Virgin Galactic Holdings Inc. (SPCE) was founded in 2004 and is owned and backed by billionaire entrepreneur Sir Richard Branson. The aerospace company is focusing on developing spacecraft for human travel and tourism. As part of that goal, Virgin Galactic is working on a flight program to provide customers with multiple-day flights that include views of Earth from space. Its operations include the designing, development, manufacturing, ground and flight testing, and maintenance of its spaceflight vehicles.
The global suborbital transport and space tourism market is projected to reach approximately $2.6 billion by 2031. It is an emerging industry with only a handful of players racing to dominate the market. They include: Elon Musk’s Space Exploration Technologies Corp., better known as SpaceX; Jeff Bezos ‘Blue Origin’ LLC; axiom Space Inc.; and The Boeing Company (BA).
- Virgin Galactic is an aerospace company developing a spaceflight system designed to provide high-ticket space tourism adventures to passengers.
- The company’s main sources of revenue are currently carrying payload cargo and providing engineering services.
- Virgin Galactic plans to generate the majority of its revenue from selling flight tickets to space once it begins its spaceflight services business.
- The company plans to conduct the 23rd test flight of one of its space vehicles, VSS Unity, by mid-October.
Virgin Galactic’s Financial Situation
Virgin Galactic announced financial results in early August for the second quarter of its 2021 fiscal year (FY), the three-month period ended June 30, 2021. The company’s net loss increased to $94.0 million from $72.0 million in the year-ago quarter. The company is generating virtually no revenue. For example, in Q2, it generated revenue of $0.6 million, compared to no revenue in the same three-month period a year ago. The largest expenses that contributed to the net loss were selling, general and administrative expenses, and research and development expenses.
Virgin Galactic highlighted in its earnings report that it completed two successful space flights, the first in May and the second in July. The second flight was the 22nd flight of VSS Unity and the fourth voyage into space. Unity is the company’s spaceship designed to take humans into space. The flight passed several test objectives, including evaluation of the cabin and customer experience. The first flight of the quarter conducted scientific research that generated revenue for the company.
Virgin Galactic’s Business Segments
Virgin Galactic operates as a single segment. The company’s primary sources of revenue are from carrying payload cargo and providing advanced technology aerospace engineering services to the US government. Virgin Galactic’s goal — and main strategy — is to generate the majority of its revenue from ticket sales for flights into space through a Space Flight Services program.
Virgin Galactic’s Recent Developments
On September 29, 2021, Virgin Galactic announced that, following an FAA investigation, it has been approved by the Federal Aviation Association (FAA) to fly licensed spaceflights. Issues related to Virgin Galactic’s air traffic control clearance and real-time mission notification were investigated during the highly publicized flight of VSS Unity in July. Branson was one of the passengers on that flight, making him the first billionaire space company founder to ride in his own spacecraft. The FAA accepted the corrective actions proposed by the company, including: updated calculations for the expansion of protected airspace for future flights; and additional steps in flight procedures to ensure real-time mission notifications to FAA Air Traffic Control.
On September 10, 2021, the company provided an update regarding the timing of “Unity 23”, the 23rd test flight of the VSS Unity, which will be conducted in collaboration with the Italian Air Force. Virgin Galactic said it was resolving a pending issue related to a potential manufacturing defect in a part made by a third-party supplier. As a result, Virgin Galactic said in mid-October it was the first to open its flight window for Unity 23.