Virgin Galactic Wants to Grow Pool of Potential Customers, But Date, Price, Uncertain

Virgin Galactic Wants to Grow Pool of Potential Customers, But Date, Price, Uncertain

Virgin Galactic will roll out a new “One Small Step” initiative tomorrow to allow people interested in flying on one of its suborbital trips to space to put down a deposit to be at the front of the line when ticket sales reopen.  When that will be, and how much it will cost, are still unknown, however.

Virgin Galactic CEO George Whitesides led the discussion this afternoon during the company’s first earnings call.  The company went public in October following a merger with Social Capital Hedosophia.  It is traded on the New York Stock Exchange as $SPCE.  Share prices rose dramatically in the last few weeks, but sank a bit today. The stock market as a whole fell more than 3 percent because of coronavirus fears, but the company’s financials also were not as strong as financial analysts reportedly expected.

Whitesides side-stepped questions of when the first commercial flight will take place. Asked if it is still planned for mid-summer, he said only that the company is “affirming” its goal to fly Virgin owner Sir Richard Branson on a commercial flight in 2020, but safety is the first priority.

He also declined to talk price.  Originally, the price per seat was $200,000, but that rose to $250,000 before sales closed after VSS Unity made its first successful trip to space in 2018.  At that point, the company had 600 reservations with $80 million in deposits, representing $120 million in potential revenue.

He did not say when sales would reopen, but when they do, the price will be higher.

For now, the target market is individuals with a net worth of $10 million or more, although the long term goal is to reduce prices and make it more affordable once capacity increases when all five planned spaceships are ready. VSS Unity is the only flightworthy vehicle now.  A second vehicle met the “weight-on-wheels” milestone last month and a third is under construction.  He expects all five to be operational by the end of 2023.

There is a lot of interest to be sure.  The number of “registrations of interest” has reached 7,957, a 124 percent increase from September 30, 2019.  The One Small Step initiative will give the “most eager” people a chance to put down a $1,000 refundable deposit and be “front of the line for firm seat reservations, once they become available.” He described the program as augmenting the “direct sales funnel” to create a pool of “qualified prospects” who later take “One Giant Leap” to a confirmed flight reservation and eventually become astronauts.

Flights will take place from Spaceport America in New Mexico.  The company already has its launch license from the FAA and is completing Verification and Validation (V&V) milestones.  Of the 29 V&V elements, 20 have been completed, 10 of which were done this year.  Whitesides pointed out that Spaceport America is within the airspace of the White Sands Missile Range so its flights will not disrupt commercial airlines.

The Virgin Galactic spaceship system at Spaceport America, NM. Credit: Virgin Galactic

Though happy with the progress to date, Whitesides cautioned there is much more to do.  Ongoing work is focused on finishing the flight test program (glide and powered flights), testing and optimizing the end-to-end customer experience (not just the flight itself, but training and the “hospitality experience” for passengers and their invited guests), and readying the spaceships and their White Knight carrier aircraft for long-term, high-rate service.

Commercial human spaceflight is their first focus, but Whitesides asserted they have much bigger plans especially in high speed global mobility.  He envisions using the company’s proprietary technologies and capabilities for other commercial and government purposes like significantly faster point-to-point travel.

Financially, CFO Jon Campagna reported that the company had a net loss of $73 million in the fourth quarter of 2019, with a total net loss of $211 million for the year. Revenue in 2019 was $4 million generated by flying scientific payloads and providing engineering services, but was just $529,000 in the last quarter.  The Financial Times and CNBC attributed the decline in the company’s share price in after hours trading today to the fact that losses widened in the fourth quarter.

User Comments has the right (but not the obligation) to monitor the comments and to remove any materials it deems inappropriate.  We do not post comments that include links to other websites since we have no control over that content nor can we verify the security of such links.