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Bezos, Branson and Musk are fighting over space bragging rights, but who's really paying for their trips?

"I want to thank every Amazon employee and every Amazon customer — because you guys paid for all this," said Blue Origin founder Jeff Bezos after his suborbital jaunt.
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Tech billionaires are jockeying over their jaunts into space — but who's really paying for their trips?

Billions in pandemic-fueled dollars enabled Blue Origin's suborbital trip Tuesday, the spaceflight company's founder, Jeff Bezos, acknowledged at a news conference.

"I want to thank every Amazon employee and every Amazon customer — because you guys paid for all this," Bezos, Amazon's founder and former CEO, said after the trip, which launched four civilians, including himself, into space on an 11-minute ride.

Bezos' fortune, which he uses to bankroll Blue Origin, grew by $86 billion during the coronavirus pandemic, making him the first person in modern history worth more than $200 billion, according to estimates by Forbes. Shares in Amazon and other companies that enabled "at-home" life and work during lockdowns — like Slack, Zoom and Peloton — boomed as remote work took off and home delivery of food and consumer goods shot up, propelling the fortunes of founders and executives.

Bezos has invested about $7.5 billion in Blue Origin since its founding in 2000, according to estimates, mostly through selling Amazon stock. He owns about 10 percent of the company and is the largest shareholder. From toilet paper to bananas to baby wipes, every Amazon package was another drop of fuel in the rocket's tank, another stitch in the spacesuits.

Image: Jeff Bezos' Blue Origin New Shepard Space Vehicle
Jeff Bezos walks near Blue Origin's New Shepard in Van Horn, Texas, after flying into space Tuesday.Joe Raedle / Getty Images

Bezos has said he believes pushing into space will help humanity solve some down-to-earth issues. It is important to "look to the future ... as a species and as a civilization," he told CNN this week. Working in space "will solve problems here on Earth," he said.

But while space travel is touted as a fix for the woes of this world, don't expect hundreds of passengers a year just yet. For now it remains limited to the billionaire boys' club.

"Space tourism will always be a niche business, in my view," Phil Smith, a space industry analyst for BryceTech, a space industry research and consultancy firm, said by email.

Space tourism could bring in about a billion dollars in total revenue over 10 years, based on current demand and research budgets, Smith said.

"The suborbital space tourism industry has started — this is Year One of this market," he said.

John Logsdon, a professor emeritus at George Washington University's Elliott School of International Affairs and the longtime director of the school's Space Policy Institute, said, "As the two firms gain experience, the price for a flight is likely to come down — but not to a point of widespread affordability."

Blue Origin has said it already has two paying passengers scheduled for later in the year; it hasn't disclosed their identities or the ticket prices. Bezos said that the service is already nearing $100 million in private sales and that demand is "very high."

Image: Richard Branson
Richard Branson weightless in space aboard the VSS Unity.Virgin Galactic

Rival Virgin Galactic, which sent its founder, Richard Branson, into the edges of outer space just nine days before Bezos, has already reported 600 active reservations, with each ticket selling for $200,000 to $250,000. Its first flights are scheduled to depart early next year. Elon Musk's SpaceX wants to take passengers on million-dollar moon rides and says it's shooting for 2024.

As with many things in tech, what may really be at stake are the data, lucrative government contracts and commercial applications.

Amazon and Blue Origin are separate companies with a common founder. And while sales of Amazon stock have funded Blue Origin, the e-commerce giant gets no direct financial benefit from the rocket trips.

However, they do give Amazon investors a new growth story to latch on to. That and the PR and the earned media publicity are some of the upsides. Amazon stock rose slightly Tuesday after Blue Origin's highly publicized trip.

The flights are essentially high-profile announcements that the companies are in the rocket business — and every flight provides data for the next flight.

"The whole point is to get practice," Bezos said at Tuesday's post-flight news conference. He said the rocket's liquid hydrogen fuel, the most powerful form of rocket fuel, was "overkill for space tourism."

Bezos also said Blue Origin is focusing on research and development for its heavy-duty New Glenn rockets, which, instead of carrying a handful of space gazers, can go orbital and carry payloads of up to 15 tons. According to Blue Origin's website, potential markets include "civil, commercial and national security customers."

Smith said: "Such launches represent, in effect, opportunities to gain experience regarding reusable space vehicles with an eye towards building reliable, efficient space transportation systems. The objective is for the commercial sector to reliably provide services to the public, as well as governments, from telecommunication and remote sensing to cargo and crew transportation."

The first New Glenn launch is scheduled for the last quarter of next year.