WASHINGTON — Virgin Galactic will reduce the frequency of flights of its current suborbital vehicle and stop them entirely by mid-2024 because it concentrates resources on the following generation of vehicles.
In a Nov. 8 earnings call, company executives said flights of VSS Unity, which accomplished its fifth business suborbital mission Nov. 2, would move to a quarterly frequency starting with its next mission, Galactic 06 in January. That will be followed by Galactic 07 early within the second quarter.
There may very well be a 3rd mission, Galactic 08, across the middle of the yr, but Michael Colglazier, Virgin Galactic’s chief executive, said the corporate had not decided yet whether to fly that mission before moving personnel and other resources to work on its Delta-class of vehicles.
Virgin Galactic announced Nov. 7 it will be shedding staff and reducing other expenses to pay attention resources on the Delta class, which Colglazier said was key to the corporate’s future. The corporate said in a Securities and Exchange Commission filing that it will be cutting 185 jobs, or about 18% of its current workforce.
That announcement didn’t provide any indications concerning the way forward for Unity, but Colglazier suggested within the earnings call that the corporate had learned what it needed about spaceflight operations and the experience of its customers over the five business flights it carried out between June and November.
“Unity’s flight objectives are to reveal our system, showcase our astronaut experience and supply learnings for our Delta program,” he said. “The full costs to support Unity’s flights surpass the relatively modest monthly revenues.”
“The massive move we’re making here is pivoting the resources which have been put into the Unity flights and redirecting them over to get the Delta ships done with the money now we have readily available,” he said later in the decision.
Colglazier said that for the remaining flights, Virgin Galactic will think about higher revenue opportunities. That features research, which offers more revenue per seat than private astronauts. He said some seats is likely to be sold to non-public astronauts who’re willing to pay a “premium price” of as much as $1 million each, versus the present price of $450,000.
Once Unity flights end, he said company staff who work on the vehicles at Spaceport America in Latest Mexico will go to a brand new factory near Phoenix the corporate expects to finish within the second quarter of 2024 to assist with the assembly of the primary Delta-class vehicles. Doing so, he said, will help with company resources and provides personnel experience with the spaceplanes before test flights begin in 2025.
Those layoffs and other cost-cutting measures, together with a sale of stock in an “at-the-market” deal within the third quarter, should give the corporate enough funding to finish development of the primary two Delta vehicles and start business flights in 2026, the corporate concluded. Virgin Galactic ended the quarter with $1.1 billion of money and equivalents readily available.
He said the corporate projected that the Delta-class vehicles will have the opportunity to fly twice per week, versus the monthly cadence of Unity flights. With the Delta vehicles capable of carry six customers versus 4 on Unity, each Delta vehicle will have the opportunity to supply 12 times as much revenue monthly as Unity.
That is vital, executives said, in enabling the corporate to attain a positive money flow in 2026, with the increased revenues from Delta flights and a discount in expenses from the top of the vehicles’ development.
“We project now we have sufficient capital to construct the revenue-generating assets essential to attain positive free money flow,” said Doug Ahrens, the chief financial officer of Virgin Galactic. He added there remains to be $113 million available in its at-the-market stock offering it could possibly sell for extra funding.
Virgin Galactic reported $1.7 million in revenue within the third quarter from its spaceflight in addition to “membership fees” from customers, and projects $3 million in revenue within the fourth quarter. The corporate had a net lack of $105 million within the third quarter.