This article was written by Loizos Heracleous, Professor of Strategy at Warwick Business School, University of Warwick, and first was published on The Conversation. Read the original article here. The opinion of the authors does not necessarily correspond with that of the editorial team. Want your opinion to be featured on AeroTime? Send us a line at editor@aerotime.aero.


American engineer and businessman Dennis Tito paid US$20m in 2001 to become the world’s first official space tourist. He traveled to the International Space Station (ISS) on a Russian Soyuz capsule and then spent eight days on board, prompting some debate about the appropriateness of using the facility for financial gain. Since Tito, six other commercial passengers have visited the ISS – each on Soyuz spacecraft at US$20m a piece. The last of these traveled in 2009, after which the Russians halted the practice. But now commercial space travel, albeit at a lower orbit, is set to start again with a price tag that even the average multi-millionaire might be able to afford.

To the ordinary person, commercial space travel may seem like a pipe dream, but at an embryonic level a few well-funded space companies are creaking into action. Jeff Bezos has announced that a passenger flying with his aerospace company, Blue Origin, will pay between US$200,000 and US$300,000 for a ticket – comparable to Virgin Galactic’s proposed price of US$250,000. Passengers will experience weightlessness for three to six minutes, and enjoy unparalleled views of the stars and the curvature of the Earth.

Most of these space tourism products and technologies are still in their early stages, so for a commercial company setting a price is a delicate balancing act. Operators must settle on a figure low enough to be affordable to sufficient numbers of consumers, but high enough that the service could be commercially sustainable.

Currently, Bezos’ proposed price seemingly doesn’t even attempt to do this. Indeed, given his outgoings, it is more of a gift to those lucky souls who have the money to spare.

A financial black hole

The New Shepard rocket which Blue Origin plans to use for commercial trips has been in development since 2006. It will carry six commercial astronauts on each launch, and launches cost tens of millions of US dollars. Elon Musk has said that it costs US$62m to launch his Falcon 9 rocket, and US$90m for the much larger Falcon Heavy.

If this seems like a lot, then consider the billions the rockets cost to develop. Jeff Bezos reportedly liquidates around US$1 billion per year to fund Blue Origin, and the cost of the company’s New Glenn rocket alone was US$2.5 billion. The cost of the New Shepard, an earlier development built over the course of a decade, was likely the same or even higher.