Virgin Galactic Liftoff Delayed Until Spring 2023

Aug. 8, 2022
Virgin Galactic's VSS Unity passenger rocket is nearly ready to fly, but slow-moving upgrades on the carrier craft Eve — which flies Unity part way to space — means another three-month delay for commercial launch, the company announced on Thursday.

Aug. 6—Virgin Galactic's VSS Unity passenger rocket is nearly ready to fly, but slow-moving upgrades on the carrier craft Eve — which flies Unity part way to space — means another three-month delay for commercial launch, the company announced on Thursday.

It's the second time this year Virgin Galactic has postponed its planned tourist rides to suborbit from Spaceport America in southern New Mexico.

In February, the company had said the mothership Eve and Unity would both return to the spaceport this summer following structural enhancements in Caifornia, allowing resumption of test flights by mid-year, and then spaceflights for paying passengers in the fall.

But in May, Virgin Galactic said supply-chain problems and labor shortages slowed the upgrades, setting resumption of test flights back to this fall, and commercial launch until winter in early 2023.

Now, the company says modifications on the mothership are taking longer than expected, forcing yet another delay. That means the ships won't return to New Mexico until early next year, with flight tests resuming in winter 2023, followed by the first passenger trips in the spring of 2023, said company CEO Michael Colglazier during a second-quarter earnings call with investors Thursday afternoon.

"Despite our best efforts, progress on our enhancement program in Mojave — particularly the complex work to prepare Eve for commercial service — has taken longer than we planned," Colglazier said.

Work on Unity is nearly complete, potentially allowing the passenger rocket to return to service faster than the mothership. But upgrades on Eve must first be completed, since the carrier craft is designed to fly Unity on its underbelly to about 50,000 feet, where the six-passenger rocket then breaks away and fires up its motors to shoot into suborbit. That allows space tourists to float for a few minutes in microgravity and enjoy spectacular views of Earth below.

Assuming there are no more delays going forward, Unity is expected to provide monthly tourist flights once commercial service begins, Colglazier said.

But while that may be welcome news for some of the 800-plus Virgin Galatic customers who have already paid for reservations on forthcoming spaceflights, it means only six passengers per month will be able to fly. And the flight rate won't increase until the company's second spaceship, the VSS Imagine, comes into service, potentially paving the way for three rocket rides per month.

Under the new launch schedule, however, Imagine won't even begin test flights until mid-2023, with passenger service now delayed until fall of next year, at the earliest, and possibly until early 2024. That's because the company transferred personnel and resources away from work on Imagine to speed up the needed enhancements on Eve, slowing progress on the second spaceship, Colglazier told investors

"Imagine is a new vehicle, and requires a sequence of planned test flights before it carries private astronauts," Colglazier said. "The variability inherent in flight tests makes it prudent to allow for appropriate schedule flexibility, which could potentially extend Imagine's window of private astronaut service into early 2024."

Laying the spaceflight groundwork

Unity has already flown to suborbit four times with Virgin Galactic pilots and team members, including the history-making flight by company founder Sir Richard Branson in July 2021.

But after Branson's flight, the company announced a hiatus to prepare both Eve and Unity for long-term passenger service, making structural improvements to both ships to increase their durability and allow for rapid turnaround between flights once commercial operations begin.

That's particularly important for Eve, a 14-year-old craft that has flown many times.

Improvements include work on Eve's central wing section to upgrade the pylon that attaches the rocket ship to the carrier plane. That's a time-consuming enhancement that requires new designs by highly skilled engineers, Colglazier said.

Still, despite the slow progress in upgrading the company's existing ships, Virgin Galactic is simultaneously working to build a solid manufacturing base for its next-generation "Delta Class" passenger rockets, and for new motherships to service those rockets.

In July, the company announced a new partnership with Boeing Subsidiary Aurora Flight Sciences to build two more motherships. Aurora will help design and manufacture them, with Virgin Galactic doing final assembly at its facilities in California.

The first one will be ready for service by 2025, just as Virgin Galactic's new Delta ships begin emerging from production.

The company is subcontracting other aerospace firms to build subassemblies for the Delta rockets for final assembly by Virgin Galactic at a new facility it's constructing in Arizona. That plant, to be located adjacent to the Phoenix-Mesa Gateway Airport, will be equipped to produce up to six Delta ships per year, Colglazier said.

"Construction has already started, and we anticipate the facility will be fully operational by late 2023, supporting our goal of rolling out the first Delta ships in 2025," he said.

In addition, last Monday, the company said it acquired land in Sierra County to build a new astronaut campus and training facility for its spaceflight customers and their families.

"It's located in driving proximity to Spaceport America," Colglazier said.

Burning through cash

Eventually, Virgin Galactic expects to conduct up to 400 flights per year out of Spaceport America. But with commercial launch still nearly a year away, and then only a slow ramp up in flights until the Delta ships enter service in 2025, the company is burning through a lot of cash. And it won't start generating any significant revenue until spaceflights begin.

The company reported a net loss of $111 million in the second quarter, up from a $93 million loss in the first quarter.

And as Virgin Galactic invests in new manufacturing facilities and ship production, it projects losses growing to between $110 and $120 million in coming quarters.

Still, the company has a lot of money on hand to cover escalating expenses, said Chief Financial Officer Doug Ahrens.

"Our balance sheet remains strong, with over $1.1 billion in cash, cash equivalents and marketable securities," Ahrens told investors.

The company also announced plans Thursday to sell up to $350 million more in stock.

Its stock price, however, remains markedly depressed, given the continuing delays in commercial launch. The price fell from $8.19 per share on Thursday to $7.02 on Friday afternoon. That's down from a high of $62.80 a share in February 2021.


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