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Alan Boyle points to Sam Dinkin's article at this week's The Space Review that contends that there will be three players in the suborbital market (not because he has identified three favorites, but because that's the way markets of this kind tend to work). Alan then predicts that Space Adventures will be one of them.

Well, maybe, but not necessarily.

This isn't to imply that Space Adventures won't survive, or continue to be successful, but I question its categorization of a spaceline. To date, it hasn't acted in that role, or rather, it hasn't acted fully in that role.

We have to define terms here. I consider a spaceline to be an entity that operates spaceliners. It can perform other functions (such as marketing, which is what Space Adventures primarily does), but if it doesn't do that, it's not a spaceline, any more than a company that doesn't lease/own, and operate airliners can be considered an airline.

In the aviation industry, we have large commercial aircraft manufacturers, like Boeing and Airbus (the only two surviving after the consolidation of the past few decades), and we have airlines, which purchase or lease those aircraft and actually operate them, providing air transportation services to the public. The airlines market their services to the general public, and Boeing doesn't have to worry about that--they only have to market their airplanes to the airlines.

In the early days, it wasn't as cleanly delineated. In fact, in the thirties, the aircraft manufacturers also operated the airplanes, and established their own airline services. For instance, in the late twenties, Boeing had an airline called Boeing Air Transport. This company later purchased and merged with three other airlines to become United Airlines.

As a result of the Air Mail Scandal, in which charges were made of improper awarding of routes to politically powerful conglomerates, the airlines were forced to divest themselves of association with aircraft manufacturers, and we ended up with the system that we have today.

However, it's not clear what the model will be for spacelines. Certainly initially, the people who build space transports will operate them, because no one else will know how, but it remains to be seen how the business models will work. The traditional wisdom is that with such a small market, the money is to be made in operations, rather than manufacturing, because there's no need for that many vehicles.

In any event, I in fact founded Interglobal Space Lines years ago because I recognized a hole in the space industry. For aviation, there's an interface between the flying public and the aircraft manufacturers--it's called an airline. But there were no spacelines, and if someone wanted a ride into space, they had to deal directly with a launch vehicle manufacturer, who didn't know how to deal with the general public--their customer base was government agencies and comsat manufacturers. My hope was that in founding a spaceline, I could start to address this disconnect.

I still hope to do that, as some of the vehicle designs and operations mature to the point that they can be purchased and operated by a separate entity. In fact, one of the things that I've been talking to FAA-AST about as the new regs have evolved is ensuring that launch licenses can cover providers who aren't the vehicle manufacturer (analogous to having a Part 121 Operaters certificate). There's no current precedent in the space industry for this--all licenses issued to date have been to the vehicle manufacturer, but I've been assured that there's nothing in the current regulations that would prohibit it.

Anyway, as I said, in this formulation, Space Adventures is not an operator--they are a marketer of other entities' services. This is an important role, but they're not (yet) a spaceline. Only time will tell whether or not they choose to become one, and are successful at it.

Posted by Rand Simberg at June 16, 2004 09:00 AM
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Brokers and brand holders are the wave of the future.

Nike doesn't make any shoes and Sara Lee doesn't bake any cheesecake.

Match-making customers to capabilities seems like an excellent niche for Space Adventures and assures they will not be forced into bankrupcty if a technological innovation rendes obsolete a few billion worth of hardware.

Posted by Bill White at June 16, 2004 10:41 AM

I didn't say they have a bad business model--I was just disputing that they are a spaceline.

Posted by Rand Simberg at June 16, 2004 10:59 AM

I realize Space Adventures isn't following a spaceline model now, but from everything I've heard, that's their aspiration. They definitely see themselves as becoming eventually more than a travel agency (which is pretty much what they are now). The specific analogy I've heard relates to buses ... They want to be more like Gray Line or Greyhound (or maybe Carnival Cruises, to use yet another mixed metaphor). They would operate the buses and the facilities. Even now, they've been looking at potential "terminal" sites in Australia and elsewhere, and have been trying to work out deals with all the "bus" manufacturers. ... But would they employ the drivers and actually take ownership of the buses? I'm trying to find out more about that. I don't think they want to be in the bus-maintenance business ... maybe they'd lease the buses somehow.

But Paul Allen or other investors might just want to get into the spaceline business in their own right. I've already heard some rumblings about behind-the-scenes negotiations. So I'm very interested in how this next chapter is going to play out, and I'd love to learn more.

Posted by Alan Boyle at June 17, 2004 09:00 AM

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