August 2017
Case
HBS Case Collection

Spaceport America, Public Sector Risk-taking, and Political Accountability

By: Matthew Weinzierl and Angela Acocella

Format:Print
| Language:English
| Pages:24

Abstract

Sitting quietly in the heart of the New Mexico desert in the summer of 2014, Spaceport America (SA) housed little of the activity its supporters anticipated when opening its hangar doors in 2011. Despite $1 million in annual rent from Virgin Galactic, British billionaire Richard Branson’s space tourism company and SA's anchor tenant, the spaceport was still heavily reliant on government funds. Flight delays and a crash on Halloween of 2014 that left one pilot dead and stalled Virgin Galactic’s testing and development meant that the New Mexico Spaceport Authority (NMSA) was not receiving critical user fees to run spaceport operations. As a result, state and local taxpayers were bearing much of the cost of the underutilized spaceport, even after having invested $218 million from local and state funds. With the 2015 session of New Mexico’s congress looming, the fate of the world’s first "purpose-built" spaceport was in question.

Keywords

Risk and Uncertainty; Public Sector; Business and Government Relations; Aerospace Industry; New Mexico

Citation

Weinzierl, Matthew, and Angela Acocella. "Spaceport America, Public Sector Risk-taking, and Political Accountability." Harvard Business School Case 718-015, August 2017.