Branson's giant leap

Sir Richard Branson's Virgin Galactic commercial space tourism service deserves to be taken seriously, not only because it strikes a chord with people raised on the romance of space, but because it makes financial sense.

There was a touch of the absurd about the grand unveiling of Sir Richard Branson’s tourist spacecraft in the Mojave desert of California earlier this week.

We gathered after dusk in a freezing wind to watch the Virgin Space Ship Enterprise (yes, really) trundle several hundred metres along a runway and come to a halt. It was named by Arnold Schwarzenegger and Bill Richardson, the governors of California and New Mexico, in front of 50 of the 300 pioneer astronauts who are paying up to $US200,000 each to reach sub-orbital space by 2011.

Later, one of the astronauts presented Sir Richard with a mock ray gun and the media and dignitaries drank vodka cocktails at the Absolut ice bar before being urged quickly to board their coaches back to Los Angeles. The wind was threatening to blow down the silver tents in which we stood.

Despite the physical evidence that Sir Richard truly is planning to carry his rich experience-seekers – as well as himself and his two children – 110 kilometres up in a private jet-like craft to see the curvature of the Earth and experience zero gravity, it felt more like a practical joke than a giant leap for mankind.

Yet, in its weird way, the Virgin Galactic service deserves to be taken seriously, not only because it strikes a chord with people brought up on the romance of space, but because it makes financial sense.

Whether so brief a thrill is worth so much money is moot, but there is a value to the over-strained US taxpayer in bringing some retail, private sector sensibility to a wholesale, public sector business. Sir Richard has made the windows on his "sexy beast” of a craft bigger to improve the pricey view.

The more that people pay privately to experience some of the thrills that only 500 or so astronauts have enjoyed, the greater the potential for NASA to hand over responsibility for sub-orbital and low Earth-orbit travel to the private sector and to focus on grander space projects.

At the moment, NASA is caught between repeating the achievable but by now routine task of ferrying astronauts to the International Space Station in the space shuttle to perform scientific experiments, and trying to develop the technology to put astronauts on Mars.

Americans will next year be confronted by the embarrassing reality that, with the end of the shuttle programme, US astronauts may well have to be taken up to the ISS in Soyuz spacecraft. Delays on NASA’s next-generation Ares rocket programme mean the US will lack its own transport until 2017.

Nearly $US14 billion has so far been invested in Ares and its Orion space capsule, which are over-designed for taking people and cargo into orbit. As Sir Richard puts it: "NASA has got a sexy brand name, but it spends billions and billions on projects that don’t need to cost billions.”

NASA is coming round to this view itself. A committee appointed by Barack Obama’s administration to review NASA’s planned programme found last month that NASA needed both to entice private investment and to have its budget increased by $US3 billion a year to meet its aims.

There is no prospect of the private sector being able to fund or operate space flights to Mars – the technical challenge is several orders of magnitude greater than buzzing up to look down at the Earth. Equally, however, there is little logic in NASA remaining an orbital taxi service with precious few passengers.

If nothing else, it makes sense to amortise the expense of developing rockets and spacecraft more widely. There is no reason why scientists should need NASA alone to haul them and their equipment into space.

Sir Richard has already shown how a crafty commercial operator can make his own capital stretch. The Virgin Galactic spacecraft is being built by Burt Rutan whose company, Scaled Composites, won the Ansari X Prize by flying to sub-orbital space and returning safely. Meanwhile, Virgin is using a high-rent version of Ryanair’s strategy of gaining funding from airports to which it flies. New Mexico is building a "spaceport” for the first Virgin Galactic flights while Abbar, an Abu Dhabi investment fund, has invested $US280 miilion for a 32 per cent stake and hosting rights.

Although the most visible, Virgin is not the only space enterprise to spot an opportunity. Blue Origin, a company founded by Jeff Bezos, the chief executive of Amazon, is working on a sub-orbital project; and NASA has signed a contract with SpaceX, founded by Elon Musk, to ferry cargo into orbit.

There is something alien about NASA relying on Sir Richard, Mr Musk and Mr Bezos for space transport. In the 1960s, it invested $US130 billionn (at today’s prices) in the Apollo programme without needing to use companies as more than program contractors.

But the US public finances are over-stretched and most Americans would prefer private sector involvement to hitching a lift with the Russians. The US has a natural edge over rival space powers in its risk-taking private sector: there are plenty of entrepreneurs and venture capitalists in California.

Some public-private division of US space investment will be needed if NASA is to fund a Mars programme, or even a return to the Moon. Such an investment approach is, although riskier in human terms, no different in principle from the US Post Office having awarded contracts to early private airlines in the 1920s.

If it takes American entrepreneurs and a British showman to keep the US space programme aloft for the 21st century, so be it.

Copyright The Financial Times Limited 2009

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