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Bigelow presentation
Robert Bigelow stands on the stage during his press conference April 10th, talking about his company’s plans, while a video animation of an planned outpost is shown in the screen behind him. (credit: J. Foust)

Big plans, low prices

For the last several years, there has been a degree of mystique surrounding Bigelow Aerospace. While based in a city best known for flashy spectacle and overexuberance, the Las Vegas company kept a very low profile: people in the industry knew they were working on something related to the inflatable habitat technology the company had licensed from NASA after the TransHab effort came to an end—perhaps for space hotels, given that company founder Robert Bigelow owned the Budget Suites of America hotel chain—but beyond that there was little information about the company and its plans for that technology. And that low profile appeared to suit Bigelow and his company just fine.

In the last year or so, though, Bigelow has worked to raise the public profile of his company considerably, granting media interviews and even tours of his North Las Vegas manufacturing facility. In an interview last July, he explained that this change is in part because it was hard to keep his company’s plans secret as they started to launch spacecraft, as they did last July with their Genesis 1 subscale module, and because they had something to sell in the near term through the “Fly Your Stuff” effort. (See “Bigelow Aerospace’s big day at the rodeo”, The Space Review, July 24, 2006) However, the speculation about the company’s long-term plans remained.

“One thing that is a misnomer about our company is that we have been identified a lot as a space hotel company,” Bigelow said. “That is not the case.”

Last week, Bigelow replaced that speculation with the most concrete details to date about his company’s business plan. In a press conference during the 23rd National Space Symposium in Colorado Springs on April 10, Bigelow outlined the types of customers his company would go after, the types of products and services it would provide, and even the prices it would charge those customers. Still, even with all those details, many questions still remain about the viability of those plans.

Sovereign and prime clients

Even before last Tuesday’s press conference, Bigelow had sought to distance himself from space tourism, a stand that he reiterated in Colorado Springs. “One thing that is a misnomer about our company is that we have been identified a lot as a space hotel company,” he said in his opening remarks, pacing across the stage in the main conference hall. “That is not the case. We consider ourselves wholesalers of destinations that we build and we don’t consider ourselves as space hotel folks.”

Likewise, Bigelow also said that, unlike a number of other commercial space ventures, he doesn’t plan to depend on US government business, either from NASA or the Defense Department. “We can’t count on any traffic or assistance from DOD. We can’t count on any kind of a business model that has any dependency on NASA,” he said, without elaborating.

Without tourism or government business, just who does Bigelow believe is the likely customer for his orbital habitats? Bigelow said his company’s business plan focuses on two classes of customers: “sovereign clients”, who are foreign governments looking to jumpstart their own space programs; and “prime clients”, major corporations interested in leasing module space for various business purposes.

The idea behind sovereign clients—which Bigelow has mentioned in the past, including last summer after the Genesis 1 launch—is that there are far more countries with an interest in having their own astronaut corps then there is capacity by existing spacefaring nations to accommodate them. “Currently worldwide there are approximately 225 active astronauts. So why aren’t there two or three or four thousand after all these years?” he said. “But you realize right away, where would they go?” The limited number of destinations—today, only the ISS—constrains the number that can go, and political issues further complicate matters for other countries, he noted.

Bigelow’s approach, under a program called “Hang Time”, is to provide additional destinations for astronauts from other countries, as well as all the related services needed for those astronauts and their space agencies. Hang Time will offer a four-week stay for an astronaut on a orbiting facility, including Bigelow-provided training and transportation. The service would cost governments $14,950,000 in 2012 dollars, the year he said the company planned to begin offering the service. An extra four weeks on a station could be purchased for an additional $2,950,000.

What would these astronauts do on orbit? Bigelow said the ability to do something productive will be critical for attracting customers. “We’re going to give them opportunities so that when they’re hanging there, they’re not just doing somersaults,” he said. “Their country has sent them there not only to gain experience in LEO and in a microgravity environment, but they’d also like to accomplish something at the same time.” To support that, the modules can be outfitted with experiments they can perform, and, in addition, “some quantity” of the customers will also be able to perform an EVA at no additional cost during their stay. In an odd break with the more serious aspects of government space missions, though, Bigelow added that there would be “games and challenges and contests” for astronauts to participate in “to keep it interesting for them.”

Sovereign clients will get four weeks on a Bigelow station, training and transportation included, for just under $15 million.

The other class of customers, prime clients, would lease individual modules for some period of time for their own research or other purposes. A full-scale module, with 300 cubic meters of volume, would cost $88 million a year or $7.9 million a month to lease; half a module would cost $54 million a year or $4.5 million a month. Bigelow would provide its own professional astronauts to carry out work on the modules, or train the customer’s own employees to work there. Bigelow would handle all the maintenance and hardware upgrades for the lessee’s module and protect the confidentiality of the lessee’s intellectual property.

These business arrangements would be structured much like ordinary real estate leases that both he and his potential customers are already familiar with. “We’re used to thinking about long-term leases for major corporations for regional shopping centers and eight-story office buildings,” Bigelow said. “We’re used to thinking like that. We know what those documents say from a legal context.” One advantage to leasing rather than selling modules, he added, is that the modules would then stay under US legal jurisdiction regardless of the customer.

What sorts of companies would be likely prime clients? Bigelow ticked off a list of “the usual cast of characters that we’ve all heard about for years”, including high-tech, biotech, pharmaceutical, and other life sciences, and perhaps expanding to the entertainment and automotive industries. Automotive? “The automobile industry has some very sophisticated laboratories, so you would think they would care” about using a Bigelow module, he claimed.

The mention of entertainment, though, brings the discussion around full circle to the possibility that space tourism companies could become prime clients, leasing modules for their use as space hotels. Bigelow didn’t rule that out. “Our modules can accommodate a wide variety of uses, including space hotel businesses,” he said, “and we’d be happy to talk with those folks about that.”

Alex Tai, vice president of operations for Virgin Galactic, spoke on the same panel as Bigelow during a symposium session two days later. After Bigelow suggested again that space tourism companies might be potential customers for his modules, Tai said that a hotel in space might be a great addition to the Virgin Group’s existing terrestrial resorts. “We can certainly look into that.”

Building up the infrastructure

Before Bigelow can start accommodating sovereign and prime clients—although not necessarily before he can start selling services to them—the company needs to develop its infrastructure. That effort started last year with the launch of the Genesis 1 test module; a second, similar one, Genesis 2, is slated for launch late this month on a Dnepr rocket from Yasny Launch Base in Russia. Genesis 2 carries additional cameras and sensors to monitor and characterize the environment of the module, as well as commercial payloads: photos and small items individual customers have paid to be flown in the module as part of the company’s “Fly Your Stuff” project.

The next major milestone will come in 2010, with the launch of the Sundancer module. Sundancer will not be quite as large as Bigelow’s planned full-scale modules, with an interior volume of 175 cubic meters, but it will be able to accommodate three people. There will be a “trial period of a number of months” to test the module’s various subsystems, Bigelow said, before any crews were sent to the module.

After a docking node and propulsion bus is added to Sundancer in 2011, the first full-scale module will be launched in 2012 and attached to the docking node alongside Sundancer. The full-scale “standard” module, designated the BA 330, will be designed to host six people, although to maintain additional margin the capacity might be limited to five people. A second standard module would be launched in 2013, completing the first overall complex.

By the time Bigelow Aerospace opens its first outpost, in 2012, the company will already have a corps of 14 astronauts.

Bigelow Aerospace plans to continue launching standard modules after this, but will set up separate complexes rather than expanding the first one. One reason for creating separate complexes is to place them in different orbital inclinations so that they can be reached by different transportation providers. Another reason, he said, is to keep different customers from interfering with each other. “We already know that Hang Time users will not co-mingle well” with prime clients, he said. Prime clients that are competing against one another in the same industry could also be placed on different complexes to avoid potential problems.

In addition to the space infrastructure, Bigelow Aerospace will have to build up its terrestrial infrastructure. “We are ramping up our company to prepare for this,” he said. This includes, by 2010, an additional 200,000 square feet (18,600 square meters) of factory space at its Las Vegas plant, enough to churn out two modules a year. The company will also be augmenting its communications systems, which currently consist of ground stations in Alaska, Hawaii, and Nevada.

Bigelow will also create its own astronaut corps, who will serve as pilots on ferry flights to and from the outposts and also crew on the outposts themselves. These astronauts will also train the sovereign clients and any payload specialists for the prime clients. When the first complex is ready for customers in 2012 “we will need, by that time, 14 astronauts on our payroll.”

Transportation and other challenges

A business plan as large as Bigelow’s will require a large amount of launch services to both deploy the modules and to send crews to and from them. Bigelow anticipates being a major customer for anyone that can send humans into space, with demand ramping up significantly once the first complex is completed. Bigelow anticipates requiring 13 launches in 2013, increasing to 25 in 2015 and 30 in 2017, the last year for which he provided launch projections at the press conference.

That is a significant number of launches for an industry that has conducted, on average, only about 60 orbital launches a year so far this decade of any kind—commercial or government, manned or unmanned. Bigelow said he understands this, calling transportation at various times a “wild card” and “the long pole in the tent”. He indicated that he would hold off on plans to launch full-sized standard modules if there was not sufficient transportation available to make them economically feasible. “Those [modules] will stay on the ground if we’re not able to afford what people are offering or because they’re impracticable in some kind of way,” he said.

Given his demand, one wouldn’t expect Bigelow to be too picky about what launch services are offered to him. However, he said he did have a set of parameters for launch services. One requirement is the ability to carry six to eight people, and cargo, at a time; one seat would be taken up by a Bigelow pilot and other seats might be needed for company crews being rotated in and out of the complexes. Another characteristic he highlighted, peculiarly, is the requirement that spacecraft perform dry landings rather than splash down in oceans. “We like the idea that once you have a dry landing the experience is pretty much over,” he explained. “If you land in the ocean that’s not necessarily the case. That bothers us.”

“It’s not so different from the real estate world,” Bigelow said. “We have a business plan that Wall Street understands easily, as does the whole banking community.”

Bigelow’s plan also faces risk because the launch costs have been factored into the costs of his overall service when he doesn’t know who will provide the service, and for how much. Bigelow has had some discussions with potential providers; Rocketplane Inc. announced last month that it has signed a letter of intent with Bigelow to provide flight services using its K-1 vehicle starting in 2012. Given that the K-1 and other potential vehicles, like SpaceX’s Dragon, are still under development, there’s no guarantee they’ll be available when Bigelow needs them and at an acceptable cost. “We’ve tried to accommodate a pricing that is probably in the upper end of the scale” of what is likely to be offered, he said. “Obviously we’re going to be attracted to transportation providers that essentially provide the same kind of safety and provisions at a lesser figure.”

Another challenge that Bigelow only briefly addressed is the size of the market. There’s at least anecdotal evidence that countries without indigenous spaceflight capability are interested in flying astronauts, given the number of guest astronauts and cosmonauts that have flown on Shuttle and Soyuz missions (a trend that continues to this day, with guest cosmonauts from Malaysia and South Korea scheduled to fly to the ISS on Soyuz taxi missions in late 2007 and early 2008, respectively.) Bigelow mentioned that there might be “50 to 60 countries” he considers likely customers for the sovereign client program. However, he gave no estimate as to the number of potential prime clients—a significant issue, given the limited interest today in microgravity research by corporations.

Bigelow said they are only now starting to talk with potential customers. “We haven’t talked with anybody yet,” he said, but added he had a meeting scheduled for later in the week. “You guys are the first ones we’ve exposed this to,” he added, referring to the several dozen reporters and conference attendees who gathered for the press conference. “You’re the guinea pigs.” The company is putting together a business development team to start marketing the service later this year.

Beyond the transportation and market issues, though, there is another familiar obstacle: money. Bigelow said he’s spent $95 million on his company to date. “The good news about that is that it’s come out of operating net income,” he said. However, he acknowledges that he’ll need to spend substantially more money over the next several years to build up his infrastructure to the point where he can accommodate paying customers. “We have some ideas in terms of capital formation,” he said. “It’s not so different from the real estate world. We have a business plan that Wall Street understands easily, as does the whole banking community.”

While his challenges are significant, his ambitious are equally large. “Our goal is to be the Hudson’s Bay Company of commercial space,” he said during a panel session at the symposium. The Hudson’s Bay Company, at one point, controlled a huge swath of North America and all the commerce within it before ceding its territory to Canada in the latter half of the 19th century. Big plans, indeed.