Sir Richard Branson has announced his departure from Virgin Galactic, declaring that his business empire will no longer provide additional funding to the space tourism company. Branson told the Financial Times: “We don’t have the deepest pockets after COVID, and Virgin Galactic has got $1 billion, or nearly. It should, I believe, have sufficient funds to do its job on its own.”
Although Virgin Galactic was founded in 2004 and has had setbacks, including the crash of VSS Enterprise, the space tourism company achieved a suborbital flight to the edge of space in 2018 and again in 2019 before flying Branson and crew on a crewed flight in 2021.
Branson’s flight attracted criticism from the Federal Aviation Authority (FAA) for venturing outside of its allocated airspace. Virgin Galactic’s suborbital tourism ambitions were also delayed until 2023 due to other issues.
Although Virgin Galactic restarted commercial business with a successful suborbital test flight, it is challenging to turn a profit with tickets starting at $450,000 and a maximum of four paying passengers per flight using the current VSS Unity spaceplane and VMS Eve carrier aircraft combination.
Virgin Galactic is looking toward its upcoming Delta class of spaceplane, which can carry up to six passengers, and expects eight flights per month from the forthcoming class, with revenues of between $21.6 million and $28.8 million per ship, according to its third quarter 2023 earnings update [PDF].
However, the company will still be burning cash to achieve this, with revenue guidance for Q4 2023 at $3 million and cash flow expected between $125 and 135 million. Virgin Galactic will also be switching to a quarterly cadence before pausing flights of VSS Unity in mid-2024 to focus on building the Delta ships.
Boss Michael Colglazier announced staff cuts, with approximately 185 employees – around 18 percent of the workforce – to leave as the company seeks to cut costs and focus on the Delta class spaceplanes.
Despite Branson’s declaration that he is “still loving” the Virgin Galactic project, he has decided to cease further funding. His other rocket startup, Virgin Orbit, ceased operations earlier this year.
