White Knight Courts Virgin

When Sir Richard Branson first started a 70-mile club for the rich and extremely adventurous, it felt to me like Pan Am all over again; an eccentric rich guy selling tickets to suborbital space, rather than the Moon. But now Branson's starry-eyed dream is beginning to look real.

On Monday, Branson's space venture -- Virgin Galactic (great name) -- unveiled WhiteKnightTwo, which will act as a carrier for SpaceShipTwo, a suborbital vessel built by Scaled Composites. This, by the way, is same group that led the design of SpaceShipOne, which won the $10 million Ansari X Prize in 2004.

Even more interesting: WhiteKnightTwo is a made entirely of composite materials, lightweight alternatives that perform like steel without the weight. Kevlar -- the stuff of bulletproof vests -- is the most common form of composite material. Ceradyne (Nasdaq: CRDN  ) is using composites for its body armor. Boeing (NYSE: BA  ) has considered composite plastics for its 787 Dreamliner.

What stirs my soul as a member of the Motley Fool Rule Breakers team is that, if successfully tested, WhiteKnightTwo will prove that composites are perfectly usable for building high-altitude aircraft. Imagine how that might transform the airline industry.

During the second quarter, UAL's (Nasdaq: UAUA  ) United Airlines spent approximately 34% of revenue on aircraft fuel. AMR's (NYSE: AMR  ) American, Delta (NYSE: DAL  ) , and Northwest are no better off. Modernizing the fleets of each with fuel-efficient aircraft -- planes made of composites -- would be a welcome change.

We investors tend to think of conglomerates when it comes to space. Firms like Lockheed Martin (NYSE: LMT  ) and Rockwell Collins, for example. We're even guilty of this shorthand at Rule Breakers; Orbital Sciences (NYSE: ORB  ) is one of our more recent scorecard winners. What Virgin reminds us in finding its White Knight is that the best investing opportunities are often found in adjacent or unrelated industries.

Put differently: Your Big Bertha, and thereby, your investment in Callaway Golf, wouldn't mean much if it weren't for the space-shuttle material used to make it more pliable.

Blast off with related Foolishness:

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. He hunts for tech's best as a contributor to Motley Fool Rule Breakers, which counts Orbital Sciences as a holding. Get a daily dose of his Foolish musings via this feed for your RSS reader.

The Motley Fool's disclosure policy is go for liftoff.


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  • Report this Comment On July 30, 2008, at 4:37 PM, DNMay wrote:

    Composites weren't invented by Scaled Composites or Branson. They've been around for a long time, year-by-year winning increasing application in all types of airplane including the 787 which IS a mostly-composite airplane - more than "Boeing has considered composite . . .".

    It's taken time for commercial airplanes to be "composite" because of the need to gain experience with it, and develop manufacturing prowess and repair methods. Remember that airliners are large, fly many many hours, and have to be repairable - rather different from other types of plane. The Harrier fighter has had an all-composite wing since about 1970 - but it's small as far as manufacturing process, it's not subject to a pressurization cycle, its design life is about one-tenth that of an airliner - and it may be more tolerable to repair such a structure because the military carries the risk and can probably afford down-time. Imagine what would have happened to an airliner manufacturer if his product lasted three years instead of 30, because he jumped-the-gun on development and proceeded prematurely. So, until now, airliners have used composites only in smaller components such as control surfaces, nose and tail cones, fairings, and tail surfaces.

    With the 787 and A350, I think we've finally gotten there as far as composite-structure airliners. Scaled Composites has been experts in the composite arena, and inspired designers in other ways, but they haven't had to address airline and airliner needs. You're not adding anything by suggesting that it's now time for airliner manufacturers to turn to composites - because they have been and are. Taking in the whole scope of airliner development (i.e., thinking beyond composites), manufacturers have brought fuel-burn down year after year, so it's not a "welcome change" to modernize fleets to burn less fuel. It's been happening for a hundred years, and it's much of the raison d'etre for each new generation of airplanes.

  • Report this Comment On January 02, 2010, at 11:06 PM, ashishy wrote:

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