Blue Origin is Eating Into Virgin Galactic’s Commercial Spaceflight Advantage

When it comes to commercial spaceflight, the industry appears to be moving at an ever-increasing pace. More companies are looking to be the first to carry humans into space, and the race is very much on. Even though several companies are already in the running, some have been able to especially stand out.

Blue Origin is Eating Into Virgin Galactic’s Commercial Spaceflight Advantage

One of the most interesting things about the giants in the commercial spaceflight industry is that they all seem to be focusing on different areas. Tesla has been working closely with the government through NASA while also keeping its commercial dreams alive. Blue Origin remains focused on its objective for suborbital flight. Then, there is Virgin Galactic, which seems to be most focused on commercial, crewed flights.

Blue Origin Isn’t Playing

For years, Virgin Galactic has been promoting the day that it would finally be able to take people into space for tourism purposes. The company already even began selling tickets for a juicy $250,000, even though there is no feasible launch date in sight. People have been purchasing tickets, but even that hasn’t quite been enough to help Virgin Galactic make so much progress with its plans.

Now, the company seems to be having some challenges as Blue Origin could be on its tail. Earlier this month, Myles Walton, an analyst at investment banking giant UBS, raised concerns that Blue Origin’s progress with its New Shepard rocket could be a significant problem for Virgin Galactic as the two companies look to begin the dawn of the commercial spaceflight age.

CNBC reported that in his note, Walton explained that Blue Origin has challenged Virgin Galactic with its announcement that it plans to take its first set of people into space this year. While Virgin Galactic has always had a sort of first-mover advantage in the field, this seems all but gone now.

Blue Origin indeed made a splash with the New Shepard announcement. The company announced earlier this month that it will launch its first astronaut crew into space on July 20, marking a first for the company - and the industry. For now, Blue Origin has yet to launch ticket sales or even give any information about pricing concerning the New Shepard flights. However, a public auction for a seat on the launch is set to come soon.

A sealed online auction is set to run until May 19, and bids could go as high as $50,000. Blue Origin will also require some extra identification details and a $10,00 deposit for people looking to make substantially higher bids. From May 19, Blue Origin will hold a public bid, after which a live auction will be held online on June 12.

New Shepard has been built to take as many as six people at once on a ride outside of the Earth's atmosphere. Test flights have seen some success, with capsules reaching up to 340,000 feet above sea level. Capsules come with large windows, allowing passengers to get a lovely view of space while they’re up there.

Blue Origin already conducted a New Shepard test last month, with the rocket taking off and landing perfectly. While the flight didn’t have any passengers on board, it was a clear sign that the rocket- and the company - will be gearing up for the next stage.

Virgin Galactic’s Financial Woes

The moment Blue Origin announced the July 20 launch date, Virgin Galactic’s stock took a dump. The stock price fell by 4 percent, dragging itself down even further. Virgin Galactic has already had to endure a torrid 2021. The stock rose as high as $60 a share earlier in the year, but a spate of dumps has left it in a terrible shape.

The first was an announcement from company chairman Chamath Palihapitiya. In March, Palihapitiya, who helped take Virgin Galactic public, announced that he’d sell his personal stake in the company. The billionaire investor confirmed the sale of 6.2 million shares, netting himself about $213 million.

Although Palihapitiya still owns some 15.8 million shares through his SPAC, his personal stake is now nothing.

Then, last month, Ark Invest sold off 275,204 shares in Virgin Galactic. The sale was about half of Ark Invest’s Virgin Galactic stake, and it was a sign that something seemed to be off with the company. Ark Invest also sold 315,600 shares of Virgin Galactic from its ARLQ autonomous technology and robotics fund.

All of these selloffs have significantly affected Virgin Galactic’s stock price - hence, its financial standing has taken a hit. With Blue Origin getting funding from investors - including Jeff Bezos, the world’s richest man - it seems to have more of a wherewithal to see the commercial spaceflight mission through.

Still, this isn’t to say it’s over for Virgin. The company is rumored to be prepping for a test flight, and it has requested that the Federal Communications Commission (FCC) allow it to use specific radio in-flight frequencies from May 14. It is hoped that the company will have enough to move ahead. However, the next few months will be very critical to its future.

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