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Cufflinks and the Caribbean: How Virgin Galactic kept space tourists’ interest and money

COLORADO SPRINGS, Colo. (Reuters) – Virgin Galactic’s goal to fly tourists into space as early as this summer is about 12 years later than initially promised by its founder, British billionaire Sir Richard Branson.

But many of its customers, including Gisli Gislason, aren’t sweating it.

Right up there with a few minutes in space on Gislason’s bucket list is his time on earth with other space enthusiasts and Branson, a fellow adrenaline junkie known as much for his globe-trotting stunts as for starting his own airline.

“It’s more than just a trip to space, it’s a huge, ongoing event,” said Icelandic ticket holder Gislason, who has a Virgin Galactic logo tattooed on his arm and bought his ticket to space in 2010. “I’ve already got what I paid for, so I’m just in for a bonus,” he added.

Gislason’s experience is no accident.

Since its early days, Virgin Galactic specifically set out to win customer loyalty, knowing its attempt to become the world’s first commercial spaceline would likely see its share of setbacks. So featuring its top salesman Branson, the company prioritized exclusive experiences for its “future astronauts,” building a community that has stayed loyal through years of pushed deadlines and a fatal 2014 crash.

While waiting for their trip, some since 2004, Virgin ticket holders have been busied with treats on earth: from a custom-created solar eclipse festival in Idaho and test-flight viewings in California’s Mojave Desert to spaceship-shaped cufflinks at Christmas and group excursions to Branson’s private island in the Caribbean, where they can play tennis with the famous entrepreneur and swap design ideas for the spaceflight around a campfire.

“One of our astronauts once said to me, ‘Don’t fly to space, we’re thoroughly enjoying spending all this time going to the game reserve in Africa or Necker Island,’” Branson told Reuters in an exclusive interview.

“That long, drawn out foreplay can be pretty good, the orgasm is quite quick,” he said, laughing.

Ticket holders pay for some of these particularly high-end events, but just cover the travel for others.

“That was a compelling part of the package,” said Mark Rocket, a New Zealander who changed his name nearly 20 years ago and signed up with Virgin Galactic in 2006. “It’s not just about those few minutes in space.”

More than 600 people from 58 countries have put down a deposit for a 90-minute flight priced at $250,000, up from $200,000 in 2013. The first 100 “founders” will partake in a lottery to determine who gets to fly sooner rather than later. The company expects to increase the frequency of the flights as they build up their space fleet over time.

It has collected about $80 million in ticket holder deposits, money which CEO George Whitesides said the company does not use for spaceship development. That funding instead comes largely from the Virgin Group and Abu Dhabi’s Mubadala Investment Group.

Other than stating Branson himself will be on the first scheduled flight, the company has not disclosed which ticketholders will go first – though Branson is considering the possibility of some customers jumping the line for the right price to help pay the bills.

“There is a market out there we believe who would be willing to pay a million dollars to go on an earlier flight, and we’ve got a few slots at that sort of price,” Branson told Reuters.

Signed-up “future astronauts” vary from billionaires to people who remortgaged their homes to pay for the ride, from pop star Justin Bieber to Mary Wallace “Wally” Funk, 80, one of the so-called ‘Mercury 13’ women who in the 1960s passed the same punishing tests as male astronauts before the program’s funding was pulled.

Virgin’s decision to sign up customers long before it developed and tested a commercial spaceship contrasts with Blue Origin, founded by Jeff Bezos, which will only sell tickets for its suborbital flights after it completes its crewed flight tests.

“It would not have been a Virgin company had we squirreled away in secret and built a spaceship without any customers and rolled it out once it was all ready and tested,” said Stephen Attenborough, Virgin Galactic’s commercial director and first full-time employee.

FILE PHOTO: Virgin Galactic rocket plane, the WhiteKnightTwo carrier airplane, with SpaceShipTwo passenger craft takes off from Mojave Air and Space Port in Mojave, California, U.S., February 22, 2019. REUTERS/Gene Blevins/File Photo

Now, after a crewed SpaceShipTwo test flight to space in December 2018 and another carrying a test passenger in February, Virgin Galactic is inching closer to commercial flight. Blue Origin’s New Shepard rocket has reached space but its first human spaceflight is still targeted for this year, and it has not determined a ticket price or when it will begin taking reservations.

Elon Musk’s SpaceX is also in the race: last year it named Japanese fashion magnate Yusaku Maezawa as its first customer on a voyage around the moon, tentatively scheduled for 2023.

“FUTURE ASTRONAUT” STRATEGY

Virgin Galactic knew that the price tag for its flights, sold in advance to prove that there was a healthy market when there was a product to deliver, would require providing customer service during the wait.

“Right from the start it was obvious to me that if we were going to have customers and we were accepting fairly large deposits, we were going to need to communicate regularly with those people,” said Attenborough.

It was not clear how long the wait for tourist spaceflights might be, with Branson’s timelines shifting: In 2004, Virgin was saying it would offer commercial spaceflights by 2007. By 2012, the plan was 2013.

As deadlines whizzed by, the future astronaut program evolved, organizing group trips from the Farnborough Air Show to the ‘Cradle of Humankind’ fossil site in South Africa.

“That is something that they tapped into and wised up to really early,” said Trevor Beattie, a ticketholder and UK advertising executive working on Virgin Galactic’s marketing campaign. “They created, quite deliberately, a sense of community.”

For some, access to Branson himself upped the experience.

“Isn’t it funny how the wine tastes better when you know the winemaker?” said Matthew Upchurch, a ticket holder and the CEO of Virtuoso, a travel agency network with exclusive rights to sell Virgin Galactic flights in North America.

CRASH TESTS LOYALTY

The biggest test of this carefully built customer community came in 2014, when a test flight crash killed the co-pilot and seriously injured the pilot.

“I remember very well waking up very early on Saturday morning after the Friday accident and wondering what would happen to this customer base,” Attenborough said.

The company reached out to customers by email on the day of the crash, both before and after the co-pilot’s death was known. There was a blog post from Branson on that day, and later, a video message. A subsequent email from the astronaut relations team said that they planned to call every customer individually.

“That was obviously a horrendous day for everybody,” said Branson, adding that his experience of a fatal 2007 Virgin Trains crash in which an elderly woman was killed meant he knew it was important to get to the scene of the test flight accident and “take these things head on.”

In the end, Attenborough said only a “handful” of customers asked for refunds.

An email seen by Reuters from the astronaut relations team three weeks after the crash said it would soon share a program of upcoming activities and trips. It advertised some “gold-dust-like spots” for a “star Galactic team” at the London Marathon – some of the sponsorship money would now go to a memorial fund for the co-pilot who was killed.

After consulting with customers, the company went ahead with one of its planned annual Virgin Galactic trips to Necker Island just a few weeks after the crash.

Slideshow (9 Images)

Now, after years of huge setbacks and surreal highs, Virgin Galactic’s ticketholders are edging closer to their flights. For some, space is still the final frontier.

“I’ve driven a Bugatti at 253 miles an hour, I’ve skied to the South Pole, swam at the North Pole. I’ve done a lot of stuff and the thing I really want to do is fly in space,” said Jim Clash, an adventure journalist and passenger 610.

Editing by Greg Mitchell and Edward Tobin

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Prakash Poojary
Business Analyst

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