Virgin Galactic trims staff and spending
Despite having completed its fifth commercial suborbital flight on November 2, 2023, Virgin Galactic announced yesterday that it is laying off staff and cutting spending.
The number of people laid off was not revealed. Supposedly the company has done this as part of its effort to develop an upgraded version of SpaceShipTwo.
The company reported having $980 million of cash and equivalents on hand at the end of the second quarter this year, when it reported a net loss of $134.4 million. The company has not disclosed its estimated costs for development of the Delta vehicles, but said it expected those vehicles to enter service in 2026. The company expects only limited revenue from VSS Unity, which is able to fly monthly carrying up to four customers at a time.
I instead suspect that demand for suborbital flights is dwindling because of the competition from orbital operations. Had this company started flying a decade ago, as promised numerous times by Richard Branson, it would have been ahead of the curve. It didn’t and thus missed the boat.
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Despite having completed its fifth commercial suborbital flight on November 2, 2023, Virgin Galactic announced yesterday that it is laying off staff and cutting spending.
The number of people laid off was not revealed. Supposedly the company has done this as part of its effort to develop an upgraded version of SpaceShipTwo.
The company reported having $980 million of cash and equivalents on hand at the end of the second quarter this year, when it reported a net loss of $134.4 million. The company has not disclosed its estimated costs for development of the Delta vehicles, but said it expected those vehicles to enter service in 2026. The company expects only limited revenue from VSS Unity, which is able to fly monthly carrying up to four customers at a time.
I instead suspect that demand for suborbital flights is dwindling because of the competition from orbital operations. Had this company started flying a decade ago, as promised numerous times by Richard Branson, it would have been ahead of the curve. It didn’t and thus missed the boat.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
Virgin Galactic’s problem isn’t lack of demand, it’s lack of ability to service said demand and to do so profitably. It’s current hardware is only good for 10 or 11 missions per year. With four customers per flight, it would take two decades to work off just Virgin’s current backlog of several hundred deposit-paid clients. That is untenable both temporally and financially. Virgin needs the planned Delta-class vehicles if it is to have any chance of long-term survival. The current belt-tightening is in service of stretching its cash hoard the minimum of three more years it will take to begin Delta-based service.
Orbital space tourism is still at least two orders of magnitude more expensive than Virgin Galactic’s and Blue Origin’s amusement park rides. Both are “space tourism,” but they’re not remotely the same market.
Dick Eagleson: I agree, the cost of orbital delta-v on injection, and then the tricky friction on reentry is a high cost. So I always thought I would buy the sub orbital space plane ticket. But then I thought about the sub orbital Air Force contract for Starship. Anything orbital can easily be used in sub orbital mode if needed. So a dual use military/civilian , multi mode, reusable system is scary to investors in vastly more limited systems.