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The announcement was a bit of a surprise. |
| Last week, Blue Origin announced it was shelving the very program the company has been built upon… |
| The company said it will be pausing all New Shepard flights for "no less than two years." |
| Surprising… considering the flawless safety record after 38 successful flights, which carried 98 passengers into space – above the Karman line. |
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| Source: Blue Origin |
| The company has a "multi-year customer backlog" of interested wealthy individuals wanting to experience a few minutes of weightlessness and breathtaking views of Earth. |
| When referring to the cost to fly on a New Shepard, Eric Berger, senior space editor of Ars Technica, said, "I'm pretty convinced it's over $1 million." |
| He estimates the flights range from $2–4 million per seat on a New Shepard flight. |
| At those prices, very few are able to experience the short, suborbital trip to space. But the numbers are telling… |
| The New Shepard is a reusable rocket designed primarily for space tourism and research. There are six passenger seats in each New Shepard. |
| If we assume an average price of $2–3 million, Blue Origin likely generates between $12–18 million in revenue per flight. |
| It's probably enough to cover the operational costs of supporting each launch… |
| But Blue Origin is clearly not generating free cash flow from this endeavor. |
| And with only 38 flights to date, I doubt the business from New Shepard launches moved the needle at all. After all, Jeff Bezos reportedly sells about $1 billion of his Amazon stock every year to fund Blue Origin. |
| So the real driver of the decision to put the program on hold – for at least the next couple of years – wasn't money. |
| Ditching a Distraction |
| The reality is that the New Shepard program was a distraction of Blue Origin resources – those that need to be focused on far more important initiatives. |
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| Terawave is an enterprise-focused business designed to be an alternative to what SpaceX's Starlink satellite constellation can do. |
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| Terawave | Source: Blue Origin |
| Blue Origin, after having seen the incredible success SpaceX has had with Starlink – which generates all of SpaceX's free cash flow to fund research and development for the Starship – decided to build something similar with the same kind of business model. |
| That makes sense. |
| Shuttering the New Shepard flights frees up resources to focus on Terawave and Blue Origin's lunar aspirations. |
| According to Blue Origin, "The decision reflects Blue Origin's commitment to the nation's goal of returning to the Moon and establishing a permanent, sustained lunar presence." |
| The timing of this announcement wasn't a coincidence, either. |
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| Shut It Down |
| Days before Blue Origin's announcement, Elon Musk posted the following on X, indicating the first launch of Starship version 3 will arrive as early as March 9… |
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| And this Monday, NASA experienced another disaster with its ridiculously over-budget Space Launch System (SLS) rocket, which was being readied for its Artemis II mission that was scheduled to take astronauts on a 10-day mission around the moon this month. |
| While being tested on the launch pad, the test had to be aborted around T-5, due to yet another liquid hydrogen leak – similar to what has plagued the SLS rocket over the last three years. |
| This has pushed the Artemis II mission well into March, if NASA is lucky. |
| The continued failure of the SLS program is only making SpaceX's competitive position stronger for all future moon missions. |
| The SLS mission costs billions for each launch and has no reusability. |
| Safety issues continue to plague the SLS… |
| The program should be shut down. It is a complete waste of taxpayer dollars. |
| SpaceX and perhaps Blue Origin can provide the technology to enable lunar missions and ultimately a lunar outpost for a small fraction of the cost of what NASA is doing with SLS. |
| And that's why Blue Origin is pausing its rocket ship rides for the rich and getting down to business, focusing its efforts on the opportunity presented to play a larger role in the exploration of the moon. |
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| Blue Moon Mark 2 (MK2) | Source: Blue Origin |
| Accelerate or Get Left Behind |
| If Bezos and the team at Blue Origin want to be a serious aerospace company and have competitive offerings against SpaceX, this is absolutely the right decision. |
| Given SpaceX's latest announcements – plus its vision to even manufacture on the Moon and launch AI satellites into space using a lunar mass driver – Blue Origin needs to accelerate quickly, or it will be left behind by SpaceX. |
| SpaceX, and hopefully Blue Origin, are building the industries and infrastructure of the future. |
| Not a single aerospace incumbent is anywhere close to what these two companies are capable of doing. |
| They have reinvented the industry from the ground up, so that we can expand the light of human consciousness to the stars. |
| It's time to think and dream big, |
| Jeff |
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