Miércoles 12 de Abril de 2006, Ip nº 148

Ride Space Rocket, Don't Invest
Por Joanna Glasner

If ever there was an industry that defined the concept of high-risk venture, space tourism would be it.

Newly minted spacecrafts with minimal track records for carrying a human payload. The customer base limited to very rich people willing to risk their lives for a few minutes' adventure. A business proposition so novel not even the insurance industry has quite figured out how to underwrite it.

Offsetting the perils is a tempting proposition: A chance to view Earth from space, to experience weightlessness, and to live through the kind of transforming experience usually reserved for astronauts.

Perhaps the risk-reward ratio explains why the main backers of space travel ventures to date are billionaires or near-billionaires with the ability to lose huge sums and still be rich.

The first suborbital space-tourism ventures are set to launch in the next two years, but investment opportunities for non-billionaires are limited. At this stage in the industry's development, experts say, that's probably a good thing.

"There's an old joke if you want to be a space millionaire, start with a billion," said Rick Tumlinson, co-founder of the Space Frontier Foundation, which advocates human settlement in space. Typically, he says, space entrepreneurs and investors are motivated more by a desire to pioneer than to profit.

That could change. If trendsetters like Virgin Galactic and Rocketplane pull off plans to lauch paying passengers into space, suborbital tourism may yet prove a viable business. But it has a long way to go. Here's a look at what's been accomplished so far and what space tourism needs to get off the ground.

Timeline: Public space travel became a reality in 2001 when American businessman Dennis Tito paid a reported $20 million (Tumlinson, who signed him up, claims it was really closer to $14 million) to fly to space. He was launched on a Russian Soyuz spacecraft, which docked with the International Space Station.

For all the publicity Tito's adventure received, it hardly created a surge in recreational space travel. The number of people with both the enthusiasm and deep pockets required for such a venture remains miniscule.

To date, two space station tourists -- South African Mark Shuttleworth and American Greg Olsen, have ventured to space. Another, Daisuke Enomoto of Japan, is slated to go in September.

Going forward, space-travel entrepreneurs envision two principal scenarios for public space treks. One is orbital travel, which involves an extended stay in low Earth orbit, such as Tito's venture. The other is suborbital travel, which involves short excursions beyond Earth's atmosphere and back.

The projected price of a suborbital flight is a small fraction of the price of orbital travel, and puts space tourism within the financial means of a much larger audience. For a starting price of around $100,000 to $200,000 passengers will undergo training and take a flight culminating in the weightless atmosphere of space.

Early entrants: Several private companies are already accepting reservations for suborbital trips.

In 2008, Virgin Galactic, a company established by British tycoon Richard Branson's Virgin Group, plans to offer $200,000 trips on privately built spaceships. The crafts are modeled on SpaceShipOne, the vehicle developed by aerospace pioneer Burt Rutan that won the Ansari Xprize race to launch the first privately built, human-piloted spacecraft.

Rocketplane, based in Oklahoma City, is accepting reservations for $200,000 tickets for suborbital flights expected to take off late next year.

Around 2009, Space Adventures, plans to begin shuttling passengers 100 kilometers (62 miles) into space. Tickets are $102,000. The company is also selling two seats for $100 million each for expeditions to the far side of the moon.

For suborbital passengers, the draw isn't the duration of the flights, which will last a few hours and include just minutes of weightless, said George Whitesides, executive director of the National Space Society. Rather, it's the transformational experience of the "overview effect" of seeing the planet from afar.

"For me it's the idea that you're able to partake of this experience that only a microscopic fraction of humanity has had," said Whitesides, who's reserved two tickets on Virgin Galactic.

Old space, meet new space: When most investors think of aerospace, their first associations are blue chip stocks like Boeing and Lockheed Martin. Tumlinson calls those companies "old space."

Some of their defining attributes are a lengthy operational history, tens of thousands of employees and a revenue base heavily tied to government contracts. Also, they were not founded by people who made their fortune in a dot-com startup.

The new-space category includes companies like SpaceX, a launch-vehicle maker backed by PayPal founder Elon Musk, Blue Origin, the spacecraft developer funded by Amazon's Jeff Bezos, and Bigelow Aerospace, a developer of commercial space habitats launched by hotel entrepreneur Robert Bigelow. Another key player is Microsoft co-founder Paul Allen, who funded SpaceShipOne.

With the exception of a few microcap stocks like SpaceDev, few new-space companies are publicly traded. If they were, their securities filings would contain some interesting long-term goals.

"They come from a philosophy of human settlement beyond the earth," said Tumlinson. He attributes the large presence of tech entrepreneurs in space tourism to the fact that most were probably geeks and science-fiction fans in high school, growing up in a time when space exploration -- from the shuttle program to Star Wars -- was a dominant theme in popular culture.

Is there a market? If a suborbital trip were to cost $25,000, how many people would sign up? Of those who could easily afford a ticket, just over half would be very interested in going, according to a survey commissioned in 2002 by research firm Futron. Survey results indicated that more than 15,000 suborbital passengers could be flying annually by 2021. The firm's conservative estimate was that by that time, space tourism could produce inflation-adjusted annual revenue of about $700 million.

The Federal Aviation Administration's Office of Commercial Space Transportation had a similar estimate in a February report saying recent studies have shown public space travel could become a billion-dollar industry within 20 years. Public space travel, the report said, may also provide the initial market for suborbital vehicles used for other purposes, including microgravity research, remote sensing and fast package delivery.

On the tourism front, Jeff Foust, a launch industry analyst with Futron, doesn't expect to see investment opportunities open up for a few years.

"The market needs to mature a little more," he said. "Because the capital costs are pretty high, it makes it difficult to get the attention of venture capitalists who are still trying to figure it out. Is this a real market? Is this a real business?"


  04/04/2006. Wired Magazine.