The Economics Of... Space Travel
After looking at the economics of travel in my latest post, I was disappointed to realize that I forgot to address one very important place of both travel and exploration for humans: aerospace. NASA’s most recent Economic Development of Space update emphasizes, most notably, the economic opportunity of utilizing commercial service providers for missions. They claim that “[f]irst, it can stimulate entirely new markets not achievable in the past. Second, it creates new stakeholders in spaceflight and represents great economic opportunity.” While this “government-as-a-customer approach” is identifiable in several other industries, astronautics has been reserved mainly to NASA as an administration of the government. Therefore, the risk of limited competition in a market comprised of only one consumer might be a concern.
Fortunately, or frighteningly in some minds, there have been investments in “New Space” startup firms raising billions of dollars per year to create a commercial astronautics market (National Review). This may alleviate the risk of a limited market exploiting NASA, but the new challenges we face require regulation and legislation for space travel. The Federal Aviation Administration (FAA) is taking leadership in promoting American commercial space travel and, according to an immediate release from December 2019, their “Office of Commercial Space Transportation (AST) has [already] licensed or permitted more than 370 launches and reentries.” If the idea of corporate space transportation is becoming all too real, it may comfort you alternatively to know they have prioritized thorough environmental impact research and plan to issue permits for reusing suborbital rockets under the National Environmental Policy Act. While the regulation of orbital (astronautic) commercial space travel was under question for a while, NASA has began The Exploration Campaign to “[t]ransition U.S. human spaceflight activities in low-Earth orbit to commercial operations that support NASA and the needs of an emerging private sector market” (NASA).
If this growing commercial industry interests you, you might find the following price tag and statement of intent from NASA in their 2018 campaign report especially noteworthy. “In pursuit of a timely development and transition of commercial capabilities in LEO, where NASA envisions being one of many customers in the mid-2020s, the Administration is requesting $150 million in FY2019 (with increasing investments in subsequent years) for a new Commercial LEO Development program. These funds will stimulate the development and 16 maturation of private sector entities and capabilities that will ensure commercial successors to the ISS […] operational by 2025. This stimulation seeks to strengthen overall demand and interest in utilization of commercial platform(s) in LEO.”
According to Forbes, private market valuation for the first commercial astronautics company, Virgin Galactic, was at one point $1.7 billion. “The company has already sold over 600 tickets for flights on its spacecraft, representing over $120 million in potential revenue” (Forbes). The potential for commercial space travel is exciting, but the market exclusive to NASA is currently unparalleled at $21.5 billion in 2019, or 4% of the 2020 Federal Budget (Britannica). The economic impact of our nation’s space research administration, and now industry, has been a priority since NASA’s inception in 1958. Britannica claims that since then, $601 billion has been spent on the missions of this administration, giving space travel its long-standing influence on the national economy.
""[Virgin Galactic] has already sold over 600 tickets for flights on its [commercial] spacecraft, representing over $120 million in potential revenue” " -- Forbes
Works Cited
“Brtiannica's SpaceNext50 Space Facts.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., www.britannica.com/explore/space/space-facts-you-should-know/.
“Fact Sheet – Commercial Space Transportation Activities.” FAA, FAA, 19 Sept. 2014, www.faa.gov/news/fact_sheets/news_story.cfm?newsId=19074.
Knapp, Alex. “You Can Now Buy Stock In Richard Branson's Space Tourism Company Virgin Galactic.” Forbes, Forbes Magazine, 28 Oct. 2019, www.forbes.com/sites/alexknapp/2019/10/28/you-can-now-buy-stock-in-richard-bransons-space-tourism-company-virgin-galactic/#be5cb543db80.
Northon, Karen. “NASA Unveils Sustainable Campaign to Return to Moon, on to Mars.” NASA, NASA, 26 Sept. 2018, www.nasa.gov/feature/nasa-unveils-sustainable-campaign-to-return-to-moon-on-to-mars.
Rainey, Kristine. “Economic Development of Space.” NASA, NASA, 3 Nov. 2015, www.nasa.gov/mission_pages/station/research/benefits/economic_development.
Strain, Michael R. “The Economics of Outer Space.” National Review, National Review, 25 July 2019, www.nationalreview.com/corner/the-economics-of-outer-space/.