Virgin Galactic Reaffirms Plans to Begin Commercial Service in Q2 2023, Delays More Capable Second Spacecraft to 2024 as Quarterly Net Loss Triples

VSS Unity glides to a landing at the Mojave Air and Space Port on Dec. 13, 2018 after its first suborbital spaceflight. (Credit; Matt Hartman / @shorealonefilms)

Virgin Galactic’s reaffirmed plans on Thursday to begin commercial suborbital spaceflights in the second quarter of 2023 with a single SpaceShipTwo while pushing back the start of revenue flights of a second spacecraft capable of flying more customers more frequently into 2024. The company reported a net third quarter loss of $145.5 million, triple that of the same period last year.

Virgin Galactic also announced it had contracted with Bell Textron and Qarbon Aerospace to supply major subassemblies for the company’s advanced Delta class spacecraft, which are designed to fly more passengers more frequently with far less maintenance. Delta class vehicles are being designed to fly once a week beginning in late 2025.

In the meantime, Virgin Galactic plans to begin commercial flights with VSS Unity and its VMS Eve mothership. The company aims to launch the vehicle, which is flown with two pilots and four passengers, once per month. The first revenue flight will carry three Italian Air Force pilots in the second quarter of next year. That will be followed by space tourism flights by customers who will pay $200,000, $250,000 or $450,000 for seats depending when they put down deposits since tickets went on sale in 2005.

Virgin Galactic officials said they are reassessing the flight test schedule for the second SpaceShipTwo, VSS Imagine. The company had hoped for begin commercial flights of the six-passenger vehicle every two weeks as early as Q4 2023. Combined with VSS Unity, that would give the company the ability to fly 16 passengers on three flights per month.

VSS Imagine was rolled out at the end of March 2021 with the expectation of beginning flight tests that summer. The spacecraft has not flown once as repeated delays with VSS Unity and VMS Eve postponed the start of commercial service.

Company officials said the delay was due to the need to devote engineering resources to the Delta class spacecraft. Bell Textron and Qarbon Aerospace will supply major subassemblies for the new vehicles. Virgin Galactic has also contracted with Aurora Flight Systems to produce next-generation WhiteKnightTwo motherships.

The increased expenditures on manufacturing and years of delays in starting commercial service has let to increasing red ink for the company. Virgin Galactic saw its net loss more than triple delay from $44 million in third quarter 2021 to $145.5 million in Q3 2022. The company has lost $318.8 million in the first three quarters of 2022. Virgin Galactic said it had cash and cash equivalents and marketable securities of $1.1 billion as of Sept. 30.

The delay in the VSS Imagine commercial flights into 2024 will further exacerbate Virgin Galactic’s losses. The company has built a third SpaceShipTwo named VSS Inspire, but it is unclear whether it will ever fly.

Before beginning revenue flights next year, Virgin Galactic plans to complete a 14-year long flight test program that began with the first flight of VMS Eve in December 2008. (The first SpaceShipTwo, VSS Enterprise, had its first glide test on Oct. 10, 2010; it was destroyed during a flight test four years later.) Officials said they plan to conduct a drop test of VSS Unity to test modifications made to both vehicles in late December or early January. That will be followed by a final flight test with four Virgin Galactic employees in the passenger cabin.

Both VMS Eve and VSS Unity have undergone modifications since the company’s last suborbital flight on July 11, 2021. The work was originally supposed to take about four months, with commercial flights beginning in early 2022. But, more extensive modifications were done than initially anticipated.

The VMS Eve mothership, which had its maiden flight on Dec. 21, 2008, is a proof-of-concept prototype that its manufacturer, Scaled Composites, never intended for commercial service. It is beyond its original design life and has required extensive modifications, including the installation of a new mount to hold the spacecraft.

You can read Virgin Galactic’s earnings press release and tables here.