Virgin Galactic resumes ticket sales but delays start of commercial service

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WASHINGTON — Virgin Galactic announced Aug. 5 it is restarting ticket sales at significantly higher prices but won’t begin flying its existing suborbital space tourism customers until the second half of next year.

As part of its quarterly financial results, the company said it was immediately starting ticket sales, which had been suspended for several years. Those who signed up to the company’s “One Small Step” program, paying a $1,000 deposit, will have the first opportunity to buy seats on future suborbital spaceflights.

The announcement was not unexpected since company officials previously said they would resume ticket sales once the company’s founder, Richard Branson, flew to space on SpaceShipTwo. Branson was on SpaceShipTwo’s latest flight July 11 from Spaceport America in New Mexico.

What was new was the price: starting at $450,000, far above the $250,000 the company had been charging before suspending ticket sales. The company will offer individual seats, multiple seats on the same flight and entire flights. “$450,000 is the beginning price,” Michael Colglazier, chief executive of Virgin Galactic, said in an earnings call. “If someone wants to purchase a full flight, and buy out all the seats on the flight, there will be a modest premium that goes against that.”

Colglazier suggested that ticket sales will be open for a limited time as the company attempts to control the demand for seats versus the supply of flights. He said only that the company expected to sell a “meaningful” number of seats but did not offer a more quantitative estimate.

Virgin Galactic has pushed back when both existing and new customers will start flying. Earlier this year, it anticipated beginning commercial service in early 2022 once both its current SpaceShipTwo vehicle, VSS Unity, and its WhiteKnightTwo carrier aircraft, VMS Eve, complete a maintenance period scheduled to start in the fall.

That maintenance period will begin immediately after the next SpaceShipTwo flight, scheduled for late September under a contract with the Italian Air Force. However, that maintenance period will last several months longer than previously expected.

“Currently, Eve and Unity have been flying on low-rate intervals, and that cadence is throttled by the amount and frequency of maintenance and inspection work that is performed after each flight,” Colglazier said. “Finding a path to enable moderate flight rate intervals from our existing ships has been a key priority.”

During that maintenance period, Virgin Galactic will make changes to VSS Unity to shorten turnaround times from seven to eight weeks now to four to five weeks. WhiteKnightTwo will undergo upgrades “adding durability to the ship,” he said. The plane currently can go only about 10 flights before major inspections and maintenance; the upcoming work is designed to stretch that out to as many as 100 flights.

“The opportunity to have Eve fly on a much more frequent basis is very powerful and it is clearly the right thing to do for the business. The question is now versus later,” he said. The company concluded doing it now, before the start of commercial operations, was less disruptive than waiting. “We don’t want to take Eve down later once we’ve really started to ramp up our private astronaut business.”

With the additional work on WhiteKnightTwo, which will be done at Virgin Galactic’s factory in Mojave, California, the plane will not be ready to resume flights until the middle of 2022. The company will perform a flight test of VSS Unity with a full crew on board in the third quarter, to be followed by the start of commercial flights late in the third quarter.

Virgin Galactic will also begin test flights in the second half of 2022 of VSS Imagine, its first SpaceShipIII vehicle that the company unveiled in March. Colglazier said that work on a second SpaceShipIII vehicle, VSS Inspire, is on hold to focus resources on VSS Imagine, VSS Unity and VMS Eve.

The company is betting its long-term sustainability on a future “Delta class” of suborbital spaceplanes, which would be air-launched from a next-generation aircraft that replaces WhiteKnightTwo. It expects those vehicles to fly more frequently and affordably that current vehicles, allowing the company to increase its flight rate and turn toward profitability.

“The key to our ramp up is really leaning heavily into the Delta class as well as getting motherships that will carry all those spaceships,” he said, declining to provide specifics on production plans and schedules for those vehicles. “Delta class and the new mothership program clearly are important new programs for us as a company and we’ll be aligning our energy towards them.”

Those programs will also require significant amounts of capital, as will other efforts, such as plans Colglazier discussed to develop a “campus” near Spaceport America for training and lodging to support an increased flight rate. The company raised $500 million in July through a sale of stock that will go toward those various efforts.

Virgin Galactic reported only $571,000 in revenue in the second quarter, primarily from flying research payloads on a May flight of SpaceShipTwo. The company had a net loss of $94 million in the quarter.