Virgin Galactic again delays start of commercial suborbital flights

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WASHINGTON — Virgin Galactic has once again pushed back the start of commercial flights of its SpaceShipTwo suborbital spaceplane, saying upgrades of its carrier aircraft are taking longer than expected.

In its release of its second quarter earnings Aug. 4, the company said it is now expecting to start commercial flights of its single SpaceShipTwo vehicle, VSS Unity, in the second quarter of 2023. In its previous earnings release in May, the company had delayed the start of such flights from the fourth quarter of 2022 to the first quarter of 2023.

In an earnings call, company executives said that the latest delay was not directly related to supply chain and staffing problems it blamed for the previous delay. Instead, refurbishment work on its WhiteKnightTwo plane, VMS Eve, was taking longer than planned.

“The driver is around the amount of time it is taking us to accomplish the work scope on Eve,” said Michael Colglazier, chief executive of Virgin Galactic. “We did not plan the full amount of time that’s been needed to get this work accomplished.”

The “most acute” issue was work on the central wing section of the plane, where workers were replacing the pylon to which SpaceShipTwo is attached. There are differences between the designs for the plane and what was actually built, he said. There are also limited working environments on the plane that restricts how much work can be done in parallel.

He said there are still staffing issues contributing to delays. That work is taking place at the company’s factory in Mojave, California. “It is a challenged labor market in that area,” he said.

The company has, in the last couple months, shifted people who had been working on VSS Imagine, its second spaceplane, onto Eve. “We need to get Unity back in the air and we to get Eve flying,” Colglazier said.

That shift in workforce will slow down work on Imagine, he said. While the company previously planned to have that in service carrying customers in mid-2023, Colglazier said the company now expects those flights to begin no earlier than the fourth quarter of 2023.

“Imagine is a new vehicle and will require a sequence of planned test flights before it carries private astronauts,” he said. The inherent uncertainty in any campaign of test flights, he noted, “could potentially extend Imagine’s window for private astronaut service into early 2024.”

The company is also changing direction on ticket sales. The company has sold more than 800 seats to date of an initial tranche of 1,000. Colglazier said that the company plans to reserve 100 of the remaining seats to sell for private and government researchers. Most of the rest will be sold through a partnership with Virtuoso, a company that specializes in luxury and adventure travel.

He said the research market “commands a significant price premium” compared to private astronaut tickets that currently sell for $450,000. “We want to seed this. I think this has potential to grow,” he said.

The Virtuoso partnership, he said, is intended to attract customers who don’t identify as space enthusiasts. “A heavy percentage of the people that we have right now are space enthusiasts,” he said. “There is a much, much larger group out there that does very-high-end luxury and adventure travel.”

The company reported a net loss of $111 million and negative adjusted earnings before interest, taxes, depreciation and amortization of $93 million in the second quarter. Those losses were much higher than the same quarter last year, which the company said was from higher research and development costs as it starts development of the new Delta-class of suborbital spaceplanes.

Virgin Galactic has cash and cash equivalents of $1.1 billion as of the end of the second quarter and announced plans to sell up to $300 million in stock. Doug Ahrens, chief financial officer, said in the call the filing to sell the stock was part of “steps to give us financial flexibility going forward.”

The release of Virgin Galactic’s financial results came the same day as its suborbital spaceflight rival, Blue Origin, flew its sixth crewed New Shepard flight. That company has flown 31 people to date, including one person who went on two flights. All those New Shepard launches have taken place since the last SpaceShipTwo suborbital flight in July 2021.