Virgin Galactic has revealed in its latest earning call its decision to decrease the frequency of flights for its current suborbital vehicle, VSS Unity, with plans to cease operations entirely by mid-2024.
Virgin Galactic has revealed in its latest earning call its decision to decrease the frequency of flights for its current suborbital vehicle, VSS Unity, with plans to cease operations entirely by mid-2024 as they redirect resources towards the development and production of its next generation of space vehicles, known as the Delta class.
Virgin Galactic CEO stated that the Unity flights have served their purpose by demonstrating the system, showcasing the astronaut experience, and providing crucial insights for the Delta program.
Virgin Galactic is set to redirect resources towards the development and production of its next generation of space vehicles, known as the Delta class.
The decision comes on the heels of VSS Unity completing its fifth commercial suborbital mission on Nov. 2. Company executives disclosed that starting with the next mission, Galactic 06 in January, flights of VSS Unity would be scaled back to a quarterly frequency. Galactic 07 is expected to follow in early second quarter, and a potential Galactic 08 mission might take place around the middle of the year but is not confirmed yet.
Virgin Galactic is preparing to reduce expenses and begin to lay off staff as they reallocate resources to the development of the Delta-class vehicles. The company aims to cut 185 jobs, representing about 18% of its current workforce, as part of this initiative.
Virgin Galactic anticipates that the cost-cutting measures, layoffs, and the sale of stock will provide sufficient funding to complete the development of the first two Delta vehicles, with commercial flights slated to begin in 2026.
Virgin Galactic concluded the quarter with $1.1 billion in cash and equivalents.
"We project we have sufficient capital to build the revenue-generating assets necessary to achieve positive free cash flow." - Doug Ahrens, Virgin Galactic CFO
In the third quarter, Virgin Galactic reported $1.7 million in revenue from its spaceflight operations and "membership fees" from customers. The company projects $3 million in revenue for the fourth quarter, despite a net loss of $105 million in the third quarter.
As Unity flights wind down, Virgin Galactic plans to shift its personnel working on the vehicles at Spaceport America in New Mexico to a new factory near Phoenix, expected to be completed in the second quarter of 2024. This move is aimed at facilitating the assembly of the first Delta-class vehicles, optimizing company resources, and providing personnel with experience before test flights commence in 2025.
Virgin Galactic projects that the Delta-class vehicles will be capable of flying twice a week, compared to the monthly cadence of Unity flights.
With the Delta vehicles able to accommodate six customers instead of four, each Delta vehicle is expected to generate 12 times the revenue per month as Unity, contributing to the company's goal of achieving positive cash flow in 2026.