The Race For Space

How space tourism and supersonic travel are generating demand for Earth's orbit.

“When, in the fifteenth century, some audacious mariners who had sailed from Europe discovered America, nothing seemed to justify such a venture in the eyes of their contemporaries. Today, however, we can see it has given birth to the twentieth-century United States. Don't you think the existence of the United States constitutes a valid reason for Columbus's wild scheme...”

Pierre Boulle, Garden on the Moon

As the magisterial glimmer of SpaceX’s manned mission receded into the night, the entire world drew a bated breath. A new space race has been brewing for years, but the SpaceX team changed the game’s calculus when they successfully carried two astronauts, Doug Hurley and Bob Behnken, to the ISS.

The stakes of a rocket launch are entirely different when it comes to transporting people – it transforms because in a manned mission, failure isn’t the explosion of a satellite, but is, instead, the dissolution of the astronaut’s families as well as the public’s perception of space travel.

Moreover, while colonizing extraterrestial planets garners brilliant PR, many in the aerospace sector aren’t focused on that goal and rightly so.

One can summarize the space industry into two groups: SpaceX, ULA, etc. are all spending billions on R&D to eventually pursue deep-space (sending humans to Mars), but Rocket Lab, Blue Origin, and Virgin Galactic are aiming to dominate low-earth orbit (LEO), which is only 99 to 1200 miles above the Earth’s surface.

Low-earth orbit has its own set of low-hanging fruit, like space tourism and supersonic jets. If we want to convince taxpayers of the importance of aerospace R&D, we should allow them to continually reap its rewards.

The first goal makes sense – space exploration captures the imagination and in the process, humanity learns more about itself, science, and uncovers whether or not we’re alone in this universe. We’re all aware of the soon-to-be pervasive Mars missions, but why are these entrepreneurs vying for control of Earth’s low-earth orbit?

The Case for Space

Because the escape velocity for any projectile is 11.2 km/s, it takes tremendous amounts of energy to send any object into space. What most don’t realize is that SpaceX’s Falcon 9 was 95% propellant by mass – the payload mass was merely 5% of the rocket.

For those interested, the tyranny of the rocket equation illustrates that sending a rocket to space is on the cusp of scientific impossibility – we’re lucky that Earth wasn’t born larger, and thus didn’t have stronger gravity, making it actually impossible to leave. So, it is a significant engineering challenge to enter orbit; in fact, it only takes twice as much fuel to get to Mars as it does to simply leave Earth.

For the first few decades of spaceflight, all of humanity’s missions were in LEO; it was only with the Apollo missions and later the deep space missions with robotic aircraft, Voyager, that we ventured beyond our solar system. But, the only sustaining mission that we currently have in space is the ISS, based in LEO. Satellites, like those of Starlink which I mentioned in The Final Colony, also exist in this space.

While the dream of venturing to Mars can melt even the coldest space naysayers’ heart, it doesn’t create a sustainable ecosystem for the space economy. Until it lends itself to that effect, there are three ways I think we can create a sustainable space ecosystem, all achieved in LEO: the first is space tourism (i.e. Virgin Galactic), the next is crafting satellites (i.e. Starlink), and the last is supersonic jets (ie. Aerion).

Just last week, Virgin Galactic inked a deal with NASA to transport galactic tourists to the ISS – they will be entrusted with providing “on-orbit resources, and ground resources.” Their first step is unbundling NASA to eventually turn anyone into an astronaut; consequently, the end goal is Virgin Galactic acting as a travel agent for private citizens looking to vacation on the ISS or research missions for governments.

In other words, Galactic can start making cash-flow before they need to develop the capabilities to send people to LEO. But, with only 600 pre-orders as of today, is there a burgeoning market for space tourism?

To put it in perspective, NASA has spent an inflation-adjusted $20 billion annually, or over $1 trillion over the last 50 years to ship 565 astronauts into space. Certainly, that’s not the best measure of how important NASA’s research has been and some of those astronauts weren’t sent by NASA, but the takeaway is how expensive it has been to enter space.

Still, I believe the demand for space tourism is elastic and those who succeed in the transportation business often do so because of first-mover advantage. Eventually, margins will recede much like they did with the airline industry.

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In just over four years, Galactic wants to send 6x the total number of astronauts in history to space – the ultimate travel experience. The perk of any luxury business is that you only need to appeal to a very small percentage of the population; therefore, the Virgin Galactic team could see $1 billion in revenue from only 4000-5000 paying customers. That's a feasible user base.

Navigating the skies

“The pitch for airlines and business travelers goes like this: Imagine making a day trip from the U.S. to Europe. Get on the plane in New York and be in London for lunch. Hit some business meetings in the afternoon, then go have dinner and drinks with colleagues. Now fly back to New York, where you would land about two hours before you took off from London and be in bed by 11 p.m.”

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At the same time, Galactic is following in the path of Boom Supersonic by advancing upon Concorde’s speed of Mach 2 (twice the speed of sound), which was discontinued in 2003. What is the point of supersonic travel? Effectively, the Concorde inspired the idea of “point-to-point supersonic” passenger flights to make the day trips from Cape Town to San Francisco a thing of the past. What could the world look like if someone could pop down to Tokyo for a lunch meeting and then return home to LA for dinner?

Point-to-point travel entails flying through the upper reaches of the atmosphere with lower air resistance where one can move at multiple times the speed of sound. Even more than their space tourism business, it’s the potential of high-mach transport that has been the biggest catalyst for Galactic’s stock price year-to-date.

This vision has captured the attention of current Wall Street incumbents like UBS as well. In a report from 2019, the firm noted that the creation of point-to-point travel could “cannibalize” the market for long-distance airline tickets. When would this happen?

Yet, any supersonic aviation company has to deal with the three Es of their craft: engineering, environment and economics. “Concorde was a brilliant piece of machinery, a noble experiment,” said Tom Vice, chairman, president, and CEO of Aerion Corporation, “but it put too much emissions in the environment, too much noise into our communities, and was too expensive to operate.”

Designed for the long-distance flier, Aerion is creating the AS2, a 8-12 seater passenger jet, that will fly at an initital speed of mach 1.4. In other words, it’ll save weary travelers over four hours on their trip from New York to Sydney when the AS2 is released in 2025. Even more importantly, Aerion’s mission is building the best supersonic jet while simultaneously removing noise and carbon emissions; how do they plan on doing this?

The AS2 possesses a feature named “boomless cruise,” in which the supersonic boom is reverberated back into the atmosphere. “Low boom,” its distant cousin, has the noise pollution of a distant thunderstorm. Ideally, we never even notice the planes in our sky, something astronomers have wanted for decades because of the light pollution.

Often, companies in a deep-tech area must change the perceptions of consumers before they are free to innovate. Like Tesla, Aerion’s meta-goal is to convince the world that supersonic planes don’t have to be loud, dirty, and dangerous – they can be both the fastest and greatest plane in the skies; arguably, the Tesla of jets.

Transport & Knowledge

Studying economic history, one learns that GDP and the speed of information has been relatively correlated. Instantenous communication means that the feedback loop of innovation tightens and people can work faster. Despite the promise of remote work, most of the world still operates through a face-to-face format, especially when closing deals with would-be clients or suppliers.

Moreover, new modalities of transport fundamentally make new locations more valuable. As I described in the 3rd Industrial Revolution, the advent of the transcontinental railway paved the way for Chicago's success and made different geographies more relevant like California vis-a-vis New York. And because supersonic jets reduce the barrier of traveling closer to zero, what areas might blossom?

For ambitious white-collar workers, the time is close where they can live and take advantage of Utah’s beauty while returning later that day for a board meeting in San Francisco. As remote work first became popular, it was possible to live in southern California and still participate in the Bay Area tech community. Feasibly, with faster flight, one could live on the west coast, commute to the east coast, and return home that same day by 10pm.

Hearts & Minds

I see the age-old idea of a 2-week extended vacation fall by the wayside when it becomes possible to spend one’s evenings in any city. Property markets and gentrification will undoubtedly aggrandize when it’s easy for anyone in San Francisco to spend their weekends in Tokyo.

This has been the case with commuter towns (Palo Alto) or commuter states (Connecticut) where a significant percentage of the area’s white-collar labor supply commutes 30 minutes to an hour for work. At supersonic speed, the surface area of once-abandoned locations widens and suddenly, the whole world becomes one’s oyster.

Moreover, space tourism is the first step in generating an everlasting ecosystem in the stars. I’ve always been intrigued by claims that people will suddenly move from Earth to Mars – there are innumerable steps in between: we must get people adjusted to space first. Doing so is Virgin Galactic’s mission.

Summarily, there are multiple knock-on effects that arise from aerospace R&D, whether it be in the rise of new cities that emerge from the launch supersonic travel or like in the Expanse, where humanity splinters into multiple species: some live on Earth, others on the asteroid belts, and the rest on Mars.

This innovation is exactly what America currently needs with 40 million people out of work. Fate has given the greatest concentration of human capital ever assembled, but where should they go? If the alternative is standing around and waiting for another crisis, I, instead, would rather utilize these minds for the betterment of America and the world writ large.