• 22 hours Are More Stock Splits On The Horizon In The Tech Sector?
  • 1 day How COVID-19 Could Change Elections Forever
  • 2 days Mexico Kickstarts War On Junk Food
  • 2 days How America Could Go Green Right Now
  • 3 days Russian Prestige And American Politics: The COVID Vaccine Race
  • 3 days Is The Silver Rally Over Or Just Getting Started?
  • 4 days Alibaba-Backed Tesla Competitor Set To IPO In The U.S.
  • 4 days Emerging Economies Could Get Left Behind In Race For COVID Vaccine
  • 5 days Dead Malls Could Be Amazon’s Next Target
  • 5 days Unpacking Biden's Energy Plan
  • 5 days Russia Aims To Become World's Top Gold Producer
  • 6 days Global Tech Stocks On Edge Over Trump TikTok Ban
  • 6 days Cobalt Squeeze Threatens The Electric Vehicle Boom
  • 7 days COVID Has Sparked A Surge In Cybercrime
  • 7 days Precious Metals Bulls Still Have Plenty Of Room To Run
  • 8 days The U.S. Has The Tech To Go Green, But Will It Use It?
  • 8 days Massive Losses Force Russian Commodities Giant To Slash Dividends
  • 9 days Markets Up On Stimulus Hope
  • 9 days UK To Invest In Europe's First Geothermal Lithium Recovery Plant
  • 10 days TikTok Takes Center Stage In US-China Tech War
Why Silicon Valley Is Moving To Toronto

Why Silicon Valley Is Moving To Toronto

Some of Silicon Valley’s biggest…

Human Energy: Debunking The Matrix

Human Energy: Debunking The Matrix

Hollywood has always been a…

  1. Home
  2. Tech
  3. Other

Bezos’ Space Flight Gamble

Space

Since Amazon CEO Jeff Bezos, the richest man in the world, announced last month that his Blue Origin company planned to start test flights with passengers very soon, with tickets going on sale next year. All the talk has been about price--and all the blowback has been about economic feasibility.

According to Reuters, Blue Origin now plans to charge passengers between $200,000 and $300,000 for its first trips into space, though Bezos hasn’t confirmed that independently.

And it’s easy to say that the ticket prices don’t really matter. After all, only the ultra-wealthy would have any designs of going on this expensive space ride. But wealthy or not, there still has to be enough demand for Blue Origin to turn a cosmic profit.

Everything’s more expensive at the launch, one might argue, and prices are bound to return to Earth.

Not everyone agrees with that sentiment, though. Teal Group aerospace analyst Marco Caceres told Reuters that each flight will cost Blue Origin up to $10 million, and they’re only taking six passengers per trip. So, if tickets go on sale for $200,000—those six passengers are getting a great deal.

Any way you slice it, that’s a massive loss that Bezos would have to subsidize himself.

In the meantime, if you haven’t seen the brochure, this is what $200,000 will buy you: Passengers will fly more than 62 miles above Earth, destination, suborbital space, complete with the amenities of weightlessness and a stellar view—for a few minutes. The return trip will be capsules and parachutes, and the entire voyage will last between an hour-and-a-half and two hours. Related: Chinese Police Bust $1.5B Crypto Gambling Scheme

The first passengers, though, are set to be employees of Blue Origin, according to Reuters.

Economically feasible or not, Bezos wants to make civilian space flight a niche in the “global space economy”, and he wants Blue Origin—which already has satellite services and government exploration projects worth over $300 billion a year—to lead the way.

He’s got a $150.1 billion net worth and the Buzz Aldrin Space Exploration award, but the first would run out pretty quickly at $10-million a flight, and the second is only wall decoration.

He’s also got some competition, namely from Richard Branson’s Virgin Galactic, which has already sold some 650 tickets at $250,000 for its own space voyages. And then there’s Elon Musk, who wants to colonize Mars.

So, there’s more pressure on price that one might think, and Virgin Galactic is also claiming it will start its space flights soon.

The first space tourists in 2000 went to the International Space Station (ISS), and they traveled 250 miles for tens of millions of dollars.

But the problem here is that no one can see the market—just like they couldn’t predict the rise of the Internet in its early days. That is precisely the Blue Origin gamble. Bezos is willing to subsidize it to some extent, vowing to sell $1 billion in Amazon stock every year to help Blue Origin be the first to commercialize space flight.

By Michael Kern for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment