Virgin Galactic Goes All In on New Delta Spaceship

After finally reaching a regular cadence of launches, Richard Branson’s Virgin Galactic will abandon the Unity spaceship after just two or three more flights as it shifts resources into the new Delta vehicle that it expects to be more profitable. Delta will be able to carry 50 percent more passengers and launch twice a week, but getting it ready means cutbacks both to Unity flights and the company’s workforce.

CEO Michael Colglazier laid out the new plan today during a telecon on Virgin Galactic’s third quarter 2023 financial earnings.

After almost two decades of development, the company finally made its first commercial spaceflight, Galactic -01, in June, quickly followed on a monthly basis by Galactic-02, Galactic-03, Galactic-04 and Galactic-05. But that cadence has ended.  Unity now will fly only on a quarterly basis, and only two or three more times. Galactic-06 is scheduled for January 2024 and Galactic-07 for sometime in the second quarter. A decision on whether there will be a Galactic-08 is pending.

One way or another, Virgin Galactic spaceflights will “pause” next summer for about a year before the first test flight of Delta in the summer of 2025 and revenue-producing flights in 2026.

The change in plans means layoffs. Colglazier said they will begin 2024 with 840 full time employees.

That’s down from 1,166 according to their December 31, 2022 annual report.  He called it “deeply unfortunate” to have to say goodbye to friends and co-workers, but necessary as they transition to the new vehicle.

In addition to two pilots, the commercial Unity flights so far have carried three paying customers and one company employee, an astronaut trainer along for the ride to determine if any tweaks are needed to the training program. That seat will now become available for passengers. They also plan to fly more research experiments and increase the price for some customers, leading to more revenue from the remaining Unity flights.

But the key to commercial success is Delta. It takes too long to turn Unity around for the next flight. With its carbon-carbon composite design, Delta will be able to fly twice a week and with 50 percent more seats, the revenue potential is 12 times that of Unity, Colglazier said. They anticipate bringing two Delta spaceships into service and achieving positive cash flow by 2026. Each Delta will cost $50-60 million and can make at least 500 flights. They will be assembled at a new factory in Phoenix, AZ adjacent to the Phoenix-Mesa Gateway Airport scheduled to open in the second quarter of 2024. Bell Textron and Qarbon Aerospace are the two major suppliers.