Text settings Story text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only Learn more Minimize to nav On Thursday, the publicly traded spaceflight company Virgin Galactic shared on social media a new photo of its next-generation spaceship being towed outside of its factory in Mesa, Arizona.
You remember Virgin Galactic, right? The space tourism company was founded 22 years ago by Sir Richard Branson to bring spaceflight to the masses. Hundreds of people began buying tickets to space nearly two decades ago. And after a long, and at times deadly, development campaign, the company reached outer space (defined, somewhat controversially, as an altitude of 80 km and above) in December 2018.
The company began flying passengers in May 2021 with its VSS Unity spacecraft, and impressively completed six spaceflights in 2023. But a few months later, in June 2024, Virgin Galactic stopped flying VSS Unity to focus on the development of its next-generation vehicle capable of more frequent, lower-cost spaceflights.
Since then, the company has been largely quiet, making this week’s revelation of new hardware notable. So Virgin Galactic is still pressing ahead, but the question is where it’s going, and along with it, the entire suborbital space tourism industry.
Spaceflight remains an expensive and dangerous business, even for companies focused on relatively simple suborbital flights.
There was a time, about five years ago, when the market appeared poised to break through. During the summer of 2021, both Virgin Galactic and its US-based competitor, Blue Origin, began commercial flights. Famously, Branson and Blue Origin founder Jeff Bezos both went to space within weeks of one another.
Both companies have had robust demand for their services.
A full-priced ticket on Blue Origin’s New Shepard rocket never dropped below $1 million, and the company had customers lined up. But then, during an uncrewed New Shepard flight in September 2022, the rocket failed. The vehicle had to stand down for more than a year. Blue Origin has never revealed New Shepard’s finances, but multiple sources told Ars the program—despite persistent demand—was never close to profitability. Blue Origin ended New Shepard in January to focus on orbital launches and its lunar program.
That left Virgin Galactic as the sole player in the suborbital space tourism game. The company has plenty of customers and has been able to raise its prices for “spaceflight expeditions” to $750,000. Nevertheless, without a steady stream of revenue from flights, its finances are strained.
Two years ago, in February 2024, Virgin Galactic’s “cash position” was reported as strong, with $982 million in cash, cash equivalents, and marketable securities. A year later, this cash position had declined to $567 million, as the company has very low revenues while it’s not flying. To that end, Virgin Galactic said a first spaceflight with the new spaceship carrying research payloads was coming in summer 2026, with private astronaut flights in “fall 2026.”
At the end of March, the company reported its most recent quarterly results, with its cash position declining to $338 million. The company was now projecting that its new spaceship would “enter service” between “late Q4 2026 and early Q1 2027.”
The new ship revealed this week will presumably make that first flight. According to Virgin Galactic, it was being moved this week from the assembly hangar to the launch hangar and will now “undergo final systems integration and ground testing.”
It’s difficult to tell from an image, but the vehicle appears to have a significant amount of integration left to undergo, and its test campaign will not be short.
For comparison purposes, Virgin Galactic rolled a fully integrated VSS Unity spacecraft out in February 2016. It underwent about six months of ground tests and two years of glide and flight tests before its first spaceflight in December 2018. If we assume Virgin Galactic can halve the test time with its new spaceship, given the integration work necessary, this would still place its first spaceflight at the end of 2027 or early 2028.
It’s not clear whether Virgin Galactic has the cash reserves to fund a prolonged test phase, let alone invest in multiple spaceships to achieve profitability. Ultimately, this will require the company to fly hundreds of passenger flights a year.
The odds of Virgin Galactic succeeding appear to be pretty long. First, it must get this newest spaceship flying soon, and it must do so safely. Then it must build a second one and hope that its aging Eve carrier aircraft can support three spaceflights a week and 125 flights a year. And it must perform all of these operations without significant anomalies. If it does all of this before the cash runs out, Virgin Galactic will just about be able to break even.
And if it doesn’t? Then the suborbital space tourism market, which looked so promising just a few years ago, will likely be dead for at least a generation.
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