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Virgin Galactic Forecasts Low Revenue For Q3 and Q4
Virgin Galactic has officially entered regular commercial operations but the company has advised that these flights will generate only modest revenues in the near future.
Wed Aug 02 2023Written by Zac Aubert
Virgin Galactic has officially entered regular commercial operations with its suborbital spaceplane, VSS Unity. However, the company has advised that these flights will generate only modest revenues in the near future.
On August 1, Virgin Galactic reported revenue of $2 million for the second quarter of 2023. The revenue was primarily attributed to its first commercial SpaceShipTwo mission, named "Galactic 01," which took place on June 29, along with membership fees from private astronaut customers.
The inaugural flight, Galactic 01, marked a significant milestone as it was a research mission for the Italian Air Force and officially kicked off the company's commercial operations. Virgin Galactic plans to continue flying VSS Unity approximately once a month.
The next mission, Galactic 02, is scheduled for August 10 from Spaceport America in New Mexico.
“Galactic 02 is going to set the stage for a new era of suborbital human spaceflight that will dramatically broaden access to space for private individuals,” - Michael Colglazier, Chief Executive of Virgin Galactic
Galactic 02 will be the first flight to carry the company's private paying. astronaut customers. Jon Goodwin was an early customer of Virgin Galactic, while Keisha Schahaff, and Anastatia Mayers won their seats in a 2021 contest with Space For Humanity.
Despite the optimism surrounding future missions, Virgin Galactic downplayed revenue expectations. The company forecasts just $1 million in revenue for each of the next two quarters. This is due to that 75% of the 800 tickets sold were at lower prices, ranging from $200,000 to $250,000. A ticket abord SpaceShipTwo has been increased to $450,000 each.
The other barrier to greater revenue in Q3 and Q4 is that VSS Unity's cabin can only accommodate four people. Virgin Galactic will only fly three paying customers on each flight, with the fourth seat reserved for an astronaut trainer. Virgin Galactic plans to add a fourth paying customer to Unity flights in 2024, increasing per-flight revenue to about $800,000.
Research flights like Galactic 01 are more lucrative, estimated to generate approximately $600,000 per seat; However, Virgin Galactic has allocated only about 100 of its first 1,000 seats for research customers.
Virgin Galactic has temporarily halted ticket sales, except for those offered through a travel agency, Virtuoso, to manage its customer backlog.
Virgin Galctic won't reopen ticket sales until closer to the introduction of its next-generation spaceplanes, the Delta class, currently planned for 2026. The pricing for these future sales has not been set, but Virgin Galactic has confirmed will not be less than the current price of $450,000.
VSS Imagine, a second suborbital spaceplane the company had been developing is not expected to enter commercial service. Instead will likely be used to support the development of the Delta-class vehicles.
“We have it secured and ready. But it’s likely going to be used in service of the Delta program.” - Michael Colglazier, Chief Executive of Virgin Galactic
Despite reporting a net loss of $134.4 million in the second quarter, mainly due to ongoing spending on Delta-class development, Virgin Galactic raised $241 million from a stock sale during the same period, leaving the company with $980 million in cash and equivalents as of the end of the second quarter.
As Virgin Galactic continues to pioneer commercial spaceflight, it faces both the challenge of managing revenues from current operations and the promise of future growth with the Delta-class vehicles on the horizon.
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