Blue Origin Pivots to the Moon

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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.

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.

Days before the announcement about New Shepard, Blue Origin announced its Terawave project, which we explored in The Bleeding Edge – Catching SpaceX.

Terawave is an enterprise-focused business designed to be an alternative to what SpaceX’s Starlink satellite constellation can do.

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.

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…

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.

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