Bezos Back in Space: Did New Mexico Bet on the Wrong Billionaire?
Failure to launch at 'Spaceport America'
It’s happened again.
Tuesday morning, Blue Origin launched New Shepard beyond the Kármán line, which the Fédération Aéronautique Internationale recognizes as the boundary separating the atmosphere from space. It was the company’s 10th trip past the mark.
Meanwhile, Virgin Galactic has yet to make it to space a single time.
In the race to develop the knowledge, experience, and infrastructure send tourists on suborbital journeys, one thing is clear: Blue Origin is soundly beating Virgin Galactic. That is a bitter reality for taxpayers, who at the local, state, and federal levels, have been made to spend well over $200 million on “Spaceport America.” The facility, which bills itself as the “first purpose-built spaceport,” is located in New Mexico’s remote and rural Sierra County. British billionaire Richard Branson “christened” it, in a dedication ceremony held almost exactly nine years ago. But to date, Virgin Galactic has conducted all of its powered tests from California’s Mohave Air and Space Port. The company claims that it will launch a crewed flight from New Mexico as soon as October 22nd, but missed deadlines are common for the firm. Its vehicles are based on a proof-of-concept project that crossed the Kármán line -- twice -- 16 years ago.
Blue Origin’s story is much different. Over the last five and a half years, at its private facility in western Texas, it has made slow but steady progress. (See chart below.) Unlike Virgin Galactic, it has not suffered from fatal accidents. Its vehicle has a significantly simpler design, and thus poses less safety risk to customers.
As a privately held enterprise, Blue Origin’s financial are unavailable. But Virgin Galactic, which went public late last year, is legally obligated to make filings with the U.S. Securities and Exchange Commission. In its inaugural annual report, the company admitted that it lost a total of $487.2 million in 2017, 2018, and 2019.
If the economy were strong, Branson might have tapped his billions to bail the company out. But in May, his “Virgin Group was forced to relinquish control of Virgin Galactic to raise hundreds of millions of dollars to fund other group companies.” Investors remain divided on the future. Shares soared to more than $37 just before the imposition of COVID-19 lockdowns, but then crashed below $11, and have hovered between $16 and $20 over the last two months. (Legendary stock picker Jim Cramer’s assessment: “I don’t see anything in the short term that tells me that one is a winner.”)
The “commercial spaceflight industry,” Virgin Galactic admits, “is still developing and evolving,” and the company believes that it will “be highly competitive.” New Mexico gambled, big, on one competitor. So far, it’s proven to a be a sucker’s bet.