Is Jeff Bezos’ Blue Origin Really Making Money From The New...

Is Jeff Bezos’ Blue Origin Really Making Money From The New...
Is Jeff Bezos’ Blue Origin Really Making Money From The New...

A big objection to the space business is that nobody makes money from it. It is a good objection!

Government companies and satellite television stations and their supply chains do well in the current ecosystem. However, we’re still waiting to see if space companies with ambitions to serve a different customer base – your Virgin Galactics, your planets, your made-in-spaces, your momentuses – can thrive as profitable businesses.

It was noteworthy, for example, that CEO Bob Smith called the program profitable after Blue Origin’s reusable New Shepard rocket completed its thirteenth mission on October 14, flew 105 km to the edge of space and returned safely to Earth. “We make money with every flight,” he said.

Erika Wagner, Payload Sales Director at Blue Origin, told Quartz that in 2019 the company decided to use the vehicle that was launched this week for cargo flights. “We had 10 consecutive flights with payloads on board, flown over 100 payloads in total and paid customer payloads on every flight,” Wagner told Quartz. “We have customers who have booked flights for the next few years and we fill out these manifestos quickly.”

Could Blue really fly this cargo profitably?

The company didn’t want to talk specifically about the economy, but we can make an educated guess. Scientists are willing to pay decent to bring research payloads into a microgravity environment. For that flight, NASA paid Blue Origin approximately $ 700,000 to test the lunar landing technology, along with eleven other research payloads.

In the past, the company has stated that one of its full-size research payload cabinets costs between $ 50,000 and $ 120,000, although smaller rooms are available for as little as $ 8,000. Since we don’t know all the details, let’s put the $ 1 million in revenue for this ballpark start.

How much does it cost to fly the New Shepard once? Again we are reduced to well-founded rates. One metric is the estimated cost-per-flight cost of Virgin Galactic’s Space Ship Two rocket aircraft, an entirely different vehicle with similar capabilities that stood at around $ 430,000 in the company’s 2019 prospectus. Both vehicles are reusable so the marginal cost is due to propellants (pretty cheap). the team of technicians, engineers, and other support staff (Blue says it takes “less than 26 people” in the control room); and whatever pre and post flight inspections and renovations need to be done (unknown area).

So it’s believable that the New Shepard made a profit, maybe a big one, on this single flight. But Please note:Much of the income here came from the government. More importantly, given the hundreds of millions of dollars Blue Origin founder Jeff Bezos spent developing the New Shepard, the vehicle is likely only as a pilot for the company’s upcoming New Glenn rocket and for more lucrative ones Engine building work makes sense.

Or maybe when it starts to fly people. Blue Origin hasn’t said how much New Shepard passenger tickets will cost, but Virgin Galactic is charging $ 250,000 per seat. At that rate, a launch from New Shepard could earn $ 1.5 million per flight.

However, the lingering secret of New Shepard, which was originally billed as a space tourism project, is why, after thirteen apparently successful test flights, it has yet to put a person into space. Blue didn’t want to talk about the development program in detail, rumor has it that it will see its first human passenger in 2021, but Wagner said that “all flights in our program were part of the review process and were practicing operations for the first human flight. ”

The future of Blue Origin and Virgin Galactic will likely include aviation research and researchers: yesterday, Virgin Galactic announced that Alan Stern, a planetary scientist, would be the first to fly $ 450,000-650,000 alongside his experiments on a NASA-funded mission. That flight is unlikely to take place until after the company made its first voyage into space from its new headquarters in New Mexico sometime later this year.

That means 2021 could see actual competition between two different space tourism companies, much closer to space tickets, which are cheap enough to be able to afford without the NASA bill.

A version of this story originally appeared in the Quartz Space Business Newsletter.

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