What's next for Virgin Galactic? CEO discusses flight plans in earnings call - Albuquerque Journal

What’s next for Virgin Galactic? CEO discusses flight plans in earnings call

SpaceShipTwo Unity Flight Test from New Mexico on Saturday, Dec. 12, 2020. The VMS Eve and VSS Unity will reunite for test flights in New Mexico in late winter/spring 2023. (Quinn Tucker for Virgin Galactic)

Virgin Galactic’s mothership, VMS Eve, and the VSS Unity spaceship have reunited at Spaceport America in southern New Mexico for a final round of ground and flight tests before the company’s long-awaited commercial space service begins this spring.

It’s been more than 18 months since the two ships last flew together in July 2021, when company founder Sir Richard Branson joined a Virgin Galactic crew on a flight into suborbit from Spaceport America. Since then, both ships have undergone lengthy maintenance upgrades and enhancements to improve vehicle durability and reliability before initiating tourist flights to space for paying passengers.

But with all modifications now complete, Eve returned to the skies in mid-February for flight tests over the Mojave Desert in California, where Virgin Galactic is headquartered.

And, on Monday, the company flew the mothership back to New Mexico, where it will once again join the Unity spaceship for combined flight tests in the next few weeks, the company announced in an earnings conference call with investors Tuesday afternoon.

“It is great to see our mothership back in the skies, and we are thrilled to have VMS Eve rejoin spaceship Unity back home at Spaceport America,” company CEO Michael Colglazier said in a statement. “With our enhancement program complete and validation flights underway, we remain on track to launch commercial service in the second quarter of 2023.”

What’s next?

Virgin Galactic crews will first conduct a series of ground tests with both vehicles before combining them in joint flight, whereby the mothership carries the Unity to about 50,000 feet. At that point, the rocketship breaks away from Eve and fires up its motors to shoot into suborbit, allowing passengers to float for a few minutes in microgravity and view the Earth’s curvature before returning to Spaceport America.

Those joint flights will start with a glide test, whereby Unity will just float back down to ground after breaking away from Eve.

“Following that, we’ll conclude the validation process with a powered flight to space with a Virgin Galactic crew,” Colglazier told investors. “Then, we expect to commence commercial service in the second quarter, beginning with a research flight for the Italian Air Force and then passenger service.”

The company originally planned for the maintenance hiatus to last just six to eight months, with commercial operations expected to start in mid-2022.

Virgin Galactic’s Unity awaits to take off from Spaceport America in July 2021. (Roberto E. Rosales/Journal)

“It took longer than originally planned, but we’ve now completed the enhancements,” Colglazier said. “That will serve us well for many years ahead.”

The upgrades are designed to make the vehicles more robust for rapid turnaround between flights, potentially allowing Eve and Unity to shuttle paying passengers to suborbit on monthly flights, although it might take some time to reach that pace of activity, Colglazier said.

“We’ll get a couple flights under our belt first,” he said. “We see the path to monthly flights as achievable in short order. We’ll work out the kinks and learn to turn the ships around on a regular basis.”

That’s critical for Virgin Galactic’s long-term financial solvency. It’s been bleeding cash for years through investment in research and development and building operational infrastructure while generating little or no revenue.

Earnings report

In its latest earnings report, the company announced a $151 million net loss in fourth-quarter 2022. That drove total losses last year to $500 million, up from a $353 million loss in 2021.

And the company will continue burning through cash as it builds out its new rocket production factory in Arizona, where it expects to begin assembling a next-generation fleet of “Delta class” spaceships to eventually ramp up commercial service to 400 or more flights per year.

The Delta rockets, however, won’t start flying paying passengers to space until at least 2026, and in the meantime, the company must rely only on Eve and Unity to generate revenue from tourist flights.

This undated photo released by Virgin Galactic shows the interior of their SpaceshipTwo Cabin during a flight. Highly detailed amenities to enhance the customer experience were shown in an online event Tuesday, July 28, 2020, revealing the cabin of the company’s rocket plane, a type called SpaceShipTwo, which is undergoing testing in preparation for commercial service. There are a dozen windows for viewing, seats capable of being customized to each of six passengers and mood lighting. (Virgin Galactic via AP)

Still, Virgin Galactic currently has a backlog of nearly 1,000 booked passenger reservations, with customers paying $450,000 per seat.

And for now, the company has a lot of money on hand to continue financing operations, said Chief Financial Officer Doug Ahrens.

“Our balance sheet remains strong, with $980 million in cash, cash equivalents and marketable securities,” Ahrens told investors.

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