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To infinity and beyond: Investing in space travel

It’s no secret that the global economy is in trouble, so if you’re bored of the world of stocks and bonds and feel the tedium of a slowing market, the time may have come to explore a whole new world of investment: space travel.
/ Source: CNBC.com

It’s no secret that the global economy is in trouble, so if you’re bored of the world of stocks and bonds and feel the tedium of a slowing market, the time may have come to explore a whole new world of investment: space travel.

In a few years, passenger travel into the world beyond our own will be a reality, and as the lucrative possibilities for commercial trips into the galaxy continue to grow, now might be the time to leave the rat race and join the new and much more exciting space race, according to some space travel enthusiasts.

"Our mission is to start taking people to space commercially from the beginning of 2014," co—founder of Space Expedition Curacao Michiel Mol told CNBC. "We can take people to space in a small rocket ship, with one passenger and one pilot. It takes off like a conventional airplane and then goes straight up into the air and reaches space within four minutes."

"It’s a spaceship built by a company called XCor. It flies on jet fuel so we can land, refuel and go again; we have four flights a day with one spaceship," he said.

Mol’s company is already working in partnership with major commercial airlines, like Dutch carrier KLM. "KLM has the same vision as we have: in 20—25 years from now the next successor of our spaceship will be able to take you from London to Sydney within two hours," Mol said.

Co-founder of another pioneering space travel company ZeroInfinity, Jose Mariano Lopez—Urdiales, was also confident of success. "We go where the sky is black and the earth is blue," he said.

The company’s approach is to use new green technologies to send up helium balloons supporting pods with four passengers each into space. And with around 20 million euros ($26 million) of investment needed, it is a fraction of the cost of a space shuttle launch which costs around $1 billion.

It is a sector aimed at high-net worth individuals, led at present by Richard Branson’s Virgin Galactic which has sold 430 tickets to space at a cost of $200,000 each. SXC has sold over 50 tickets for a much reduced $95,000 each and in third place is Bloon, whose tickets have not yet gone on sale but will start at around $145,000.

Despite these high prices, the industry is already starting to take off, and Mol was optimistic: "If everything goes to plan the company is profitable this year already," he said. Lopez—Urdiales also foresaw soaring profits: "From 100 flights we can start to break even which is incredibly early for such a system."

Space Global Index
For the prospective investor, gaining access means investing in a company, as there are currently no funds. The new Space Global Index could help shed light on the sector.

"It's really pioneering so there are not that many companies involved yet but the number will grow," said Mol.

But with such massive costs and as yet untested ventures into space, are the fundamentals there to secure a real investment, or is it all just hot air?

CEO of iBundle and DADapp.com, Julian Ranger, told CNBC that the move to space was inevitable. "There is quite a move to space. The moon is the next place we are going to go basically for resources and experiments," he said.

"Therefore you need to actually understand the conditions on the moon … and there is a little bit of entertainment money that we can get as well."

He explained how private companies can work in conjunction with major space exploration programs to make significant profits. NASA will pay upfront the $100 million needed for his company’s trip to the moon, in exchange for help with a water exploration project. Once on the moon, the company is then free to take contracts from any group interested in space exploration, allowing for gains of over $170 million — a $70 million dollar profit after costs.

And with cost-cutting exercises slashing government budgets, the opportunities for private companies to get in on the action are growing.

"If you go back to the early 2000s, NASA had a plan for eight lunar exploration missions at $1 billion each," Ranger continued. "We are doing this for sub $100 million, so we can really dramatically save for them."

"And then we open up—there are a lot of other commercial entities that want to do low gravity experimental research, other experiments from the moon because of its unique characteristics. So we can meet both sets of requirements very cheaply, and therefore make quite a large profit," he said.

Ranger said that although major government agencies have budgets that far exceed anything a private company could muster, the know-how is there to keep costs low—private businesses can book rockets for far less than the cost of developing them themselves, and also essentially streamline what would otherwise be more bureaucratic processes.

"You can do this with low cost now, with the materials, the understanding … so we can definitely do it," he said.

But it’s not all business for Ranger, who’ll be racing robots to the moon in Google’s multi-million dollar project 'The Lunar X Space Race.' He also has his ticket booked on a Virgin Galactic flight for next year. So, along with an investment to really boost your portfolio, just think what space travel could do you for your frequent flyer miles!

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