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Space tourism prophets predict profits

Entrepreneurs gather in New Mexico to unveil their latest plans to send regular people to the edge of space — and project how long it will take to turn a profit.

Two years ago, SpaceShipOne's rocket flights proved that the private sector could put humans into space — and that private investors were willing to put millions of dollars into such feats.

But so far, only one craft has flown in space, sending test pilots to the final frontier at a expense of $25 million-plus to win the $10 million Ansari X Prize. When will the market prove that investors can actually make money on space tourism?

That was the key question hanging in the air as X Prize veterans and new entrants in the commercial space race gathered here Tuesday for the International Symposium for Personal Spaceflight. And the man who got the X Prize off the ground, Peter Diamandis, made a stab at an answer: three to five years.

Diamandis, who is chairman of the X Prize Foundation, pointed out that some space-related ventures that rely on passenger fares, such as Virginia-based Space Adventures, have already claimed profitability. And he said Zero Gravity Corp., the company he founded to offer airplane flights simulating weightlessness, was on track to turn a profit this year. He predicted that suborbital space ventures won't be that far behind.

"I think you'll see the first commercial flights in '08, two or three vehicles by '09. I think in 2012, you'll see real profits," Diamandis told "You didn't see Amazon or the Internet companies turn a real profit for three to five years. It's a very large capital investment. The most important milestone is when the first companies go public, and capital starts flowing into the market to fuel it. ... I think we could see that in three years' time."

For now, the space tourism market is largely financed by billionaires and millionaires —'s Jeff Bezos, the Virgin Group's Richard Branson, real-estate magnate Robert Bigelow and PayPal co-founder Elon Musk — plus like-minded "angel investors" who want to get in on the ground floor, so to speak.

Investments in "new space" ventures — including the ventures supported by angels and mega-angels, infrastructure projects backed by state and local funds, and initiatives spearheaded by NASA — already amount to $8 billion, according to a tally from Chuck Lauer, director of business development for Oklahoma-based Rocketplane Kistler.

Much of that money is being spent with the expectation that future customers will pay thousands or even millions of dollars for a ride to space. That might be a $200,000 suborbital trip to altitudes above 62 miles (100 kilometers) to see the black sky of space above a curving Earth — a zero-G jaunt similar to SpaceShipOne's flights. Or it might be a multimillion-dollar journey to orbital destinations such as the space station or Bigelow's inflatable modules.

The annual spaceflight symposium, held in conjunction with the Wirefly X Prize Cup rocket festival, serves as an opportunity for entrepreneurs to reveal their latest ambitions on the space tourism frontier. Among the revelations:

Dreamspace Group
  • The Canadian-based Da Vinci Project, which had been considered SpaceShipOne's closest competitor in the X Prize competition, is changing its focus from a balloon-launched ballistic rocket called Wild Fire to a sleek-looking rocket plane called the XF. Da Vinci team leader Brian Feeney said a new commercial venture, the DreamSpace Group, was being formed to pursue the space tourism market. A first-generation, one-person XF1 craft, modeled after Boeing's Bird of Prey experimental plane as well as the NASA X-36 prototype, could be flight-tested next year — with a two-person XF2 built in the 2009 time frame and a much larger XF3 to follow. Feeney told that some of the development money is coming from a Canadian tax rebate for the research and development work done on Wild Fire.
  • California-based XCOR Aerospace is working in the background on its next suborbital rocket plane, and "we're just shy a million dollars to put that vehicle in the air," said XCOR's chief executive officer, Jeff Greason. Two years ago, the Federal Aviation Administration gave XCOR a launch license for a suborbital test vehicle, but Greason told that the vehicle design has changed and that the company would likely seek a new FAA license. The rocket plane would represent a significant step in XCOR's plans to field a suborbital spaceship called the Xerus. In the meantime, XCOR is progressing with other space-related projects, including the development of a methane-fueled engine for NASA's Orion crew exploration vehicle.
  • British-based Starchaser Industries provided an update on its plans to develop a new line of unmanned suborbital launch vehicles based on its Storm rocket engine. That would eventually set the stage for a clustered-engine rocket capable of sending up space tourists, said chief executive officer Steve Bennett. He said Starchaser also was about to unveil Space Tourism magazine, a publication aimed at the general public rather than "space geeks."
  • British-based Virgin Galactic plans to begin offering suborbital passenger spaceflights in 2009, using technology scaled up from SpaceShipOne. Chief operating officer Alex Tai told the group that the company has a list of 65,000 would-be fliers from 121 countries, and has "$15 million of deposits sitting in the Virgin Galactic accounts," paid by scores of customers to reserve their seats.
  • Rocketplane Kistler's Chuck Lauer gave a nod to Virgin Galactic for setting the price point for suborbital spaceflights at $200,000. The company's Rocketplane XL craft is also scheduled to begin service in 2009, and Lauer suggested that suborbital craft could begin point-to-point flights soon afterward. For example, spacecraft could make jumps from Oklahoma to New Mexico to Mojave, Calif., and back. Virgin Galactic's Tai went even further, suggesting that future craft could zoom between New Mexico and Japan in just 45 minutes. "Chuck, if you can sell it to me, I'll buy it," Tai told Lauer.

Even further down the road, Tai said Virgin would like to get into the space hotel business.

Nevada-based Bigelow Aerospace may well be the company providing the infrastructure for that hotel. In fact, Lauer said transportation to Bigelow-built orbital destinations may well be a major driver for the rest of the personal spaceflight industry.

"Mr. Bigelow could be the largest buyer in the world within 10 years, maybe even within five years," Lauer said.

Of course, Lauer and his colleagues in the industry are far from objective commentators on the space tourism industry's prospects. David Livingston, a business consultant and professor who also covers the industry as a talk-radio host on "The Space Show," told that the hype can sometimes get overwhelming.

"You talk to people in the real world — they don't have any respect for this industry," he said.

Some studies have estimated the potential annual market for space tourism at more than $1 billion, but taking advantage of that market requires taking high risks and investing millions or billions of dollars. "If I went by business fundamentals, I'd have a hard time with a lot that's going on in this community," Livingston said.

However, he said the space tourism industry may have a "secret weapon" to draw upon: deep-pocketed entrepreneurs who have the money and the sheer will to turn space travel into a real business. Many of them, such as Blue Origin's Bezos and SpaceX's Musk, have already navigated their way through the ups and downs of the dot-com industry — and have made millions for investors in the process.

"These guys see only success, no matter what's in front of them," he said. "They're not normal businessmen and women. ... These guys don't understand defeat. I think you'd be a fool to bet against them."

Livingston predicted that there would be a shake-out in the marketplace, with less successful players quietly fading away. But he expected the survivors to turn a profit, and turn the final frontier into a true destination for tourists. And he predicted that it won't take all that long.

"All of this is going to unfold in two to four years," Livingston said. "So if you have a decent memory, you can hold me accountable for what I'm saying."