Richard Branson’s Virgin Galactic Flight Kick-Starts Space Tourism

The company has said the high-profile flight is the latest test of its technology and the first since the Federal Aviation Administration granted it permission last month to fly paying passengers into space. Virgin Galactic has said it expects to start operating such trips next year. For now, Sunday’s flight serves as another potential validation point for a space-tourism industry that will need to attract wealthy passengers as it ramps up.

Human space flight, long the province of government agencies with scientific goals and policy objectives, is drawing fresh interest from investors and companies who see new opportunities to create a space-tourism industry that has long been elusive for commercial enterprises. Billionaires like Mr. Branson,

Amazon.com Inc.

founder

Jeff Bezos,

Tesla Inc. Chief Executive

Elon Musk

and others are betting the demand is there to bring an entirely new business and experience into existence.

“This whole business is to give people a sense of the awe and splendor of space,” Virgin Galactic Chief Executive

Michael Colglazier

said in a recent interview.

Virgin Galactic hasn’t said what it plans to charge for tickets when it resumes sales. The company, which had paused marketing in 2014, took as much as $250,000 in deposits for each future flight, according to its latest annual report. Some analysts believe the company may price tickets at up to $400,000 each. Executives in May said the company would reopen sales around the time Mr. Branson took a flight.

“I have no doubt there is interest in it, I have no doubt that there’s customers that want to do it,” said Ron Epstein, an aerospace industry analyst at Bank of America. “It’s just hard to say how many for how long. It’s just not obvious how big it is.”

Virgin Galactic has characterized interest in its offering as robust and reported it had roughly 600 reservations for future space trips backed by more than $80 million in deposits. In discussing demand, the company last year listed roughly two million people with a net worth of more than $10 million in 2019.

“We believe there’s going to be really great demand. I think you look at the excitement all around the human spaceflight concept, and you see it in multiple players in the market,” Mr. Colglazier said on an investor call in May.

Executives have said Virgin Galactic could generate $1 billion in revenue annually from each spaceport it operates. The company reported a loss of $273 million for 2020.

Mr. Branson’s flight is scheduled to launch from the company’s first such facility, located near Las Cruces, N.M. Once in space, those on board can float weightlessly for a few minutes and peer out of a dozen circular cabin windows to see views of Earth and space that few have ever seen. There are also five windows for the pilots.

Virgin Galactic isn’t alone in trying to build a business based on space flight. Mr. Bezos’ Blue Origin is planning a July 20 trip to space that will include him, his brother and two other people. The company is also eyeing opportunities with government and national-security customers and last year was chosen with partners to develop a lander meant to bring astronauts to the moon as soon as 2024.

Mr. Musk’s Space Exploration Technologies Corp., or SpaceX, has brought astronauts to the International Space Station and back and is working on a moon lander for NASA. However, SpaceX also is planning the first all-civilian mission to space later this year, commanded by

Jared Isaacman,

the chief executive of

Shift4 Payments Inc.

By 2030, space tourism may generate nearly $4 billion in revenue for that year, according to an estimate last year by UBS analyst Myles Walton. That figure includes sales tied to the kind of suborbital space flights—reaching the boundaries of where officials say space begins—that Virgin Galactic and competitor Blue Origin have been working on as well as other types of voyages, like flights around a planet and trips to the moon.

Traveling to space carries risks. The vessels that Virgin Galactic and other space companies are using to ferry humans to space have been tested a fraction of the number of times as commercial planes. In 2014, a Virgin Galactic pilot died testing a company space plane. Safety regulators later said the pilot prematurely unlocked a tail section after the craft fired its rocket engine and as it was approaching the sound barrier, resulting in the craft being torn apart. Another pilot survived.

Joanne Gabrynowicz, a professor emeritus at the University of Mississippi focused on space law, said in general about commercial spacecraft, “We are still talking about transportation vehicles with a very limited track record, and as long as that continues to be the case, it’s important to understand the degree of risk that’s involved in each launch.”

Virgin Galactic’s flight on Sunday will be the 22nd for its VSS Unity spacecraft. Safety is the “foundation of everything we do at Virgin Galactic,” said Mr. Colglazier, the company’s CEO.

Following a test flight in May that saw the VSS Unity reach an altitude of 55.5 miles, the Federal Aviation Administration approved a full commercial space-launch license for Virgin Galactic. Mr. Colglazier said the company reached all of its technical objectives during the May flight, allowing it to home in on how the trips may feel for customers. Mr. Branson’s role on Sunday’s flight is to help the company think through those issues.

Virgin Galactic’s business model is almost entirely focused on space tourism, making the flight Sunday a critical one for the company.

“For Virgin Galactic, they’re putting a lot of eggs in this basket,” said Andrew Chanin, CEO of New York-based ProcureAM LLC, which manages a space-industry exchange-traded fund. “Because so much of their business is focused on space tourism, this is absolutely pivotal for their company’s success or failure.”

—Doug Cameron contributed to this article.

Write to Micah Maidenberg at micah.maidenberg@wsj.com and Benjamin Katz at ben.katz@wsj.com