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 on Tuesday, the spaceflight company’s founder Jeff Bezos acknowledged at a press conference.
“I want to thank every Amazon employee and every Amazon customer — because you guys paid for all this,” Bezos, also Amazon’s founder and former CEO, said after the trip, which launched four civilians into space on an 11-minute ride.
Bezos’ personal fortune, which he uses to bankroll Blue Origin, grew by $86 billion during the pandemic, making him the first person in modern history worth more than $200 billion, according to estimates from Forbes. Shares in Amazon and other companies that enabled “at-home” life and work during the lockdown — 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 company founders and executives.
Bezos has personally 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 space suits.
Bezos has said he believes that 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 part of the billionaire boys’ club.
“Space tourism will always be a niche business, in my view,” Phil Smith, a space industry analyst for BryceTech space industry research and consultancy firm, told NBC News via email.
Space tourism could bring in about a billion dollars in revenue in total over 10 years, based on current demand and research budgets, Smith estimated.
“The suborbital space tourism industry has started — this is Year One of this market,” he said.
John Logsdon, 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 2021, though it hasn’t disclosed their identities or the ticket prices. But Bezos said that the service is already nearing $100 million in private sales and demand is “very high.”
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 between $200,000 and $250,000. Its first flights are scheduled to depart in early 2022. Elon Musk’s SpaceX wants to take passengers on million-dollar moon rides, and says it’s shooting for 2024.
“Space tourism will always be a niche business.”
As with many things in tech, what may be really at stake is the data, and lucrative government contracts and commercial applications.
Amazon and Blue Origin are completely separate companies, with a common founder. And, while sales of Amazon stock have funded Blue Origin, the e-commerce giant receives no direct financial benefit from the rocket trips.
However, it does give Amazon investors a new growth story to latch onto. That, plus the PR and earned media publicity are some of the upsides. Amazon stock rose slightly on Tuesday after Blue Origin’s successful — and highly publicized — trip.
The flights are essentially high-profile announcements that these 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 press conference. He noted that 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 the company’s 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.”
“Such launches represent, in effect, opportunities to gain experience regarding reusable space vehicles with an eye towards building reliable, efficient space transportation systems,” Smith said. “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 2022.