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Virgin Galactic remains on track to restart test flights of its existing spaceships by January, and then begin flying paying passengers to space next spring, the company told investors in a third-quarter earnings call this week.
Assuming there are no new setbacks, that marks an end to a nearly 18-month flight hiatus, during which Virgin Galactic’s engineering teams have worked to upgrade and reinforce its ships at its headquarters in Mojave, California, in preparation for commercial service. That hiatus began in summer 2021, following company founder Sir Richard Branson’s historic flight to suborbit from Spaceport America in southern New Mexico.
But the hiatus, which the company originally expected to last six to eight months, was extended two times since last spring because of delays in completing enhancement work on Virgin Galatic’s VSS Unity passenger rocket, and on the VM Eve mothership, which flies Unity part way to space. That pushed back commercial launch for paying passengers – originally anticipated for summer 2022 – to spring of next year.
But in its latest quarterly earnings call, company CEO Michael Colglazier said Unity’s upgrades are now finished, and enhancement on Eve will end in December.
“VSS Unity is complete and the ship is ready to commence test flights,” Colglazier told investors. “We are tracking to have work on VMS Eve completed in the fourth quarter.”
That paves the way for flight testing to resume in the next couple of months.
“We’re now in the process of completing final flight preparation tests,” Colglazier said. “…We expect the first test flight for Eve to occur in early January, if not before, with the ship returning to its home base in New Mexico thereafter. After the verification test flights of Eve, we will move to a glide flight of VSS Unity, and then to a space flight with Virgin Galactic mission specialists on board.”
If all goes well, the company will start flying paying passengers to space in the spring from the spaceport, beginning with an Italian Air Force crew that will conduct research and training in microgravity. Then, Eve and Unity will launch its long-awaited shuttle for space tourists, carrying up to six paying passengers at a time to suborbit, where they can float for a few minutes in microgravity and observe spectacular views of the Earth below.
“As we approach our launch of commercial service in second-quarter 2023, we recognize what a significant milestone this will be for the team – one that advances our mission to become an astronaut-driven, consumer-facing spaceflight company,” Colglazier said.
The enhancements to Unity and Eve will reinforce both vehicles’ durability and reliability, allowing for less maintenance downtime and greater flight frequency once commercial service begins, according to the company. That should permit the Unity to offer monthly tourist flights to space.
And alongside that upgrade work, the company is preparing its next-generation, “Delta” class rockets, which it expects to begin producing next year at a new facility in Arizona. On Wednesday, the company announced new partnerships with two aerospace companies – Bell Textron Inc. and Qarbon Aerospace – which will build sub-assemblies for the Delta ships.
Virgin Galactic also announced a separate partnership last August with Boeing subsidiary Aurora Flight Services to produce next-gen motherships for the Delta rockets.
The Deltas are designed for assembly-line manufacturing to produce up to six passenger rockets per year, with the first ones ready for service in 2025. Eventually, Virgin Galactic expects to operate a fleet of Deltas in New Mexico, offering up to 400 space flights per year, before building more fleets for service at future spaceports in other countries.
But despite the progress, the company still has many hurdles to overcome, including a new delay in rolling out a second spaceship, the VSS Imagine, which was planned to begin flight testing next year to enter commercial service alongside Unity. That would allow for up to three spaceflights a month, generating critical revenue for Virgin Galactic until the Delta ships enter service.
Company engineers, however, are now squarely focused on getting Eve and Unity back in the air, and on launching Delta production, setting Imagine’s development back until at least 2024, Colglazier told investors.
And that puts more pressure on company finances, already challenged by huge losses as Virgin Galactic pumps hundreds of millions into spaceship development and production.
The company reported another $146 million net loss in the third quarter – up from a $48 million loss in quarter-three of 2021 – although it still has a lot of cash on hand to finance operations, including another $100 million it raised from stock sales since August.
“Our balance sheet remains strong, with $1.1 billion in cash, cash equivalents and marketable securities,” Chief Financial Officer Doug Ahrens told investors.
But many investors are growing skeptical, including Rich Smith, a writer for the investor service The Motley Fool who follows Virgin Galactic on the New York Stock Exchange.
“The earliest they’re promising commercial operations to begin is in six months, with little revenue to offset losses,” Smith told the Journal. “And there’s still plenty that could delay things again going forward.”
The company’s stock remained depressed at $4.84 a share on Friday afternoon. That’s down from a peak of $62.80 in February 2021.