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Virgin Galactic Stock Plunges as Company Delays Space Tourism Flights to 2022

By Doug Messier
Parabolic Arc
February 25, 2021
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SpaceShipTwo VSS Unity arrives at Spaceport America aboard WhiteKnightTwo VMS Eve. (Credit: Virgin Galactic)

by Douglas Messier
Managing Editor

Shares of Virgin Galactic plunged sharply on Thursday as the company announced that it was postponing the start of commercial suborbital space tourism flights until 2022 due to additional delays in completing SpaceShipTwo VSS Unity‘s test program.

Shares plunged in after hours trading to $36.69 after opening the day at $45.04. Most of the decline occurred in after hours trading following the release of Virgin Galactic quarterly and full year 2020 earning report.

Virgin Galactic reported a net fourth quarter loss of $74 million with no revenues. The company reported a net loss of $273 million for 2020, it’s first full year as a public company.

It was the latest setback for the self-proclaimed “world’s first spaceline,” which has been trying to fly tourists on suborbital joy rides since September 2004. Commercial flights were originally forecast to begin in 2007.

Two Years of Delays

Before Virgin Galactic went public through a merger with Social Capital Hedosophia in October 2019, commercial flights were projected to begin in June 2020. The latest delay pushes the start of those flights back by about 18 months.

The June 2020 start date was contingent upon completion of VSS Unity‘s flight test program. That effort had already suffered a setback that was not disclosed in documents filed with the Securities and Exchange Commision (SEC) before Social Capital Hedosophia shareholders approved the merger.

Chief Pilot David Mackay celebrates VSS Unity’s second suborbital flight with champagne. (Credit: Virgin Galactic)

VSS Unity‘s horizontal stabilizer suffered severe damage during the vehicle’s second suborbital flight test in February 2019. Virgin’s then-vice president of safety Todd Ericson has been quoted as saying the company was very fortunate not to lose the ship and its three-person crew.

Modifications to VSS Unity and the COVID-19 pandemic pushed the rocket plane’s next flights into 2020. The vehicle conducted glide flights on May 1 and June 25 to test the upgrades from Spaceport America in New Mexico.

It was not until Dec. 12 — 22 months after its last suborbital flight — that VSS Unity tried to fire its engine in flight again. However, the ignition of the vehicle’s hybrid motor was automatically aborted after the flight computer lost contact with it. Pilots David Mackay and C.J. Sturckow glided the ship back to a runway landing.

During the earnings call, Virgin Galactic President Michael Moses said the rocket plane’s computer rebooted due to electromagnetic interference (EMI). The required modifications delayed a re-flight of the aborted test to a new launch window that opened on Feb. 13.

However, that flight test has now been delayed until May. Moses said modifications made to the ship created the potential that other problems could occur, problems engineers are now addressing.

The May date will push the time since the last successful powered flight to 27 months. This is the longest gap in powered tests of a functional SpaceShipTwo since VSS Enterprise first fired its engine for the first time on April 29, 2013. (This does not count the time between VSS Enterprise breaking up in flight on Oct. 31, 2014, and VSS Unity‘s first powered flight in April 2018.)

CEO Michael Colglazier said VSS Unity‘s flight schedule the rest of 2021 is as follows:

  • May: revenue generating flight with two pilots and a load of NASA-sponsored microgravity experiments (repeat of aborted December 2020 flight);
  • Summer: flight test with four test subjects in the passenger cabin;
  • Summer: flight test with Virgin Galactic Founder Richard Branson
  • Summer/Fall: revenue generating flight with three Italian Air Force pilots who will train for spaceflight.

Colglazier said the VSS Unity and its WhiteKnightTwo VMS Eve mother ship would undergo about four months of enhancements before beginning space tourism flights in early 2022.

Virgin Galactic’s CEO also said that the next SpaceShipTwo should be ready for commercial flights at about the same time. The company plans to roll out that vehicle on March 30. It will be put through a series of taxi and flight tests.