Spaceport America loses some lift following Virgin Galactic pause

After Spaceport America’s biggest tenant, Virgin Galactic, ended commercial flights out of the launch facility near Truth or Consequences last year, the Spaceport reported slight hits to its economic output for 2024.

The Spaceport added nearly $240 million to New Mexico’s economy last year, a decrease from $266 million in 2023, according to the facility’s most recent economic impact report compiled by the Arrowhead Center at New Mexico State University and released Tuesday.

Still, the Spaceport has shown tremendous growth over the last six years — economic output at the facility has more than tripled from $72.3 million in 2019, and Scott McLaughlin, the Spaceport’s executive director, says the launchpad has other tenants and is working to attract new ones.

“Unfortunately, people think that the success of the Spaceport is 100% connected to VG activities,” McLaughlin said.

From mid-2023 until June 2024, billionaire Richard Branson’s spaceflight company Virgin Galactic offered monthly trips to the cosmos for paying customers. The company paused commercial flights last year while it builds its new Delta class rocket ships, which will be able to fly twice a week instead of the usual once-a-month trips to suborbit, officials have said.

The decrease in economic output and the pause in flights sparked talk of selling the Spaceport at a meeting of the New Mexico Legislature’s Economic and Rural Development and Policy Committee on Tuesday, where legislators pushed McLaughlin on when taxpayers would begin to see a return on their investment at the Spaceport.

State Rep. Rod Montoya, R-Farmington, asked the committee to consider selling the Spaceport if it does not turn a profit, telling legislators he wasn’t “sure if the government’s really meant to compete in the private sector.”

“Government is not really good at turning a profit in anything. The best we can do is in the military, and that’s where we destroy things,” Montoya said.

Selling the Spaceport would be difficult, McLaughlin told the Journal. The launch facility is a public good, he added, and selling it would be akin to selling the Albuquerque International Sunport.

“The state did not create Spaceport America simply as a revenue-generating exercise. What we are is an enabler — just like any public good, just like building a bridge across the Rio Grande — we’re there to catalyze other industries and other business activities,” McLaughlin said. “So whether we’re 100% profitable or not is not the best metric for something like a public good.”

Total jobs at the Spaceport are down from 985 last year to 790, which McLaughlin attributes in part to layoffs at Virgin Galactic. In November 2023, the company cut 73 of its New Mexico employees after reporting a net loss of $105 million for the third quarter of that year.

To help spur commercial activity, the Spaceport inked partnerships in the last year and a half with two economic development organizations, the Albuquerque Regional Economic Alliance, and the Borderplex Alliance out of Las Cruces.

Aside from Virgin Galactic, Spaceport America has seven tenants, including the most recent addition, the Colorado-based space startup Sirius Technologies, which signed a two-year lease at the Spaceport in May.

“The Spaceport has diversified considerably, especially in the last few years,” said Christopher Erickson, NMSU economist and one of the report’s authors. “They’re not as dependent on Virgin Galactic as they were...it’s not as big a deal (to lose them) as it would’ve been even five years ago.”

In an earnings call in the fall of 2023, Virgin Galactic representatives predicted the Delta ships would be operational by 2025, but McLaughlin now says he hopes the company will resume commercial flights at the Spaceport again in the next 12 to 18 months. Virgin Galactic officials said last week that commercial flights are expected to resume in fall 2026.

Since the Spaceport’s first rocket launch in September 2006, Virgin Galactic’s progress has been slower than expected, McLaughlin said, though setbacks are to be expected with space travel.

“If you look at almost any vehicle designed for space, you see delays,” McLaughlin said. “Our foundational customer is Virgin Galactic, and we want to see them succeed with the original thing that we were all going to do together, which was to support space tourism.”