Everyone’s invited

The days of space being the preserve of governments are over. Private companies are ready to launch space tourism-and they have new frontiers in their sights.

Rituparna Chatterjee in San Francisco

To the heavens: XCOR’s Lynx (left) will take ‘tourists’ to the edge of
space in 30-45 minutes. Its ticket cost today: $95,000 per person

Two astronauts groove to hip-hop music as they take a joyride on a futuristic all-terrain vehicle (ATV) on what looks like a lunar surface. The delirious astronauts jump off and dance away as they collect their booty of precious minerals. As they head back to their spacemobile, they realise that naughty aliens have stolen the magical tyres of their vehicle, leaving them stranded in space.

Bridgestone’s hilarious Super Bowl commercial was cheered almost as much as the Pittsburgh football team, Steelers, which won Super Bowl XLIII. Today, the ad represents the fantasy of space fans. However, spacemobiles could be giving roller-coasters competition sooner than we think. One industry that has been seeing a lot of action—and we don’t mean bailouts, layoffs or shutdowns—is space.

We don’t even mean NASA and Apollo in the US or ISRO and Chandrayaan in India. In the US, private companies are taking off.

SpaceX has launched a rocket into space, XCOR is almost ready to give people a joyride to the edge of space.

Besides space tourism, private players are also eyeing business opportunities in cargo and crew transportation and satellite launches. By doing some of the things that NASA does at a significantly lower cost, they are promising to reshape the dynamics of the space market, even get NASA to shape up.

Space for all

A big step towards the democratisation of space flights was taken on September 28, 2008. Space Exploration Technologies (SpaceX), a US-based developer of rockets for space transportation, created history by launching the first privately developed liquid-fuelled rocket, Falcon 1, to orbit the earth. It did so after just three attempts in six years; usually, it could take more than 12 attempts for a vehicle to realise its mission completely. According to the company website, for customers wanting to send crew or cargo to space, a trip will cost $7.9 million on Falcon 1 and $36.7 million on its gigantic Falcon 9

SpaceX is headquartered, fittingly, at 1 Rocket Road, Hawthorne, a stone’s throw from Los Angeles. It was set up in 2002 by Elon Musk, the founder of PayPal (an electronic payment system), with pickings from his previous successful ventures. It also received an additional $20 million from the Founder’s Fund, a technology VC firm. Apart from that, SpaceX has been generating revenues from customers since 2003.

"SpaceX could do for space what Apple did for computers," says Jeffrey Foust, a senior space analyst at technology consulting firm, Futron Corporation. "Look at the computer industry. It started out with a bunch of mainframe computers made by IBM and others, but it grew because of ‘outside’ companies," he says.

  New frontiers: In September, SpaceX’s Falcon 1
became the first privately built liquid-fuelled rocket to
orbit the earth

In December 2008, SpaceX won a contract from NASA worth $1.6 billion for 12 flights to ferry cargo to the International Space Station (ISS) in outer space. According to the SpaceX website, NASA could order additional missions for a cumulative contract value of $3.1 billion. The crew living aboard the ISS depends on regular deliveries of air, water, food, fuel, research materials (like plants and rats), equipment, tools, etc. When the ageing Space Shuttle of NASA is retired in 2010, the US space agency will lose a principal means of ferrying cargo to the ISS. The next generation space shuttle being developed by NASA (Ares-Orion) will not enter service until 2015. Hence, the space agency has been approaching private players. According to NASA estimates, the ISS transportation and supply services market is worth $300-700 million a year.

At the space launch complex in Cape Canaveral, Florida, there is a sense of relief among the team members of SpaceX, who assembled the mighty, nine-engine, 180 ft-long Falcon 9 vertically on the launch pad on January 10.

The rocket parts had been shipped in trucks all the way from Hawthorne, and Falcon 9 is all set for its first flight later this year. Perched atop the launch vehicle is Dragon, the company’s crew and cargo carrying space capsule.

Less than a two-hour drive from Hawthorne is Mojave, where XCOR, another aerospace company, is building its own manned space vehicles. XCOR has different ambitions. Its petite but powerful Lynx plans to take people on a sub-orbital flight of 30-45 minutes to the edge of space (See pictures on left). So far, the manned rocket-powered aircraft has done 66 day runs, and commercial services are expected to begin in 2011. Only one passenger (the company refers to them as ‘participant’) can fly at a time in the Lynx. The participant sits next to the pilot in the fighter jet-style cockpit, and can see the blue earth below—XCOR calls it ‘the right stuff experience’.

XCOR’s website shows pictures of its first participant,

Once venture capital firms realise the potential of this industry, they will start putting money, perhaps in about two to three years Andrew NelsonChief Operating Officer, XCOR

Jeffrey foust

SpaceX could do for space what Apple did for computers. IBM’s mainframe systems came first, but ‘outside’ companies led the growth Jeffrey FoustSenior Space Industry Analyst, Futron Corporation

Per Wimmer from Denmark, beaming with his $95,000 ticket to space. XCOR hasn’t revealed the cost of building the Lynx, on which it has been doing the dry runs. However, its successor, Lynx Mark II, has a price tag of $20 million.

XCOR has been funded by angel investors, and from revenues earned by the company from government and commercial contracts and consulting services (contracts worth $20 million since 1999). The company is currently working on two additional US Air Force contracts and a contract with a major aerospace customer in areas like cryogenic pumps, new composite materials, reaction control systems and rocket engines. Andrew Nelson, Chief Operating Officer, XCOR, expects the company, which recorded revenues of $3.6 million in 2006, to become profitable in 2010. Further, XCOR expects net margins to approach 40% by 2013 and the company to earn an income of about $80 million by 2014.

Just down the street from XCOR’s headquarters in Mojave, Richard Branson’s Virgin Galactic is building its much-hyped rocketship, SpaceShipTwo. Billed as the world’s first ‘spaceline’ (like an airline), Virgin Galactic has been selling space tickets since 2005 for $200,000 each. Safety tests are still on, and nobody knows when it will launch its maiden booked flight.

Although the private planes haven’t left the hangars yet, passengers are queuing up for a space ride. According to a Futron survey, in 2021, the projected demand—from those who can afford it—is 13,000 passengers and annual revenues from sub-orbital space tourism are predicted to touch $676 million. Although the tickets would be priced high for the first three years, they are expected to fall to $50,000 per passenger by 2021.

Deep impact

Wired Blog Network. Now, private companies could make it happen. "We’re not going to see governments stop doing space altogether, but private companies will account for the majority of space activity, probably within 10 years," Elon Musk, SpaceX Founder, CEO and CTO, said in a Time article.

Peter H diamandis

NASA exists to research and explore, its job is not to make money. It’s up to the private sector to capitalise and become more efficient
Peter H Diamandis Chairman, X PRIZE Foundation

Elon musk

Making progress toward extending
life beyond Earth, to other local planets,
is my overarching goal Elon Musk Founder, CEO and CTO, SpaceX

"Space is being democratised," says Nelson. The implications of opening up space will be the same as the opening up of any industry. It will foster competition, offer better services and force government organisations to pull up their socks. "For as long as I’ve been in this game—20 years—the military has said they’re going to cut launch costs in half. It’s never happened," wrote Theresa Hitchens, who looks at space issues for the Centre for Defense Information, in an article in

Says Nelson of XCOR: "No place has been visited less than space. Throughout our history as a species, less than 500 people have ever visited space." Today, companies like Virgin Galactic and XCOR are bringing space travel within the reach of the affluent by building cheaper space vehicles.

A single flight by NASA’s Space Shuttle costs $500 million, and it’s discarded after a single use. By comparison, XCOR’s reusable vehicles can make over 5,000 sub-orbital flights at the same price. "This doesn’t mean NASA is being wasteful. For NASA, space flight is an urgent national priority," says Nelson.

"NASA exists to research and explore, its job is not to make money in space. It’s up to the private sector to capitalise and become more efficient," adds Peter H Diamandis, Chairman and CEO of the X PRIZE Foundation, which promotes breakthrough technologies in exploration, energy, education and environment. In 2004, the organisation awarded the $10 million Ansari X PRIZE to the first private organisation to launch a reusable manned spacecraft into space twice within two weeks. Scaled Composites won the prize for its SpaceShipOne; incidentally, its designer, Burt Rutan, is now designing vehicles for Virgin Galactic.

As a private company, SpaceX is more efficient than government organisations. It can cut the red tape and launch satellites for less than half the cost and time. SpaceX has enough clients queuing up until 2015, for satellite launches and other transportation services. This year, it will launch satellites for a host of international clients such as ATSB of Malaysia, MDA Corp of Canada, Avanti Communications of UK and, of course, NASA.

All this will need money. The economic crisis has made venture capitalists cautious. However, says XCOR’s Nelson: "Once VCs realise the potential of this industry, they will start putting money, perhaps in about two to three years." Even recession seems to not have much of an impact. While most of America is cutting staff, SpaceX plans to hire about 1,000 workers by 2011, according to a FloridaToday.com article. XCOR too says that it has "significant customer demand" in space tourism, vehicle sales and equipment sales.

A giant leap

The boundaries of private aerospace need not be limited just within the US. Space

Richard branson

     Joyride: Richard Branson has been selling tickets
     to Space since 2005 for $200,000 each

tourists would, of course, come from all over the world. But there is also ample scope for partnerships with government space organisations of other nations. XCOR has collaborated with NASA on a range of projects. It has developed a new composite material that is suitable for making stronger and lighter tanks for liquid oxygen and other cryogenic fuels. There’s no reason why the collaborating partner cannot be ISRO, China National Space Administration (CNSA) or somebody else.

Similarly, XCOR’s Lynx can be bought by universities, corporations and even governments for research or for commercial purposes. "Under appropriate agreements, the Lynx could offer many countries the possibility of starting their own manned space programme," says an XCOR spokesperson.

Musk of SpaceX is looking even beyond, wanting people to retire to his space colony on Mars, instead of buying property on Earth. "Making progress toward extending life beyond Earth is my overarching goal," he says. One cannot laugh him off. Musk is a modern day Midas. He founded PayPal, and is the Chairman of Tesla Motors and Solar City—all revolutionary companies that changed industries. "Three things will have the biggest impact on our lives in the future: the Internet, transition to a sustainable energy economy, and, in particular, space exploration—the extension of human life to local planets," he says.

"In the long run, open, feasible and low-cost space access can create possibilities we can’t even dream of today," says Foust. But most importantly, aerospace players could give mankind an access to minerals, solar energy, real estate and pretty much all that we hold precious here on Earth. "Also, space offers a place to keep the species and knowledge alive in case the worst should happen to Earth," says Diamandis of X PRIZE Foundation thoughtfully. However, right now, as humans continue to thrive, we now have one more dream to live for—a trip to space.