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WHEN: Today, Thursday, December 13, 2018
WHERE: CNBC's "Power Lunch "
The following is the unofficial transcript of a CNBC interview with Virgin Group Founder Sir Richard Branson and Virgin Galactic CEO George Whitesides on CNBC's "Power Lunch" (M-F 1PM – 3PM) today, Thursday, December 13th. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2018/12/13/watch-cnbcs-full-interview-with-virgin-group-founder-sir-richard-branson.html.
All references must be sourced to CNBC.
KELLY EVANS: Virgin Galactic just reached a milestone today. It launched a space craft to the edge of space. Morgan Brennan live at the Stock Exchange with more. Morgan.
MORGAN BRENNAN: Hey Kelly, that's right. It was a big day for Virgin Galactic. It was also a big day for the space industry overall. This is after the company's rocket powered VSS Unity Space plane reached an altitude of more than 51 miles, which according to the Air Force's definition is where space begins. Traveling at mock 2.9 on the way up, nearly three times the speed of sound. So Virgin Galactic's pilots today technically become the first people to launch from American soil to space since the space shuttle program ended in 2011. They're also the first astronauts to do so via a commercial company. Keep in mind that's based on the altitude at which the government awards astronaut wings. The more commonly accepted definition for space actually starts at the Karman Line, or about 62 miles. Nonetheless, big mission today. It was a big feat. And it was a key test for Virgin, which already touts more than 700 reservations at $250,000 a ticket, and putting it on track to begin the commercial trips next year. And really, especially as we look at 2019, ushering in a long awaited age of space tourism. Tyler.
TYLER MATHISEN: Alright Morgan, thank you very much. Let's take you now to the Mojave Desert where Virgin Group founder and entrepreneur, and philanthropist, Richard Branson – and the possessor of probably the most interesting Instragram account I've ever seen, he is the founder of Virgin Galactic, CEO George Whiteside is standing by. Richard Branson is there. Sir Branson, welcome. And gentlemen, we're glad to have you with us. So Richard, let me ask you: we heard what you all did today. Congratulations on that accomplishment. How many more test flights like this will you need and the bottom line question is how soon do you think you can begin commercial flights into space?
RICHARD BRANSON: Yeah, so obviously an historic day. We've got a lot of people with big smiles on their faces here in Mojave Desert. The spaceship has landed. It will go through its tests to see whether anything needs to be altered or changed. It will then do another flight into space when those tests are finished. It will then go through another series ever tests, another flight into space, another series of tests, another flight into space. And then – roughly then, we'll be able to move the whole operation to New Mexico where we've got a beautiful space for it. And I will then go up. And again we'll do another series of tests. And if every box is ticked, we'll then be able to start taking members of the public up.
TYLER MATHISEN: And when do you think that date might be? In other words, tell me two things: when do you think your ride might occur and when do you think the first public flights might occur?
RICHARD BRANSON: Well, I always get these estimates wrong. It has been 14 years to get to this stage. I thought that it would be seven. So – but, you know, if you really push me to make a guess, I would hope that sometime in the middle of next year I'll be going up. And then quite soon after that, the public will go up. And we're building here in Mojave – which is two new spaceships. So in the not too distant future, we'll have three spaceships operating from New Mexico taking people up.
MELISSA LEE: George, the ticket price is estimated to be between $200,000 and $250,000 USD. Is this the cost of going into space? Are you going to be actually making money at these prices?
GEORGE WHITESIDES: Yeah, I think that it's going to be a fantastic business. There are so many people and today we're just getting interest from all over the planet from people that want to go to space now that they see it as a reality. I think I wouldn't be surprised if in the near term prices may even go up a bit. But long term I think Richard's vision is to bring those prices down and I think that that's exciting. It gives more people a chance to fly to space.
TYLER MATHISEN: What is the tougher part, George? Getting into space or getting back from it?
GEORGE WHITESIDES: I think the tougher part is building the spaceship. But I mean, honestly both parts are really important. And we think we have an architecture that's sort of engineered from the start to be safe at each piece. You know, so we have a soft rocket motor, we use a reentry technique that is patented, and obviously it's an air launch system.
MELISSA LEE: Sir Richard, if we can switch gears here, I'd like to talk about what is going in the United Kingdom and Brexit. What is your hope for Brexit and the outcome? And if you had it your way, would you put it back up for a referendum to the public?
RICHARD BRANSON: A hard Brexit would be more damaging to Great Britain than almost in the Second World War. It will be – it will torpedo a lot of British companies. Virgin Companies I know would suffer dramatically from a hard Brexit. So, but -- so we're hopeful that those 60 Brexiteers will be outvoted in the House of Commons and ultimately I do think that it should be put back to the British public when all the facts are known for another vote. The facts they were given at the last referendum were very misleading. It now should be apparent to anybody who lives in Britain how painful a Brexit will be and you know, personally I would just love to see us to, you know, get rid of all talk of Brexit, get back into the European Union as the biggest trading partner in the world and put all this behind us as a lesson learned.
TYLER MATHISEN: What were some of the misleading facts, Sir Riachard, and what will specifically the consequences be if there is a hard Brexit or if the UK exits without a quote deal?
RICHARD BRANSON: Well let's just give one hard misleading fact. Big buses are all over Britian saying that the NHS is going benefit by hundreds of millions of pounds. It is very, very obvious now that what actually Brexit will do is cost Britain billions and billions and billions of pounds. So a hard Brexit, if I just give you one example, Virgin Atlantic, one of our airlines, we've already been torpedoed by the pound dropping from 1.55 to the dollar to you know, 1.23, 1.24 to the dollar. That's meant -- all our costs are in dollars, so maintenance costs, leasing costs are all in dollars. So costs have gone soaring. The amount of travelers -- it is very expensive now for somebody from Britain to go overseas. If we had a hard Brexit, the pound will drop to parity with the dollar and no one is going to be able to afford to travel overseas and it would be devastating. And that's just one company -- one company's example of the kind of damage it can do.
TYLER MATHISEN: Sir Richard, you are a charismatic historic entrepreneur and I'm given to think of one with whom you compete in some ways and that is Elon Musk, who is himself a charismatic audacious entrepreneur as you are. What do you think of him?
RICHARD BRANSON: Look, I've got enormous respect for Elon. You know, I suppose I see him as a young version of myself, and, doing extraordinary things. And he will continue – you know he is young, he will continue to do extraordinary things for many, many years to come. The only bit of advice I would give him is, you know, not to burn himself out. You know, delegate, surround himself with really good people. And you know, a bit like with Trump, don't Tweet -- you need an editor to check on your Tweets. I think it can be quite dangerous at you know 3:00 in the morning you shoot out a Tweet. But I think -- I suspect he realizes that. And -- but by and large, an extraordinary individual.
TYLER MATHISEN: Good advice for all of us there. George Whitesides, congratulations on your success today. Sir Richard Branson, thank you for being with us and congratulations as well.
RICHARD BRANSON: Thank you.
GEORGE WHITESIDES: Thanks.
RICHARD BRANSON: Cheers.
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