A research note from SG Cowan says that some 39 per cent of people with an admittedly high net-worth of more than $5 million are interested in paying Sir Richard Branson’s Virgin Galactic tourist flights to the very edge of space.
“Cowen’s proprietary survey highlights a high level of interest among high-net-worth individuals to fly to space at a ticket price of $250k or above,” analyst Oliver Chen said in a note to investors on August 30th.
Cowan have number-crunched that into potential candidates for Virgin Galactic’s flights to about 2.4 million people.
Cowen noted that “Virgin Galactic will face supply constraints to serve all interested individuals, given the limited capacity to fly passengers.” The company currently has just one spacecraft flying and has announced plans to build as many as five more in the coming years, with two currently under construction.
Each Virgin spacecraft can carry up to six passengers on a flight to the edge of space, in addition to the two pilots that fly it. Cowen estimated that, if Virgin Galactic builds 11 spacecraft by 2030, the company could “potentially fly ~3,400 passengers per year,” with flights almost daily.
However, passengers prior to boarding the rocket-plane will undergo up to 3 days of intensive training at the company’s spaceport in the New Mexico desert. The end result, according to publicity at the unveiling of the spaceport, talks about a 90-minute flight of which only a few minutes will actually be in low Earth orbit.
Chen adds that Cowan understands that Virgin Galactic holds confirmed reservations from some 600 people. According to reports these come from numerous celebrities including Leonardo DiCaprio and Justin Bieber.
Cowen issued its research coverage of Virgin Galactic on August 31st giving the listed stock an “outperform” rating and a $22 price target – meaning the firm expects shares will rise 26 per cent between now and 2021.
Virgin Galactic has two more test flights before taking founder Branson in Q1/2021 (a much-delayed promise from the company’s founder) which will market the opening of the company’s commercial service.
Virgin Galactic is allowing would-be passengers to pay $1000 to ‘reserve’ a seat.
Virgin Galactic Holdings is now owned by SPCE, and Abu Dhabi’s Mubadala sovereign wealth fund on July 30th bought 14.9 million shares in the business (a 7.08 percent stake worth around $334 million with shares at $17.90).