After Titan sub implosion, three Kiwis face extreme tourism decision

Auckland general and laparoscopic surgeon John Dunn is astronaut number 427 on Virgin Galactic's waiting list.

Pundits say the Titan submersible’s implosion could put a dampener on so-called extreme tourism.

But that’s not the case for three Kiwis who have booked tickets on Virgin Galactic’s SpaceShipTwo Unity space plane.

Earlier this month, after years of delays - caused in part by a 2007 engine test explosion that killed three staff, and a SpaceShipTwo test flight crash in 2014 that claimed the life of test pilot and father of two Michael Alsbury after the craft broke apart mid-air - Virgin Galactic said it would stage its first commercial flight this Thursday (Friday NZT).

Entrepreneur Derek Handley: 'Still on, at this stage.' Photo / Dean Purcell

It will launch from Virgin Galactic’s spaceport in the New Mexico desert, just south of the unusually named city of Truth or Consequences.

Mark Rocket, an early Rocket Lab employee and investor who now runs Christchurch-based Kea Aerospace, was one of the “founders”, or the 70 people who bought one of the first batch of Virgin Galactic tickets released in 2006, when a ticket cost US$200,000; the price was later increased to US$250,000, then US$450,000.

Kea Aerospace founder Mark Rocket, pictured at his firm's assembly plant in Christchurch in May: 'Whether it’s mountain climbing, sky diving or bungy jumping, there’s an element of risk.' Photo / Chris Keall

Rocket told the Herald that the Titan tragedy, “Had me thinking about implosion versus explosion. It’s tragic for the families involved, and everyone taking part in an adventure activity needs to get comfortable with the risk profile. Whether it’s mountain climbing, sky diving or bungy jumping, there’s an element of risk.”

Rocket still plans to use his Virgin Galactic ticket. “Hopefully everything goes to schedule and I’ll be flying mid-next year.”

John Dunn next to SpaceShipTwo during a 2016 visit to Virgin Galactic's New Mexico spaceport. Photo / Supplied

Auckland general and laparoscopic surgeon John Dunn is a little further down Virgin Galactic’s list.

Did the Titan submersible episode give him second thoughts about extreme tourism?

“Nope. That thing was crazy. Virgin Galactic is much more jacked up,” Dunn told the Herald.

While Titan’s mid-ocean dives fell into a regulatory gap, the US Federal Aviation Administration oversees regulation of commercial space tourism and requires operators to have “insurance, or demonstrate financial responsibility to cover potential damage and injury to the public, public property, and any government personnel and property at risk from the operation”, according to a New York Times report.

Yet the FAA’s oversight of space tourism is limited to “protecting the public on the ground and others” in the country’s domestic and over-sea airspace”. The FAA has no role in “regulating the safety of passengers onboard commercial space vehicles”, a spokesperson told the Times.

At Virgin Galactic's 'Spaceport America' in New Mexico: Carrier aircraft Eve with the SpaceShipTwo Unity space plane attached, (centre). Photo / Supplied

Dunn has done his research. He first talked with Virgin Galactic founder Sir Richard Branson in 2011. He viewed Virgin Galactic’s space plane at the Farnborough Airshow in the UK in 2012, and he visited the company’s spaceport in New Mexico in 2016 and continues to be in close communication with the company.

The surgeon notes that although billed as the first commercial flight, it will carry a trio of Italian Air Force researchers, who will carry out experiments during five minutes of weightlessness.

“I think everyone is waiting to see how that goes and then they will start taking the rest of the proletariat like myself,” Dunn said.

“I am future astronaut number 427 so it won’t be anytime soon. They have reduced the number of passengers per flight from six to four. I suspect they will start flying monthly but I know the long-term goal is perhaps twice weekly. Again we will wait and see.”

A third Kiwi Virgin Galactic ticket holder, entrepreneur Derek Handley, was more taciturn. He told the Herald he was “Still on, at this stage.”

Investors are also waiting for Virgin Galactic’s first commercial flight.

Virgin Galactic predicted at the time of its NYSE listing in 2019 that it would break into ebitda profit by 2021 and generate revenue of US$398m by 2022.

But with its spaceships grounded, it reported revenue of only US$2m last year and a net loss of US$505m. For the first quarter of this year, it lost US$159m, from a year-ago loss of US$93m. Cash and equivalents fell to US$874m from the year-ago US$980m.

The firm raised US$300m through issuing new shares last week on the back of the first commercial flight announcement. It plans to raise another US$400m through a second stock offering.

SpaceShipTwo Unity completes a runway landing at Spaceport America, New Mexico in 2020. Photo / Supplied

Dilution from the new shares pushed Virgin Galactic’s stock down 20 per cent last Friday.

Its shares were trading at US$4.34 this morning (for a market cap of $US$1.2 billion), down from a high of more than US$55 when Branson’s personal flight to the edge of space in July 2021 attracted wide publicity.

Jeff Bezos' Blue Origin has now flown tourists into near-space four times on its New Shepherd craft since July 2021.

The Virgin founder’s second space company, Virgin Orbit, filed for bankruptcy protection in April. The satellite launch business collapsed after a series of failed test launches, and a failure to raise fresh capital.

The company was spun out of Branson’s space tourism venture, Virgin Galactic, in 2017. It went public in December 2021 at a US$3 billion valuation. Its market cap had fallen to US$60m by the time of its April 4 Chapter 11 filing.

Sir Richard Branson during a Virgin Galactic test flight in July 2021. Photo / Supplied

Branson’s pain was Peter Beck’s gain as Rocket Lab paid US$16m for various Virgin Orbit assets, including the firm’s 144,000-square-foot headquarters and manufacturing centre in Long Beach, California, in a Bankruptcy Court-approved auction. Rocket Lab said it was only interested in Virgin Orbit’s manufacturing and property assets, and would not be acquiring any of its technology.

John Dunn with a Virgin Galactic spaceplane at the Farnborough Airshow in 2012 Photo / Supplied

In 2019, as Virgin Galactic prepared its stock market listing, Beck told the Herald he would not buy a ticket. It was a suborbital flight. More broadly, for all his love of rockets, he had no wish to become an astronaut.

“I understand the engineering too well,” Beck said.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is technology editor and a senior business writer.