WASHINGTON – Virgin Galactic will reduce the frequency of flights of its current suborbital vehicle and phase them out entirely by mid-2024 as it focuses its resources on the next generation of vehicles.
In a Nov. 8 earnings call, company executives said flights of VSS Unity, which completed its fifth commercial suborbital mission Nov. 2, will move to a quarterly frequency beginning with its next mission, Galactic 06, in January. This would be followed by Galactic 07 at the start of the second quarter.
There could be a third mission, Galactic 08, around the middle of the year, but Virgin Galactic Chief Executive Michael Colglazier said the company had not yet decided whether it would fly that mission before staffing and other resources to work on its mission Delta would be used. Vehicle class.
Virgin Galactic announced Nov. 7 that it would lay off staff and reduce other expenses to focus resources on the Delta class, which Colglazier said was critical to the company’s future. The company said in a filing with the U.S. Securities and Exchange Commission that it would cut 185 jobs, or about 18% of its current workforce.
That announcement offered no clues about Unity’s future, but Colglazier suggested in the earnings release that the company had learned everything it could about space operations and its customers’ experience in the five commercial flights it operated between June and November needed.
“Unity’s flight goals are to demonstrate our system, showcase our astronaut experience and provide insights for our Delta program,” he said. “The total cost of supporting Unity flights exceeds the relatively modest monthly revenue.”
“The big step we’re making here is to redirect the resources that were put into the Unity flights and redirect them to get the Delta ships ready with the money we have,” he said later in the conference call.
Colglazier said Virgin Galactic will focus on higher revenue opportunities on its remaining flights. This also includes research, which brings in more revenue per seat than private astronauts. He said some seats could be sold to private astronauts willing to pay a “premium price” of up to $1 million each, up from the current price of $450,000.
Once Unity flights end, he said the company’s employees working on the vehicles at Spaceport America in New Mexico will move to a new factory near Phoenix, which the company expects to complete in the second quarter of 2024 to help assemble the first Delta class vehicles. This would conserve the company’s resources and give staff experience with the spaceplanes before test flights begin in 2025, he said.
These layoffs and other cost-cutting measures, as well as the sale of inventory in an “at-the-market” deal in the third quarter, should provide the company with enough funding to complete development of the first two Delta vehicles and begin commercial flights in 2026, closed the company. Virgin Galactic ended the quarter with cash on hand of $1.1 billion.
He said the company expects the Delta-class vehicles to fly twice a week, as opposed to the monthly frequency of Unity flights. Because Delta vehicles can carry six customers (versus Unity’s four), each Delta vehicle can generate 12 times as much revenue per month as Unity.
This was crucial, executives said, in enabling the company to be cash flow positive in 2026 as revenue from Delta flights increased and expenses fell after vehicle development ended.
“We expect to have sufficient capital to build the revenue-generating assets necessary to achieve positive free cash flow,” said Virgin Galactic Chief Financial Officer Doug Ahrens. He added that the stock offering still on the market is $113 million and can be sold for additional financing.
Virgin Galactic reported third-quarter revenue of $1.7 million from its space travel and customer “membership fees” and expects fourth-quarter revenue of $3 million. The company reported a net loss of $105 million in the third quarter.