Virgin Galactic Finds Patience Wearing Thin

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Richard Branson chats with David Letterman (Credit: CBS Television)

Richard Branson chats with David Letterman (Credit: CBS Television)

By Douglas Messier
Managing Editor

While Richard Branson’s recent appearances on U.S. TV shows have undoubtedly helped him to sell many copies of his new book, The Virgin Way, the British billionaire unintentionally stirred up a hornet’s nest in the process.

On “The Late Show With David Letterman,” Branson revealed that SpaceShipTwo’s first commercial flight — which he will take with his son, Sam —  has been delayed from the end of this year until February or March 2015 at the earliest.

The announcement was hardly news to anyone who has followed Sir Richard’s fanciful and every shifting first flight predictions over the past decade. Ever optimistic and unfailingly incorrect, Branson has somehow managed to keep his credibility largely intact and public complaints about the delays to a minimum.

That situation, however, appears to be changing. Ticket holders who shelled out big bucks to fly on SpaceShipTwo, and New Mexico taxpayers who have footed a nearly quarter billion dollar bill to build Virgin Galactic a spaceport, are losing patience with Branson and his promises. They were none-too-pleased to find out about the latest delay on a TV talk show.

Only days after Branson’s appearance on Letterman, The Sunday Times reported that the billionaire “is facing a backlash from aspiring astronauts who have booked a $250,000 seat on his space rocket.”

The latest delay led to claims that the project was in crisis with some customers questioning whether the rocket would ever get into space….

One British customer, who asked not to be identified, said he now had doubts about whether Branson’s spacecraft would reach 60 miles above the Earth, the internationally accepted boundary between the atmosphere and outer space which is known as the Karman line.

The customer, who had paid a deposit of $150,000, said: “I think it will fly, but I am not sure whether it will get me into space as I was promised. If they don’t get above 60 miles I will certainly be withdrawing my money. I don’t think you can be considered an astronaut unless you cross that line.”

The Karman line is actually at 62.1 miles (100 km). Virgin Galactic had long advertised SpaceShipTwo as being capable of reaching that altitude and above in its marketing materials. However, Virgin’s contract with ticket holders only stipulates a minimum altitude of 50 miles (80.4 km).

Virgin Galactic officials now say they are aiming to reach 50 miles, with the Karman line as an aspiration. Sources have told Parabolic Arc that the lower altitude is a result of performance issues with the hybrid engine and modifications that have added weight to SpaceShipTwo.

Despite the lower altitude, the company claims passengers will still become astronauts because the 50-mile limit is the standard the United States used to award astronaut wings to pilots who flew the X-15 rocpket plane in the 1960’s.

That position seemed clear enough until Branson muddied the waters by appearing to contradict his own employees in an interview published The Times of London on Saturday.

Branson cracks a joke, flashes his trademark grin and says it would be “pretty foolish” if, as some sceptics attest, his spaceship won’t get high enough to breach the Karman Line between the Earth’s atmosphere and true space.

Yes, that would be foolish. But, that’s what his own people are saying will happen. Parabolic Arc’s own sources say the same thing.

Meanwhile, complaints from ticket holders about Branson announcing the delay on Letterman and a lack of substantive communication prompted a lengthy update on the company’s progress from Virgin Galactic’s Astronaut Experience Manager Clare Pelly and Astronaut Relations Manager Gemma Vigor.

The update provided information on a trip that WhiteKnightTwo took to New Mexico, Branson’s recent centrifuge training at NASTAR, and progress on ground testing SpaceShipTwo’s new hybrid motor.

We started this week with another good dataset from a full duration ground test firing of the hybrid rocket in Mojave, which had taken place on the previous Friday. Ongoing rocket motor firings, together with the recent successful cold-flow test flight of SpaceShipTwo, are important components in the run up to our upcoming rocket powered test flights.

There was also a paragraph devoted to Branson’s book tour designed to provide some context that skirted the main issue.

Richard also did some interviews in the US as part of a promotional tour for his latest book, The Virgin Way. Given some of the press that followed, we thought we’d provide a little bit of context. During his informal interview with Letterman, Richard mentioned that he hoped to fly to space in the first quarter of 2015. Richard, of course, wants to fly just as early as we will let him! He is probably our most enthusiastic and excited customer in that respect. However, he also understands that what we are doing is complex and unprecedented, that there can be no short cuts and that we will only fly our customers, including the first one, when our experienced and talented team says we are ready. We believe we are still on track to get to space by the end of the year. However, the unprecedented nature of this project means that a focus on dates can obscure the enormity of the effort and the importance of the safety and milestone-driven pathway that the Virgin Galactic team are so focused on achieving. Richard touched on some of these points in a few of his interviews this week, and we wanted to share this particular one from CNN – click HERE to watch.

A source said the response fell short in several ways. The message provided few details that would give confidence that Branson’s latest prediction of flying by March is any more credible than any of his previous ones. Engine tests have been going on for years now, and powered have been promised as taking place “soon” for a while.

The source also said there was frustration that the message came from a pair of marketing experts. An update from someone with actual knowledge of the program who would have been willing to put his reputation behind it would have been far more credible, the source said.

Finally, the update didn’t address the basic complaint about hearing of the latest flight delay on a talk show. There was no apology, no promise to avoid the situation in the future, no acknowledgment whatsoever that anyone had screwed up.

Instead, it was strictly AAB — All About Branson. The message seemed to be: Richard’s as upset about all his promises turning out to be false as you are. Even more so.  You should really feel bad for him, not yourself.

The message also contained safety claims that appear at odds with the flight test program that Virgin Galactic officials have publicly put forth. They have talked about conducting a handful of flights before Branson and his son inaugurate commercial flight. A source puts that number at five.

Branson, meanwhile, had his own take on the upcoming flight test program. “Between now and March, there will be many test flights, there will be many test flights actually into space,” he said on the Letterman show.

Five is undoubtedly more than one or zero, but few people would call it many. But, the problem actually goes far beyond a question of semantics.

Experts with knowledge of flight test tell Parbolic Arc that five flight tests is a very small number for a new rocket plane, especially given the use of a new type of hybrid motor not used on SpaceShipTwo’s first three powered tests to date.

They fear it is an insufficient number of tests with which to begin commercial service. Their fear is the company will push SpaceShipTwo through testing too quickly, which could result in serious consequences for Virgin Galactic and the commercial space industry as a whole

Beyond that serious concern, they doubt that even with five tests that Branson’s goal of flying by March is achievable. Thus, Sir Richard’s latest estimate may follow all his previous ones into the rear-view mirror.

It’s not just the 700 plus customers who have paid $80 million in deposits who are upset. There’s also growing impatience with Branson in New Mexico, whose citizens have shelled out roughly $225 million to construct Spaceport America for Virgin Galactic.

Sierra County Commissioner Walter Armijo said on Monday his patience is beginning to run out.

“I was surprised as all heck to hear that on David Letterman and not from the New Mexico Space Authority,” Armijo said, adding that his county has not seen any return on the $300,000 per year in taxpayer funding that it has granted the project.

Of about 150 people currently employed at the Spaceport, he said, only about 10 were hired from the local community.

“They’ve been delaying this for so long I’m not holding my breath,” Armijo said. “They promised jobs, tourism, and housing and we haven’t seen any of that. None of the expectations and promises have come true.”

The decision to build Spaceport America was a giant leap of faith for New Mexico, taken at a time when Branson didn’t even have a spacecraft built yet. Branson and then-Gov. Bill Richardson, who personally spearheaded the effort, made extravagant promises regarding direct and indirect economic benefits.

Residents in Sierra and Dona Ana counties voted to impose higher taxes on themselves to help pay for the spaceport. Both counties are poor, and they are counting on business generated by the spaceport to improve the local economy and see a return on investment.

Virgin Galactic’s delays have deprived New Mexico Spaceport Authority of flight revenues needed to operate a largely empty facility. Aside from WhiteKnightTwo’s recent visit and occasional sounding rocket launches, SpaceShipTwo is probably best known at the moment for a series of commercials that Virgin’s partner, Land Rover, filmed there recently.

The authority is so cash strapped that they can’t afford to properly pave a road to the spaceport that will significantly reduce travel times from Las Cruces, the region’s largest city. Visitors must now take a long, circuitous route through Truth or Consequences to reach the remote facility.

A project that Branson announced 10 years ago this Saturday with the intention of flying in 2007 is now running seven years behind schedule. He has spent a decade making promises he hasn’t kept. And many people aren’t willing to give him a pass on it anymore.

Unfortunately, this situation could end up merely increasing pressure on engineers and pilots in Mojave to complete the flight test program as quickly as possible. That would be very bad move. Haste is the biggest enemy of flight test. And Virgin’s flight test program already seems overly rushed.

  • Sam Moore

    Do we have a figure for now much Branson has personally invested?

  • Carolynne Campbell

    It is unusual for Branson to spend much of his own money on any project in which the Virgin brand is involved.

    Virgin Galactic, however, appears to be a major exception. While his financial arrangements are notoriously opaque, very well informed sources in the U.K. indicate that he has some hundreds of millions of his own money riding on this one.

    The same sources believe that Branson is not nearly as rich as he would have people believe, and that he has ‘bet the farm’ on this one.

  • Hemingway

    According to this interview of Sir Richard Branson on Bloomberg TV video, Virgin Galactic will be in space by the end of the year. This is a change. http://www.bloomberg.com/video/virgin-galactic-to-reach-space-by-year-end-branson-pNbrDaL4SsWTqiiPh_382w.html

  • Douglas Messier

    They’re aiming for a test flight into space. They’ve said that before. They were aiming to fly into space last year. Branson was going to dress up as Santa Claus and fly on Christmas Day.

    It’s possible they get to some definition of space this year.

  • Douglas Messier

    Just watched that interview. Branson claimed Virgin Galactic has had almost no push back whatsoever from passengers whatsoever (untrue), said “a lot” of flight tests are scheduled before he climbs aboard (apparently 5 qualifies as a lot), and billed the spaceship and its carrier aircraft as almost entirely carbon neutral (not remotely close).

    As for the ticket holders, there’s a lot more that has gone on behind the scenes than I’ve been able to report on.

  • The Alchemist

    When I was a kid, Richard promised me that he would come to my baseball game. I asked him, “Are you sure?”, and he looked at me and smiled and said, “I promise I will be there.”

    I’m still waiting for him at my baseball diamond….

  • SpaceTech

    Considering Branson may be making quite a few bucks off of interest on all those deposits sitting idle, I am sure a few passengers are a little upset that their money may be working for Branson and not them.

  • Chris Courtois

    LOL Carbon neutral …. he’s still tossing that one around is he?!
    Wow, this is somewhat saddening. I’m beginning to think this project will go bust before it flies.

  • Hemingway

    Here is a video of Sir Richard Branson on the Grey Goose Vodka partnership:

    https://www.youtube.com/watch?v=UYG1HvPN590

  • Hemingway

    This is a February 2014 video interview of Tom Bower, biographer of Sir Richard Branson: https://www.youtube.com/watch?v=z0lG9kzqjKE

  • Scott

    If you think patience is wearing thin in “fan dance world”, you should go to Truth or Consequences and just drive down Main Street which is in even worse shape financially than it was seven years ago when the big Breaking Ground party was held.
    The only good news which we know of is that Ted Turner has purchased a hotel (20 rooms) property in TrC where presumably wealthy people could rough it for a couple of days.
    Branson balked on a deal several years ago to personally invest (my requirement) in the development of a major seven star resort hotel and instead promised wealthy celebrities and Junior Astronauts that he was going to build a safari style tent camp, when that fell through he went for a BIG HOUSE that could be rented out whenever Branson and his gang were not using it.
    The plan now is to try to fake it by trying to fluff up a mediocre two star hotel in Las Cruces for would be Junior astronauts where rooms still go for $59. a night.
    Please remind me of just one promise that has actually happened as promised by Virgin or Virgin Galactic.

  • Hoplon

    When this is all over with, for better or for worse, you definitely have to write a book. One other thing: What about that giant equity stake from Aabar Investments? Wasn’t one of their stipulations for continued participation contingent on Branson reaching space by the end of this year?

  • MachineAgeChronicle

    Spaceport America strongly reminds me of North Haverbrook’s monorail (from The Simpsons).

  • MachineAgeChronicle

    Branson rarely invest his own money in these kind of things. I really feel for the residents of New Mexico who were taken for a ride. Unfortunately, I’m pretty certain New Mexico will see more tourist revenue from Breaking Bad fans than from VG.

  • Derek Tweedy

    H/T. Excellent piece Doug.

  • Stu

    The various quotes attributed to you in the press certainly do not make you come across as an independent professional expert (far from it, in fact, if the media quotes are accurate). I suspect Branson isn’t the only one that is trying to cast an overly positive spin about his own situation for personal reasons…