Cufflinks and the Caribbean: How Virgin Galactic kept space tourists’ interest and money

The Virgin Spaceship ‘Unity’ touches down in the Mojave Desert, California, after its first free test flight. (AFP)
Updated 13 April 2019
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Cufflinks and the Caribbean: How Virgin Galactic kept space tourists’ interest and money

COLORADO SPRINGS, Colorado: Virgin Galactic’s goal to fly tourists into space as early as this summer is about 12 years later than initially promised by its founder, British billionaire Sir Richard Branson.
But many of its customers, including Gisli Gislason, aren’t sweating it.
Right up there with a few minutes in space on Gislason’s bucket list is his time on earth with other space enthusiasts and Branson, a fellow adrenaline junkie known as much for his globe-trotting stunts as for starting his own airline.
“It’s more than just a trip to space, it’s a huge, ongoing event,” said Icelandic ticket holder Gislason, who has a Virgin Galactic logo tattooed on his arm and bought his ticket to space in 2010. “I’ve already got what I paid for, so I’m just in for a bonus,” he added.
Gislason’s experience is no accident.
Since its early days, Virgin Galactic specifically set out to win customer loyalty, knowing its attempt to become the world’s first commercial spaceline would likely see its share of setbacks. So featuring its top salesman Branson, the company prioritized exclusive experiences for its “future astronauts,” building a community that has stayed loyal through years of pushed deadlines and a fatal 2014 crash. For an interactive version of this story, click https://tmsnrt.rs/2Id1QMH
While waiting for their trip, some since 2004, Virgin ticket holders have been busied with treats on earth: from a custom-created solar eclipse festival in Idaho and test-flight viewings in California’s Mojave Desert to spaceship-shaped cufflinks at Christmas and group excursions to Branson’s private island in the Caribbean, where they can play tennis with the famous entrepreneur and swap design ideas for the spaceflight around a campfire.
“One of our astronauts once said to me, ‘Don’t fly to space, we’re thoroughly enjoying spending all this time going to the game reserve in Africa or Necker Island,’” Branson told Reuters in an exclusive interview.
“That long, drawn out foreplay can be pretty good, the orgasm is quite quick,” he said, laughing.
Ticket holders pay for some of these particularly high-end events, but just cover the travel for others.
“That was a compelling part of the package,” said Mark Rocket, a New Zealander who changed his name nearly 20 years ago and signed up with Virgin Galactic in 2006. “It’s not just about those few minutes in space.”
More than 600 people from 58 countries have put down a deposit for a 90-minute flight priced at $250,000, up from $200,000 in 2013. The first 100 “founders” will partake in a lottery to determine who gets to fly sooner rather than later. The company expects to increase the frequency of the flights as they build up their space fleet over time.
It has collected about $80 million in ticket holder deposits, money which CEO George Whitesides said the company does not use for spaceship development. That funding instead comes largely from the Virgin Group and Abu Dhabi’s Mubadala Investment Group.
Other than stating Branson himself will be on the first scheduled flight, the company has not disclosed which ticketholders will go first – though Branson is considering the possibility of some customers jumping the line for the right price to help pay the bills.
“There is a market out there we believe who would be willing to pay a million dollars to go on an earlier flight, and we’ve got a few slots at that sort of price,” Branson told Reuters.
Signed-up “future astronauts” vary from billionaires to people who remortgaged their homes to pay for the ride, from pop star Justin Bieber to Mary Wallace “Wally” Funk, 80, one of the so-called ‘Mercury 13’ women who in the 1960s passed the same punishing tests as male astronauts before the program’s funding was pulled.
Virgin’s decision to sign up customers long before it developed and tested a commercial spaceship contrasts with Blue Origin, founded by Jeff Bezos, which will only sell tickets for its suborbital flights after it completes its crewed flight tests.
“It would not have been a Virgin company had we squirreled away in secret and built a spaceship without any customers and rolled it out once it was all ready and tested,” said Stephen Attenborough, Virgin Galactic’s commercial director and first full-time employee.
Now, after a crewed SpaceShipTwo test flight to space in December 2018 and another carrying a test passenger in February, Virgin Galactic is inching closer to commercial flight. Blue Origin’s New Shepard rocket has reached space but its first human spaceflight is still targeted for this year, and it has not determined a ticket price or when it will begin taking reservations.
Elon Musk’s SpaceX is also in the race: last year it named Japanese fashion magnate Yusaku Maezawa as its first customer on a voyage around the moon, tentatively scheduled for 2023.
“FUTURE ASTRONAUT” STRATEGY
Virgin Galactic knew that the price tag for its flights, sold in advance to prove that there was a healthy market when there was a product to deliver, would require providing customer service during the wait.
“Right from the start it was obvious to me that if we were going to have customers and we were accepting fairly large deposits, we were going to need to communicate regularly with those people,” said Attenborough.
It was not clear how long the wait for tourist spaceflights might be, with Branson’s timelines shifting: In 2004, Virgin was saying it would offer commercial spaceflights by 2007. By 2012, the plan was 2013.
As deadlines whizzed by, the future astronaut program evolved, organizing group trips from the Farnborough Air Show to the ‘Cradle of Humankind’ fossil site in South Africa.
“That is something that they tapped into and wised up to really early,” said Trevor Beattie, a ticketholder and UK advertising executive working on Virgin Galactic’s marketing campaign. “They created, quite deliberately, a sense of community.”
For some, access to Branson himself upped the experience.
“Isn’t it funny how the wine tastes better when you know the winemaker?” said Matthew Upchurch, a ticket holder and the CEO of Virtuoso, a travel agency network with exclusive rights to sell Virgin Galactic flights in North America.
CRASH TESTS LOYALTY
The biggest test of this carefully built customer community came in 2014, when a test flight crash killed the co-pilot and seriously injured the pilot.
“I remember very well waking up very early on Saturday morning after the Friday accident and wondering what would happen to this customer base,” Attenborough said.
The company reached out to customers by email on the day of the crash, both before and after the co-pilot’s death was known. There was a blog post from Branson on that day, and later, a video message. A subsequent email from the astronaut relations team said that they planned to call every customer individually.
“That was obviously a horrendous day for everybody,” said Branson, adding that his experience of a fatal 2007 Virgin Trains crash in which an elderly woman was killed meant he knew it was important to get to the scene of the test flight accident and “take these things head on.”
In the end, Attenborough said only a “handful” of customers asked for refunds.
An email seen by Reuters from the astronaut relations team three weeks after the crash said it would soon share a program of upcoming activities and trips. It advertised some “gold-dust-like spots” for a “star Galactic team” at the London Marathon – some of the sponsorship money would now go to a memorial fund for the co-pilot who was killed.
After consulting with customers, the company went ahead with one of its planned annual Virgin Galactic trips to Necker Island just a few weeks after the crash.
Now, after years of huge setbacks and surreal highs, Virgin Galactic’s ticketholders are edging closer to their flights. For some, space is still the final frontier.
“I’ve driven a Bugatti at 253 miles an hour, I’ve skied to the South Pole, swam at the North Pole. I’ve done a lot of stuff and the thing I really want to do is fly in space,” said Jim Clash, an adventure journalist and passenger 610.


Saudi Arabia’s private debt market targets over $1.77bn by Q3 2024: report

Updated 24 November 2024
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Saudi Arabia’s private debt market targets over $1.77bn by Q3 2024: report

RIYADH: Saudi Arabia’s private debt market is experiencing significant growth, with eight active funds targeting to raise over $1.77 billion in capital by the third quarter of 2024, according to a new report.

This growth is driven by a sharp rise in investor confidence, with 97 percent of Middle East-based institutional investors now viewing the Kingdom as the most promising market for private debt in the coming year, up from 82 percent in 2023, based on Preqin survey data.

The report, titled “Territory Guide: The Rise of Private Debt Funds in Saudi Arabia 2024,” was published in collaboration with Saudi Venture Capital Co. It highlights the increasing interest from both regional and global investors, fueled by the positive outcomes of the Kingdom's Vision 2030 reforms.

The findings align with the fact that Saudi Arabia accounts for up to 27.5 percent of private debt fund transactions in the Middle East and North Africa region between 2016 and the third quarter of 2024.

In 2022, private debt funds focused on Saudi Arabia raised a record $335 million in total capital, a sharp rise from the $32 million raised by a single fund in 2003.

“This first-of-its-kind report highlights the emergence of private debt funds as a key asset class in Saudi Arabia, driven by the Kingdom’s Vision 2030 and its ambition to diversify the economy,” said Nabeel Koshak, CEO and board member at SVC.

“At SVC, we continue our commitment to support the development of such reports that provide policymakers, investors, and founders with insights and data to inform strategic decisions and policies to nurture the private capital ecosystem further,” Koshak added.

David Dawkins, lead author of the report at Preqin, commented: “Global investment firms are not alone in closely watching the growth and evolution of Saudi Arabia’s nascent private debt industry.”

Dawkins also noted: “For other developing economies in the Middle East and beyond, Saudi Arabia’s success in this area will strengthen the impetus for improving transparency to secure the capital needed for sustainable growth in a net-zero world.”

The study further revealed that among all private debt funds with investments tied to Saudi Arabia that concluded between 2016 and the third quarter of 2024, mezzanine funds accounted for 50 percent of total exposure, with direct lending and venture debt funds closely following at 30 percent and 20 percent, respectively.

Support for startups and small to medium-sized enterprises in the Kingdom is also reflected in the high proportion of venture debt, which represents 75 percent of all funds in the market with Saudi Arabia exposure.

The report also highlighted that private debt marked its second consecutive year as the asset class with the highest proportion of Middle Eastern investors intending to increase their investments in the coming year. Nearly 58 percent of investors expressed this sentiment, up from 50 percent in 2023.

The percentage of investors considering private debt the most promising asset class in the region rose by 12 percentage points, from 31 percent in 2023.

Private debt is expected to further bolster Saudi Arabia’s growing entrepreneurial community as the nation advances toward its Vision 2030 goals. Since 2018, new regulatory frameworks have been implemented, ushering in an era of increased transparency and equity within the private debt sector, closely aligned with the Kingdom’s broader investment vision.


Closing Bell: Saudi main index rises to close at 11,864 

Updated 24 November 2024
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Closing Bell: Saudi main index rises to close at 11,864 

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 24.38 points, or 0.21 percent, to close at 11,864.90. 

The benchmark index recorded a trading turnover of SR4.22 billion ($1.12 billion), with 124 stocks advancing and 99 declining. 

The Kingdom’s parallel market Nomu also posted gains, climbing 345.06 points, or 1.13 percent, to close at 30,885.34, as 49 stocks advanced and 32 declined. 

The MSCI Tadawul Index increased by 4.74 points, or 0.32 percent, to close at 1,491.56. 

The best-performing stock of the day was Arabian Contracting Services Co., whose share price surged 9.97 percent to SR167.60. 

Other notable gainers included Saudi Reinsurance Co., rising 4.97 percent to SR45.45, and Saudi Public Transport Co., which climbed 3.98 percent to SR23.00.     

Al-Baha Investment and Development Co. led the decliners, falling 6.06 percent to SR0.31. Aldrees Petroleum and Transport Services Co. dropped 4.33 percent to SR123.60, and Batic Investments and Logistics Co. declined 3.23 percent to SR3.59. 

Leejam Sports Co. announced the opening of four new fitness centers. These include a men’s center and the first ladies’ center in Al-Rass city, Qassim Province, as well as the first men’s and ladies’ centers in Al-Qunfidah city, Makkah Province.  

Branded under “Fitness Time” and “Fitness Time - Ladies,” the centers will feature state-of-the-art facilities, high-spec sports equipment, and modern designs. 

The financial impact of these openings is expected to reflect in the fourth quarter of 2024. Despite the announcement, Leejam Sports Co. closed the session at SR180, down 0.34 percent. 

Obeikan Glass Co. reported a net profit of SR29.89 million for the nine months ending Sept. 30, a 58.3 percent drop from the same period in 2023. The decline was attributed to lower average selling prices due to global market conditions and increased administrative expenses related to a new investment in a subsidiary, Saudi Aluminum Casting Foundry.  

The stock ended at SR49.60, down 1.59 percent. 

United Mining Industries Co. announced the issuance of two exploration licenses for gypsum and anhydrite ore from the Ministry of Industry and Mineral Resources. The company plans to conduct studies to determine the availability of raw materials, with financial impacts to be announced upon completion.  

Its stock closed at SR39.60, up 0.26 percent.


Morgan Stanley receives approval to establish regional HQ in Saudi Arabia

Updated 24 November 2024
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Morgan Stanley receives approval to establish regional HQ in Saudi Arabia

RIYADH: US-based investment bank Morgan Stanley has been granted approval to establish its regional headquarters in Saudi Arabia, as the Kingdom continues to attract international investment.

This move aligns with Saudi Arabia’s regional headquarters program, which offers businesses various incentives, including a 30-year exemption from corporate income tax and withholding tax on headquarters activities, as well as access to discounts and support services.

Saudi Investment Minister Khalid Al-Falih confirmed the progress of this initiative in October, stating that the Kingdom has successfully attracted 540 international companies to set up regional headquarters in Riyadh—exceeding its 2030 target of 500.

“Establishing a regional HQ in Riyadh reflects the growth and development of Saudi Arabia and is a natural progression of our long history in the region,” said Abdulaziz Alajaji, Morgan Stanley’s CEO for Saudi Arabia and co-head of the bank’s Middle East and North Africa operations, according to Bloomberg.

Morgan Stanley first entered the Saudi market in 2007, launching an equity trading business in Riyadh, followed by the establishment of a Saudi equity fund in 2009.

This approval follows a similar move by Citigroup earlier this month, with the bank also receiving approval to establish its regional headquarters in Saudi Arabia.

Fahad Aldeweesh, CEO of Citi Saudi Arabia, emphasized that this development would support the firm’s future growth in the Kingdom.

Goldman Sachs, another major Wall Street bank, also received approval in May to set up its regional headquarters in Saudi Arabia.

Prominent international firms that have already established regional headquarters in Saudi Arabia include BlackRock, Northern Trust, Bechtel, PepsiCo, IHG Hotels and Resorts, PwC, and Deloitte.

In addition, a recent report from Knight Frank noted that Saudi Arabia's regional headquarters program has led to increased demand for office space in Riyadh, with the city’s office stock expected to grow by 1 million sq. meters by 2026.

In August, Kuwait’s Markaz Financial Center echoed this sentiment, predicting a significant uptick in the Kingdom’s real estate market during the second half of the year, driven by the regional headquarters program.


QatarEnergy strengthens global footprint with offshore expansion in Namibia 

Updated 24 November 2024
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QatarEnergy strengthens global footprint with offshore expansion in Namibia 

RIYADH: QatarEnergy has expanded its portfolio through a new agreement with TotalEnergies to increase its ownership stakes in two offshore blocks in Namibia’s Orange Basin. 

According to a press release, the state-owned energy firm will acquire an additional 5.25 percent interest in block 2913B and an additional 4.7 percent interest in block 2912 under the new deal, subject to customary approvals.  

Once finalized, QatarEnergy’s share in these licenses will rise to 35.25 percent in block 2913B and 33.025 percent in block 2912.  

Saad Sherida Al-Kaabi, Qatar’s minister of state for energy affairs and CEO of QatarEnergy, said: “We are pleased to expand QatarEnergy’s footprint in Namibia’s upstream sector. This agreement marks another important step in working collaboratively with our partners toward the development of the Venus discovery located on block 2913B.” 

TotalEnergies, the operator of both blocks, will retain 45.25 percent in block 2913B and 42.475 percent in block 2912. Other partners include Impact Oil & Gas, which holds 9.5 percent in both blocks and the National Petroleum Corp. of Namibia, which owns 10 percent in block 2913B and 15 percent in block 2912.   

Located about 300 km off the coast of the African country, in water depths ranging from 2,600 to 3,800 meters, these blocks host the promising Venus discovery. The Venus field has attracted considerable attention as a significant find that could impact Namibia’s energy future.  

This offshore acquisition complements QatarEnergy’s recent ventures into renewable energy. In October, the company announced a 50 percent stake in TotalEnergies’ 1.25-gigawatt solar project in Iraq.  

The initiative, part of Iraq’s $27 billion Gas Growth Integrated Project, aims to enhance Iraq’s energy self-sufficiency by addressing its reliance on electricity imports and reducing environmental impacts.   

The solar project, set to deploy 2 million bifacial solar panels, will generate up to 1.25 GW of renewable energy at peak capacity, supplying electricity to approximately 350,000 homes in Iraq’s Basra region.  

QatarEnergy will share equal ownership of the project with TotalEnergies, which retains the remaining 50 percent. 

The firm’s dual focus on traditional and renewable energy highlights its strategic approach to meeting global demands while addressing sustainability concerns.  

Its involvement in Namibia’s offshore blocks and Iraq’s shift toward renewable energy highlights a well-rounded portfolio that includes fossil fuels and clean energy investments. 


GCC lending growth hits 3.1% in Q3, Saudi Arabia leads: report

Updated 24 November 2024
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GCC lending growth hits 3.1% in Q3, Saudi Arabia leads: report

RIYADH: Listed banks in the Gulf Cooperation Council achieved their highest lending growth in 13 quarters, with loans rising 3.1 percent to $2.12 trillion in the third quarter.

According to a report by Kamco Invest, Saudi Arabia led the surge with a 3.7 percent quarter-on-quarter increase in gross loans, marking its fastest growth in nine quarters.

Qatar followed with a 1.9 percent rise, while Bahrain recorded a 1.2 percent increase.

This growth aligns with the International Monetary Fund’s projection of 3.5 percent nominal gross domestic product growth for GCC nations in 2024, driven by the strong performance of non-oil sectors in the UAE, Qatar, Bahrain, and Saudi Arabia.

The region’s commitment to diversification and long-term infrastructure development continues to drive its financial sector.

 Despite record lending levels, aggregate net income for GCC-listed banks increased marginally by 0.4 percent to $14.9 billion.

While total revenues grew 4.1 percent, supported by a 2.8 percent rise in net interest income and a 6.9 percent increase in non-interest income, higher expenses and impairments weighed on profitability.

Loan impairments rose to a three-quarter high of $2.5 billion, with increases in the UAE, Saudi Arabia, Oman, and Bahrain partially offset by declines in Qatar and Kuwait.

Customer deposits across GCC-listed banks reached a nine-quarter high, rising 3.2 percent to $2.5 trillion.

Saudi Arabia led with a 4.6 percent increase, while the UAE maintained its position as the largest deposit market at $828 billion.

Deposits in Oman and Qatar also saw solid growth, contributing to the region’s overall resilience.

The aggregate loan-to-deposit ratio remained stable at 81.4 percent, with Saudi Arabia reporting the highest ratio of 92.8 percent and the UAE the lowest at 69.3 percent, reflecting its strong liquidity position.

The GCC banking sector’s resilience is further demonstrated by its consistent focus on operational efficiency. The cost-to-income ratio declined slightly to 39.9 percent, highlighting the sector’s ability to manage expenses effectively despite rising costs. 

As the region continues to diversify its economy, the banking sector remains a critical enabler of growth, funding large-scale projects and fostering financial innovation.

While rising funding costs and potential interest rate cuts may pose challenges, the sector’s robust fundamentals and strategic focus on non-oil growth position it for sustainable expansion.

The commitment to balancing economic diversification with financial innovation is expected to drive the sector’s continued success, reinforcing its pivotal role in the GCC’s broader economic landscape.