Constellations, Launch, New Space and more…

Virgin Galactic’s Sales Numbers Don’t Add Up

By Doug Messier
Parabolic Arc
February 23, 2015
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Richard Branson speaks to the press at the Mojave Air and Space Port about the crash off SpaceShipTwo. (Credit: Douglas Messier)

Richard Branson speaks to the press at the Mojave Air and Space Port about the crash off SpaceShipTwo. (Credit: Douglas Messier)

I’ve been doing a bit of research into Virgin Galactic over the last few days.  I’ve come to a realization that the company’s ticket sales and cancellation numbers don’t add up in the wake of SpaceShipTwo’s crash.

Prior to the crash, Richard Branson was claiming the company had 800 ticket holders, or close to that number. He reiterated the figure three days after the crash in an interview on “CBS This Morning”.

“It was an incredibly sad day, particularly for Mike Alsbury’s family, and a real blow for the 400 wonderful engineers and team that work for Virgin Galactic and for the 800 people waiting to go to space,” Branson said.

On Nov. 11, BetaWired reported the following:

George Whitesides says that around 24 prospective passengers have decided to back out of the trip in the wake of the crash that led to the death of Michael Alsbury, the space plane’s co-pilot. This is a drop in the bucket compared to the around 800 reservations for the nascent commercial spaceflight company, with luminaries such as Leonardo diCaprio, Angelina Jolie and Stephen Hawking all still interested in catching a flight on SpaceShipTwo….

Whitesides said that the fact that a double handful of passengers have looked for a refund isn’t necessarily surprising, though he remains optimistic on the prospects of space tourism, especially in light of Virgin Galactic founder Richard Branson‘s dream of making space travel accessible for everyday people somewhere down the road.

The overwhelming majority of passengers have been telling Virgin Galactic that they’re still interested and that the company should keep going, the CEO said. Whitesides said the Virgin Galactic team is strong enough to overcome the challenges put before it and keep pushing even in the face of tragedy, adding that opening up access to space is a goal that’s “deeply worthy.”

Even with the 24 cancellations, there are still prospective passengers willing to throw the dice. According to Clare Pelly, astronaut experience manager for Virgin Galactic, an additional two passengers have signed up for the suborbital flight service in the wake of the tragic crash.

So, assuming an even 800 ticket holders, Virgin Galactic would have been left with 778 people still signed up for trips to space. The actual number would be somewhat less if we assume almost 800 tickets had been sold, but the remaining ticket holders after cancellations would have been in the high 700’s at that point.

Here’s the interesting thing. The number dropped to around 700 by the beginning of 2015. That’s according to Alan Boyle, the official chronicler of all things Virgin Galactic through NBCUniversal’s multi-platform partnership with Virgin Galacticto track the development of SpaceShipTwo.

About 700 customers have paid as much as $250,000 apiece to reserve seats on future SpaceShipTwo flights to the edge of outer space. The timetable for commercial operations depends on how the flight test program proceeds once it resumes.

So, what could account for such a sharp drop? There are two possibilities.

The first is that Branson was greatly exaggerating the number of ticket sales prior to the crash. Instead of 800 or nearly 800, ticket sales might have been around 720 to 725. So, a net loss of say 20 to 22 customers would place the number at around 700.

In a story published on Nov. 11 about ticket holders who decided to stick with Virgin Galactic, Boyle uses the phrase “more than 700 customers” and cites a 3 percent cancellation rate. That would put cancellations at about two dozen.

The second possibility is that ticket sales were close to 800, and that Virgin Galactic has lost more ticket holders than it has stated publicly. More losses could have happened after the initial round of stories were published.

It will be interesting to see what happens to the ticket numbers once the results of the investigation into the crash are published. It could be a vote of confidence in Virgin Galactic and Scaled Composites relating to how they build SpaceShipTwo and WhiteKnightTwo and ran the flight test program.

However, the outcome could be quite the opposite. My guess is investigators will find a lot of problems and issues with how things were done.  Such findings could seriously dent Virgin Galactic’s reputation and cause a lack of confidence among ticket holders.

It’ll be very interesting to see what happens.