Investment Club - The Rio Club

Virgin Galactic will help train astronauts for NASA

SpaceX won't be the only private company bringing people to the International Space Station. Virgin Galactic announced Monday that it has signed a deal with NASA to train private astronauts and coordinate potential trips to the ISS.

Shares of Virgin Galactic (SPCE) soared more than 10% on the news. The stock has surged nearly 45% so far in 2020, largely due to optimism about demand for private space travel, even though it continues to lose money.

As part of Virgin Galactic's deal with NASA, the company will "develop a new private orbital astronaut readiness program," it said in a statement.

"This program will include identifying candidates interested in purchasing private astronaut missions to the ISS, the procurement of transportation to the ISS, on-orbit resources, and ground resources," the company added.

Virgin Galactic will likely need the services of SpaceX or aerospace giant Boeing (BA), which is developing the Starliner space capsule and has invested $20 million in Virgin Galactic, to actually get astronauts to the space station.

Virgin Galactic's own SpaceShipTwo is a suborbital spaceplane that is incapable of making it to the ISS, and the company has only sent five people to space on two suborbital test flights. The company says it has already received about 600 reservations for suborbital flights at the approximate price of $250,000 per seat.

But Virgin Galactic said it will use it existing suborbital plane for training flights, noting in the press release that the company's "existing space experiences could play an important role in the training for orbital travel, allowing passengers to become familiar with the environment in space, such as G-forces and zero-G."

The enthusiasm for Virgin Galactic's business has even spread to other parts of the stock market. There's even an ETF with the ticker symbol of UFO (UFO) that invests in companies catering to the business of space travel and exploration. Virgin Galactic is a top holding in the fund.

In addition to Richard Branson's Virgin Galactic and Tesla (TSLA) CEO Elon Musk's SpaceX, Amazon (AMZN) CEO Jeff Bezos has a rocket company called Blue Origin working on getting tourists into space.

Virgin Galactic will train candidates for missions to the ISS and added that these trips could range from private citizens to government-backed scientific and technological research missions.

The company did not mention how it intended to transport any astronauts that it trained to the space station Virgin Galactic was not immediately available for further comment. The company also did not disclose any financial terms of its deal with NASA.