Space Race - Bad Business Proposition

How bad was last week for the commercial space industry? Two prominent launch disasters—a Virgin Galactic test flight that killed a pilot and injured another, and a failed Orbital Sciences contract mission that destroyed a $266 million rocket and payload—have dampened a wave of optimism about the burgeoning industry.

Its pitiful that the space industry (American) is caught-up with the idea of contracting their core competence in the name of a wonder strategy. NASA to the world is known by its significant missions to Moon, Mars and several coveted and clandestine missions it had completed thus far with a remarkable strike ratio is actually out-sourcing its launches to SpaceX, Antares and the like, is in itself hard to believe.

The Virgin Galactic accident has attracted particular ire, because of the loss of life and the fact that its big-talking CEO, Sir Richard Branson, has long been hawking $250,000 tickets for tourist flights to space that always seem to be just around the corner. The accident inspired commenters to paint the company’s efforts as a sign of global inequality or simply not worth the sacrifice of a life.

But these criticisms get at a problem with Virgin Galactic, not the space industry at large: Branson’s company doesn’t have a real business plan beyond the vague talk of space tourism, and the spacecraft it built was hardly able to accomplish even that.

Virgin says it has sold perhaps $80 million worth of tickets to space, but that is far less than the $490 million invested in the project, mostly from Abu Dhabi’s sovereign wealth fund. The company has been reportedly looking to raise tens of millions more this summer.

But SpaceShipTwo, the rocket-plane designed by Virgin’s main contractor, Scaled Composites, to take people just above the 100 km altitude that roughly marks the border with space, has yet make it there—hence the decision to switch to a new fuel compound that promised more power in this last test.

Burt Rutan, the CEO of Scaled Composites, has been criticized for his cutting corners in his rocket designs while creating SpaceShipOne, the predecessor to the craft destroyed last week. In 2007, three employees were killed during an on-the-ground engine test, adding to concerns about the safety of the project. One reporter writing a book about Virgin Galactic became friendly with the pilots in the crash and says that some of her sources were concerned that the new engine was moving to flight testing too quickly.

Whether this contributed to the crash will become clearer when the National Transportation Safety Board releases its investigation in the coming year. For now, though, preliminary investigations are centered on SpaceShipTwo’s twin tail booms, which shift position as the craft descends to stabilize its return into orbit; they were apparently unlocked and deployed prematurely, just before SpaceShipTwo broke apart.

SpaceX, whose transition from vanity project to serious space firm we explored at length last month, has actually raised less private capital than Virgin Galactic, but was able to spend significantly more money developing its technology, thanks to a partnership with NASA to service the International Space Station. That also gave the company access to the space agency’s knowledge base and discipline. SpaceX also set its initial sights on the satellite launch market to establish a base of revenue, even as founder Elon Musk promises inter-planetary transport in the years to come.

Virgin Galactic, without revenue or even the capability to enter the satellite market until it proves it can reach low-earth orbit at the altitude of 300km, was in a somewhat desperate spot before the crash on Sunday. Now, it may be years before it can get off the ground again.

http://qz.com/290722/the-real-problem-behind-virgin-galactics-flight-test-disaster-is-bad-business/