Virgin Galactic delays commercial suborbital flights until 2023

(ORDO NEWS) — Virgin Galactic is once again postponing the start of commercial flights of its SpaceShipTwo suborbital spacecraft from late 2022 to early 2023, citing supply and labor issues as the latest delay.

In a Q1 earnings release on May 5, Virgin Galactic said it plans to begin commercial flights of its VSS Unity spaceplane in the first quarter of 2023 after completing upgrades to the vehicle and VMS Eve, the WhiteKnightTwo carrier aircraft.

The company previously planned to start these flights in the fourth quarter of 2022, a schedule it confirmed in February with its 2021 financial results.

Michael Colglazier, chief executive of Virgin Galactic, said in an earnings call that the company is experiencing “elevated levels of disruption in the supply chain” and is hiring staff that can’t keep up with forecasts.

“Our hiring forecasts and supply forecasts for some long shelf life materials suggest that we may need additional reserves,” he said. “For this reason, we are rescheduling the expected start of commercial service from Q4 22 to Q1 23.”

Asked later about specific supply chain issues, Kolglazier mentioned the availability of “high performance metal materials” used in cars, which are mostly made from carbon composites.

He said that “it’s metal materials that we’re seeing quite long delivery times”, for example aluminum alloy, which used to be delivered within “a couple of weeks,” now takes much longer. While the company is working to mitigate these delays by looking for alternative sources, “the whole thing is starting to add up.”

Another problem is staff recruitment. Virgin Galactic is expanding its engineering staff, but it says most of the new hires are working on the design of a new “Delta-class” spaceplane that is expected to enter service in the middle of the decade.

Existing employees are busy working on Unity, Eve and Imagine, new suborbital spaceplanes scheduled to enter commercial service in mid-2023, he said.

“We had an engineering team that was basically building one ship, Imagine, because Unity and Eve were in flight testing,” he said. “Now we have the same engineering team that has experience on all three ships.”

Unity and Eve flight tests are currently scheduled to resume in the fourth quarter, Kolglazier said. It is planned to conduct one gliding flight and one electric test flight, and then begin commercial operation in early 2023.

Imagine, the new spaceplane, will make its first flight into space in the first quarter of 2023, followed by several “revenue-generating” test flights before it starts carrying customers in mid-2023.

He did not elaborate on Imagine’s overall test flight schedule, which is likely to include several captive and gliding flights before electric flight, based on experience with previous Virgin Galactic craft.

Despite existing supply chain problems, Virgin Galactic is moving ahead with its Delta spacecraft building strategy, which involves shifting most of the work to suppliers, and the final assembly of the devices will be carried out by the company.

Virgin Galactic recently held a supplier conference and sent requests for information from potential suppliers, Colglazier said, but has yet to announce any firm contracts to build ship elements.

“We are making contracts and purchases that will be significant for people,” he said, adding that although supply chains are “overloaded” today, he cannot predict what the situation will be in two to three years when these vehicles are built. .

Despite the delays, Virgin Galactic continues to show strong interest in suborbital flight. The company currently has 800 customers and Kolglazier said the company will easily reach its goal of 1,000 customers once commercial flights begin in early 2023.

He added that the company, which raised prices to $450,000 last year, has no plans to raise them anytime soon, despite the skyrocketing inflation. “When the last 200 tickets run out, we will evaluate prices according to the market situation,” he said.

Those sales accounted for the $310,000 revenue the company reported in the first quarter of 2022. The company reported a net loss of $93 million and adjusted EBITDA of $77 million for the quarter.

The company has cash and cash equivalents of US$1.22 billion, supported by a debt placement in the first quarter that raised US$425 million.

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