Virgin Galactic delays resumption of commercial flights to 2027
Virgin Galactic says it will not start commercial flights of its new suborbital spaceplane until early 2027, a delay of a few months.
In the company's second-quarter earnings call Aug. 12, Virgin Galactic executives said they now expect commercial flights of their first Spaceship suborbital vehicle to begin in February 2027. In the company's previous earnings call in May, it expected those commercial flights to begin in the fourth quarter of this year.
Michael Colglazier, Virgin Galactic's chief executive, said on the call the delay was not caused by one big issue but instead by many smaller ones during assembly of the vehicle.
"No single issue is driving the schedule push; rather, we have experienced modest time-duration extensions across hundreds of relatively small but important installation tasks involved in the first build of our new spaceship," he said.
That included, he said, cases where components came together "a few thousandths of an inch taller or shorter" than expected, leading to reviews to determine whether that mismatch was within design tolerances or required adjustments.
"The number of those, ‘oh, we didn't expect this to not fit just perfectly' coming in is higher than we had allotted for, and so that just has started to accumulate on us," he said, a trend that accelerated at the end of July. "For a bit we thought we could manage that, but the team just needed more time to do it the correct way."
That work, he said, is wrapping up, and integrated vehicle ground tests are expected to begin later this month. The revised schedule now calls for sending the vehicle to Spaceport America in New Mexico in October to begin a series of flight tests.
The company has brought in more personnel to complete that assembly work, with two shifts of workers seven days a week. That will cause a temporary increase in capital expenditures in the third quarter, said Doug Ahrens, Virgin Galactic's chief financial officer.
However, he said the company is not expecting major changes to its financial projections. With a second spaceship in production and expected to enter service in the second quarter, Virgin Galactic expects to reach a flight rate of at least 10 per month by the end of that quarter, achieving positive quarterly cash flow in 2027.
Virgin Galactic raised $134 million in an at-the-market sale of stock in the second quarter, the last of the stock the company planned to sell through that mechanism. The company ended the quarter with $286 million in cash and equivalents on hand.
That will be sufficient, Ahrens said, to get the company into commercial service. "We don't need additional capital at the moment," he said, but added the company may seek to raise money down the road to accelerate growth of its fleet.
Virgin Galactic also announced during the call that it closed the sale of a tranche of tickets at $750,000 each that the company announced in March. The company originally planned to sell 50 tickets, but Colglazier said high demand led the company to sell additional tickets, bringing total bookings from the tranche to more than $50 million.
"We were oversubscribed by a reasonable amount, and that's great, and so we've closed this price point as we said we would do," he said.
This new batch of customers, he said, includes more groups than in the past, "ranging from multi-generation expeditions of all sorts to research missions to corporate charters and nonprofit bookings."
He said the company will open a new round of ticket sales later this year at a higher price point that he did not disclose. "We're really the only people that will be carrying humans to space beyond if you want to do a 50-plus-million-dollar orbital flight," he said.
He noted that anecdotal evidence indicated that Blue Origin sold suborbital flights on its New Shepard vehicle for somewhere between $1 million and $2 million a ticket, although the company did not disclose ticket prices before suspending New Shepard flights in January for at least two years.
"I don't think we need to be driving our prices up that quickly," Colglazier said, "but there is strong and solid demand, and we do expect each time we release a tranche of tickets, it will be priced higher than the tranche before, and that's appropriate."
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