Virgin Galactic boldly goes into small satellites, telling future astronauts 'you have to wait'

Following a fatal accident during a test launch last year, Sir Richard Branson's space tourism business is focusing on a burgeoning new market

An artist’s impression of Virgin Galactic's SpaceShipTwo

'That’s funny, I’ve never been asked that before,” quips Virgin Galactic boss George Whitesides. The question: when will Virgin Galactic fly its space tourists into space? The answer, remarkably, is the company has no idea.

“It’ll be ready when it’s ready,” says Whitesides. “I’m hesitant to give specifics on a range of time.”

This is a rare audience with Whitesides, 41, who is sitting in the conference room at Virgin Galactic’s brand new facility in Long Beach, California. The company moved in four months ago, so the building looks more like an empty warehouse than a hi-tech manufacturing site.

Virgin Galactic isn’t inviting journalists in for a look; it’s playing host to nine companies from the UK’s small satellite industry as part of the Space Mission, organised by UK Trade & Investment and Innovate UK, and The Telegraph has been granted access, almost by accident.

It’s been 10 months since a fatal Virgin Galactic test flight ended in disaster in the Mojave Desert, killing pilot Michael Alsbury.

Debris at the crash site in California

The 39-year-old died after inadvertently unlocking the spaceship’s braking mechanism 14 seconds too early, causing catastrophic structural failure, according to a report by the National Transportation Safety Board. The tragedy almost threatened to derail Virgin’s plans to conquer space.

Before the crash in November last year, there were around 750 “future astronauts” signed up to Virgin Galactic’s space programme, paying $250,000 (£160,000) a pop for a seat on a spacecraft – SpaceShipTwo – that can reach the edge of space at an altitude of 62 miles before returning to earth.

Numbers have already fallen to 700. These steadfast customers, believed to include high-profile ticket holders Ashton Kutcher, Angelina Jolie, Kate Winslet and Stephen Hawking, represent $175m in revenue.

Whitesides, a former chief of staff for Nasa, is in a difficult position: it is necessary to keep his future astronauts sweet but with no date for the first space tourism mission, and investors to mollify, there needs to be a short-term moneyspinner or Virgin Galactic will run aground.

His answer has been to pivot its business model dramatically away from human space travel, and into a burgeoning new sector: small satellite launches. This is why Virgin Galactic has rolled out the welcome mat for the UK firms – they are potential customers, partners and advocates.

George Whitesides, Virgin Galactic CEO, at the new LauncherOne facility

Small satellites (weighing less than 500kg) are capable of sending detailed data on everything from solar weather to earth imaging to weather prediction back to Earth. The small satellite industry has grown sixfold in five years. In the first half of 2015 alone, $1.17bn was invested through 21 deals, according to CB Insights.

“We are the Uber of small launch”
AC Charania, director of strategy at Virgin Galactic

AC Charania, director of strategy and business development at Virgin Galactic, is bullish with his pitch to the visitors: “We are the Uber of small launch,” he claims.

On established national launch ranges, such as Cape Canaveral or the Vandenberg Air Force Base, small satellite, cubesat and pocketqube customers are secondary customers – they find out when a rocket is launching with a major project and send up their satellites – sometimes as light as a single kilogram – alongside the main mission.

“You can’t tell the big rocket where to go and you can’t tell it when to go,” says Charania. “You essentially have to get on a bus.

“With Uber, you go when you want to go, you pick the service you want – UberX or UberXL, it goes exactly where you want and it’s an easy transaction. That’s essentially the model for us.”

This programme is called LauncherOne, a two-stage rocket that is fired at an altitude of 50,000 feet from White Knight Two – the same cargo plane that will be used to shuttle space tourists into near-space. For less than $10m, you can launch a single satellite or combination of satellites with varying payloads into orbit.

This service compares to Pegasus, Virgin Galactic’s rival in the satellite launch market. “Nasa is the only real customer for Pegasus,” claims Whitesides. “It typically buys a Pegasus once every two years at a price of around $50m for a payload in the order of magnitude of 250kg. We offer the same payload at a fifth of the cost.”

Other start-ups entering the industry make similar claims. New Zealand-based Rocket Lab’s flagship engine, Electron, is designed to send payloads of 100kg into space for just $4.9m, while Texan outfit Firefly Space Systems claims that it will offer “the lowest launch cost in its class”.

Whitesides pooh-poohs the idea that these new outfits will undercut his rates: “It’s easy to say that you’ll charge a price for a product before a product is built. We have assembled a group of people that have built rockets in the recent past and what we will offer will be unprecedented in terms of cost and access.”

Unlike SpaceShipTwo, which has been designed in partnership with Scaled Composites, LauncherOne belongs exclusively to Virgin Galactic and could prove an intellectual property goldmine.

“This is just as important an endeavour for the company as the SpaceShipTwo efforts,” says Charania.

The small satellite and cubesat industry is growing apace, with several hundred projects currently going on around the world. “We’ve signed agreements with some of these entities,” he claims. “There’s a lot of activity going on – people are even looking at getting these small formfactors [cubesats] to the Moon or to Mars or to asteroids.”

Virgin Galactic is planning to send up “many” rockets a year, it says, limiting the waiting period for commercial customers to a matter of months, instead of the current two-year delay. The new facility is being equipped with the technology to make rockets “at volume”.

Virgin Galactic is running three shifts a day to get SpaceShipTwo finished

Virgin Galactic has already signed up one high-profile customer. It is to provide 39 launches for OneWeb, which is the primary rival to SpaceX, the Californian space transport company founded by billionaire Elon Musk.

The company is planning to launch a constellation of 648 satellites to provide fast internet access across the globe, focusing on areas with low or negligible connections.

What does Virgin Galactic’s founder, Sir Richard Branson, make of the shift? The billionaire has been single-minded about his desire to get people into space, and only last month tweeted that he was “confident” the company “would make progress” on that front.

To date, Virgin Galactic hasn’t actually completed a single flight

He, too, is throwing his weight behind the satellite sector, including investing in OneWeb as part of a $500m fundraising in June. Both Whitesides and Charania are keen to stress that Virgin Galactic’s new focus on satellite launch has Branson’s blessing.

There have been a series of disappointments for the serial entrepreneur. When he launched Virgin Galactic in 2004, he made the bold promise that the first astronauts would be sent into space by 2007. Before the accident, he said that the first space tourism flights would begin in the spring of 2015.

To date, Virgin Galactic hasn’t actually completed a single flight.

In January of this year, Branson himself cast doubt on the company’s future, writing on his blog, “I found myself seriously questioning for the first time whether in fact it was right to be backing the development of something that could result in such tragic circumstances.

“In short, was Virgin Galactic and everything it has stood for and dreamt of achieving really worth it?”

Terminating the Virgin Galactic project would have far-reaching consequences. In 2009, the company received $280m of funding from Aabar Investments, which is owned by the Abu Dhabi government, in return for a 32pc stake in the business. This also bought exclusive rights to host Virgin Galactic flights in the region and a future Abu Dhabi spaceport.

Then there’s Spaceport America, the New Mexico facility that has now been completed after eight years. The state, which is sparsely populated and among the poorest in the country, bet big on Virgin Galactic bringing much needed revenue to the area.

Spaceport America is the world’s first commercial space airport

At Nasa, Whitesides witnessed first-hand the power of space launches to attract huge numbers. “About 1m people would come out for every shuttle launch,” he says. “Think about the economic effect of 1m people staying for a few days, it’s quite substantial.”

The New Mexico spaceport is now being used as a blueprint for the UK Government’s spaceport programme. British-born Firth, who has been with Virgin Galactic since its inception in 2004, was cagey on the details of the partnership, but revealed: “There’s a been a team come out a few times from UK over last 18 months.”

The UK Space Agency has narrowed its shortlist for a UK spaceport to Campbeltown, Glasgow Prestwick and Stornoway in Scotland, Newquay in England and Llanbedr in Wales. The Government has said that a UK spaceport will be open by 2018.

Virgin Galactic is an obvious partner because its operations are inherently Anglo-American; it employs 400 people in the States and about a dozen here. The spaceport will also have two areas of focus: launching fare-paying passengers into sub-orbital space and sending satellites into orbit, much like Virgin Galactic’s model.

A spokesman for the UK space agency would not confirm that Virgin Galactic was a key partner, saying only that the organisation was “talking to various operators”.

And while Virgin Galactic is going into satellite launch more boldly than before, human spaceflight is still on the menu. SpaceShipTwo will be completed by the end of the year. Whitesides says: “We’ve got several hundred people working on that, running three shifts a week to finish that up.” he says.

He is keen to stress that despite rivals nipping at Virgin Galactic’s heels, the 10-year-old company remains the best bet for ordinary people to get into space in their current lifetime.

“Over the last 50 years, just 500 people have gone into space,” says Whitesides. “We have many more than that number signed up with us and aspirations to have significantly more fly than that over the coming years.

“This will be a step-change in terms of humanity’s relationship with space. We will go from a time when very few people know an astronaut to a time when many people know an astronaut.”

With the Mojave testing facility just two hours north of Virgin Galactic’s new HQ, the company claims that it couldn’t be easier to test and refine its technology.

It’s this that gives Whitesides the confidence to hang on to a single powerful – if tenuous - promise: “We’re still closer to that goal of flying people [to space] than anyone else.”