Eve has already undertaken 16 test flights, with Sir Richard Branson on board for one of them, and SpaceShipTwo, which is modelled on SpaceShipOne, originally designed by the renowned aeronautical engineer Burt Rutan, is on target to be unveiled at the end of this year. "The space port is under construction, the spaceship is nearly finished," Whitehorn explains. "The rocket motor is now firing and it is performing excellently so I've gone from probably seeing hundreds of stumbling blocks two or three years ago to seeing no real stumbling blocks now."

Cash flow

One problem that can't be fixed at Virgin Galactic's labs, however, is the effect of the economic downturn on ticket sales. To date, the company has sold 300 tickets, with customers paying an initial deposit of €14,000 each. Its aim, says Whitehorn, is to have sold 700 tickets by the time it starts flying commercially and to have accumulated €56 million in deposits. Whitehorn says sales have been affected but that it is currently on track to reach its target, selling around five to six tickets a month: "Ticket sales were affected by the credit crunch but less than we expected. We had a few cancellations, particularly from one or two people that had been affected by the Bernard Madoff scandal who lost all their money. But sales are now at the same level as they were before the credit crunch began. We're selling on average five to six tickets a month which puts us on track to get to 700 tickets in the next two to three years."

Ticket sales are crucial to Virgin Galactic's success in the early years; however, the company sees an exciting long-term future for the technology in scientific research.

To date, says Whitehorn, scientific experiments in space have been hampered by the fact that existing space launch systems are too expensive to use for the purpose. Virgin Galactic's relatively cost effective solution could see it being used, for example, to produce solar power in space, or to store servers in space. "There are three or four things happening at the moment in the world of science, which are really exciting if we can find cheap ways to fly to space. The technology is there. The problem is that the space launch systems were designed 60 years ago for big old-fashioned rockets and it costs hundreds of millions of dollars every time a launch is done. We won't get the breakthrough in space, industrially and scientifically for the next generation unless we find much cheaper, more environmentally friendly ways to get there." He goes on to say that as other uses for Virgin Galactic's technology are found, space tourism could end up accounting for just 50 percent of its profits: "In the early years, space tourism will be the source of the economics to make this work. "80 percent of this business will be space tourism. And as we move forward that percentage will diminish over time as all these other industrial and scientific applications start to be utilised. Eventually I can see space tourism falling to 50 percent."

Ironically, however, one of the biggest potential uses for Virgin Galactic's craft doesn't involve space tourism at all. Ultimately, Whitehorn believes that SpaceShipTwo could be used as a form of low cost, low carbon, high speed commercial air travel - taking passengers from one side of the world to the other outside the earth's atmosphere. "I think the potential for that is huge," says Whitehorn. "We want to give this system the capacity to get from point-to- point outside the atmosphere. That would be a really exciting breakthrough. That means people could travel from London to Australia in two-and-a-half hours - and not only that but they wouldn't be putting fossil fuels into the earth's atmosphere in doing so."

Getting on board

Given the huge potential of the technology as a form of low carbon travel and a catalyst to scientific research, it is disappointing that as a British company, Virgin Galactic has had to build its first spaceport in the US. The main reason is that the technology came from America but also because at present the UK lacks the regulatory framework needed to support the development of space tourism - a bone of great contention with Whitehorn, particularly as Lossiemouth in Scotland had put itself forward as a potential location for the spaceport: "I think it's quite likely we would have had to do this project in America anyway because the original technology came from America. But clearly this is a system that doesn't have the old problems of old ground-based rockets, which were difficult to launch in Britain because of the high population and the weather. This is a system that could work here albeit in less populated areas like the North of Scotland or Cornwall. The fact is that even if we could come to an area such as Lossiemouth and they welcome us with open arms to operate there in the future, we don't have the legislation to allow us to do it."

Whitehorn believes that the UK's slowness in introducing this legislation is foolhardy given the potential future value of the space industry. "In Britain alone nearly 50,000 people currently work in space-related activities and in Europe the number is probably treble that. And if we had cheap ways to get to space there would be so many more things we could do." He reveals that Virgin Galactic is in talks with the UK government to resolve the issue and that it hopes the situation will change within the next 18 months. In the meantime, he says, he expects there to be a wave of private investment into space-related ventures: "Now that realisation about the potential of the space industry has come about (and it really has come about just recently) I think you'll see a wall of private sector investor money going into space over the next 10 years, the likes of which we haven't seen since the internet revolution."

 His prediction has already come true. Shortly after the Space Tourism Conference, Virgin Galactic announced that Abu Dhabi-based Aabar Investments will invest around €200 million and take a 32 percent stake in Virgin Galactic's holding company, valuing the business at €640 million. The Middle East has already been touted a possible location for Virgin Galactic's next spaceport and the strategy is in line with the UAE capital's aim to become a world centre for scientific research. Given this latest announcement, it is even more crucial that Europe catches up - or it could find itself a loser in what has become the 21st century's space race.