George Whitesides, Chief Executive, Virgin Galactic

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Of several companies seeking to make a business of carrying paying passengers to the edge of space, Virgin Galactic appears closest to beginning operations. The company reached a major milestone in October when its SpaceShipTwo suborbital craft conducted its first solo flight test, gliding for 11 minutes after being released from its WhiteKnightTwo carrier aircraft and landing at the Mojave Air and Space Port in California.

Led by Virgin Group founder Sir Richard Branson, Virgin Galactic plans to offer customers suborbital flights at $200,000 a seat and has signed up over 380 people so far.

SpaceShipTwo, designed to carry six paying passengers, along with WhiteKnightTwo were built by Scaled Composites LLC, an aerospace and specialty-composites company in Mojave. The vehicles are based on the craft developed by Scaled Composites founder Burt Rutan that were used to win the Ansari X Prize, which was offered to the first nongovernment entity to safely fly passengers into space and back twice within a two-week period.

George Whitesides says Virgin Galactic has sufficient funds to carry it through to its first commercial flight following last year’s $280 million cash infusion from Aabar Investments of Abu Dhabi, United Arab Emirates. Over the next year, Virgin Galactic expects to obtain regulatory approval from the U.S. Federal Aviation Administration (FAA) and begin powered flights of SpaceShipTwo. It will operate out of Spaceport America, New Mexico, which also serves as the company’s headquarters.

Whitesides spoke recently with Space News staff writer Amy Klamper.

 

When will powered test flights of SpaceShipTwo begin?

We haven’t released a formal schedule for that but we do expect to start in 2011. And it will be dependent on how the overall test program is going. We just completed the first glide flight and we now enter a section of testing where Scaled Composites will run the spaceship through a series of increasingly challenging maneuvers to explore the vehicle’s aerodynamic envelope. That will carry on for a period of time. In parallel we’re doing the ground portion of the rocket test program, RM2, which is being done by both Scaled Composites and Sierra Nevada Corp. In 2011 we will integrate the flight rocket motor into the spaceship and we will begin a series of increasingly longer burns. So we’ll start off with a very short burn, just as they did with SpaceShipOne, and extend that out up to the full duration, which is 90 seconds or so.

 

When do paid passenger flights begin?

As with other parts of the program we don’t have a specific date for that. Obviously the two major pieces that we’ll have to have finished will be completing the test flight program to a level we’re comfortable with, given that Richard Branson is going to be on the first commercial flight, and getting our commercial license from the FAA. We don’t anticipate any issues with that, but how long it takes will depend on various factors.

 

Where are you in the FAA licensing process?

Where we are now is an experimental permit from the airplane side of the FAA. Scaled Composites has a deep and abiding connection with that side of the FAA, having built dozens of new aircraft. Once we begin rocket-powered flight — my understanding is it requires a certain duration of rocket-powered flight — then there’s a point where we’ve got to go to the FAA’s Office of Commercial Space Transportation. That interaction has already begun, leading towards an experimental permit which Scaled will need to begin that portion of the flight test regime, and then the next step will be a commercial license which will be for Virgin Galactic, rather than Scaled Composites. So those are sort of the three regulatory pieces.

 

What is your planned initial flight rate?

We hope to begin at a rate of roughly once a week and scale that up to as much as three times a week in the first year. We have projections ramping up from there as we add spacecraft and develop a greater level of comfort that we can operate with greater rapidity.

 

Will these flights be insured and has Virgin negotiated an insurance package?

We’re very lucky that through Virgin Group we have relationships to insurers who do insurance with other airlines that have very large insurance packages. As we move into the test program, and commercial operation, we’ll be talking closely with those insurers to carry on the coverage.

 

Has work started on spare vehicles, either for WhiteKnightTwo or SpaceShipTwo?

Yes. We’re ramping up operations of The Spaceship Co. (TSC) in Mojave, which is a joint venture between us and Scaled Composites. There are well over 20 people and it is growing fast. We’ve got hangar space and the plan is basically to take the knowledge that’s been developed as part of the SpaceShipTwo program and bring that knowledge over to TSC to produce additional commercial vehicles. It’s growing very quickly, faster than the commercial sales part of Virgin Galactic. In order to meet our flight-rate projections, we need to scale that part of the operation up, because you can’t build a spaceship overnight.

 

Does Virgin need any more financing from either debt or equity investors?

No. With our investment that we did with Aabar Investments, we are now fully funded through commercial operations. That was a $280 million investment with additional terms around a potential small satellite project. The small satellite concept is interesting because it’s an area where you could make a real innovative product, but I think it will need a deep look in terms of the business and technical aspects of it, a look we really haven’t begun in any serious way yet. It’s an option that could be exercised if the board feels like it’s a good investment and that it’s approvable by U.S. regulators. But our major focus is suborbital space tourism. If we can get that going then we will have done something very important.

 

Virgin has talked about alternative operating locations. Is there any progress to report on that front?

Our main focus is getting started safely and successfully from Spaceport America in New Mexico. That said, operating overseas is an idea that has been raised. Our investor, Aabar, has a strong interest in the possibility of doing flights from Abu Dhabi, which we will certainly investigate. But the main thing is it would have to be approved by U.S. regulatory authorities.

 

How much has Virgin invested to date in this effort?

Virgin has put in approximately $200 million. With an additional $280 million we feel we’re well capitalized into and through commercial operations.

 

What’s your backlog and is it firm?

We have deposits from 380 individuals totaling over $50 million. It’s a fully refundable deposit, so if people want to get their money back they can. In our first year of operation we think it’s quite possible we’ll fly 500 people if we meet our projections. Obviously that’s completely dependent on our ability to operate the vehicle as frequently as we hope. We hope to have gotten deposits from those 500 people before we start commercial operations.

 

When do you expect Virgin Galactic to be cash flow positive?

We think we can do it potentially in year one of commercial operations, if we meet our flight rate.

 

Where do things stand with plans to fly payloads for the U.S. National Oceanic and Atmospheric Administration (NOAA)?

We signed a letter of intent in 2007 with NOAA and it’s still an area that’s very interesting. There was a bit of a hiccup because one of the packages that was being discussed had to do with the Orbiting Carbon Observatory, which unfortunately didn’t make it into orbit. But we’re still interested in pursing other ideas with NOAA. We’re going to keep talking about other ways we could do things in the future.

 

Are there any new funding lines at NASA that interest you?

The first thing to note about that is that we’re very proud that the company has been funded completely with private funds to date and we expect that it will remain funded by private funds through commercial operations. Obviously it would be great to work with other potential customers in the science and research areas. Clearly, as is the case with all programs, we’ve got to see what the appropriators do. But I think the important thing from our perspective is that if the agency was interested in pursuing that, it makes sense to fund research in particular because it takes months to years to build these payloads. So it’s important to start building up the instruments that would then be flown on the vehicles.

 

Are you considering a bid for the agency’s new round of Commercial Crew Development awards?

We are considering the recent solicitation. If we do something in this area, we would want to make sure that it fit with our principles of opening space to more people, bringing down the cost of space access, and using innovative technology to drive improvements in safety.