A Year Ago, Virgin Galactic Won the Battle

A year ago today, July 11, word was breaking that Sir Richard Branson had "won the battle;" the race to become the first private company to launch civilians on suborbital space flights, carrying Branson himself. The New York Post opened with the Headline, “Richard Branson, on his Virgin Galactic rocket plane, becomes first billionaire to get to space.”  As if that was the important part of the story.

As it happens often enough to be a cliche',  Branson seems to have won the battle and lost the war against business rival Blue Origin.  Jeff Bezos took his first ride nine days later on July 20.  

As Richard Branson went to space, he and his company seemed to be on top of the world.

But it has been a rough ride in the year since. Most crucially, Virgin Galactic's VSS Unity spaceship has yet to fly a single time again, and it may not do so until this winter. In the meantime, Bezos' space tourism company, Blue Origin, has started to regularly fly paying customers into space, higher than Virgin Galactic, on a fully reusable spacecraft. Partly as a result, Virgin Galactic's stock price has crashed, now trading at about $7 a share.

It's not fair to blame the entire drop in Virgin Galactic's stock price from a peak above $50 to that $7 figure on the company's performance in the last year.  Some of that drop is undoubtedly the overall decline in stock prices from the budding recession we're in.  Still, it's worthwhile asking if Virgin Galactic is still a player in the space tourism market and if they can survive.  As it's worthwhile to ask if there's really a market for these space tourism suborbital hops just high enough to be considered being technically in space.  

On the much happier July 11th, Sir Richard is seen floating aboard VSS Unity during the minutes of weightlessness.  Virgin Galactic photo. 

In the days after the flight, the Federal Aviation Administration revealed that Unity  flew outside its designated airspace for 1 minute and 41 seconds after being released by its carrier aircraft.  The FAA grounded the spacecraft until concluding at the end of September that the company needed better procedures and needed to communicate more closely with the FAA during flight operations.  

Ironically, being grounded didn't matter; the ship was simply unable to fly.  At the time of Sir Richard's ride, the company had planned a follow up flight for later in the summer.  It still hasn't flown.  That flight is now scheduled for no earlier than the fourth quarter of 2022.  The company is also claiming that commercial service, flying the hundreds of people who have purchased tickets, will start in the first quarter of 2023.

"They've always over-promised and under-delivered on their flight schedule, so I never expected their promised flight cadence," said Laura Forczyk, a space industry analyst. But the long delay between Branson's flight and a successor mission raises red flags, she said.

"Going a full year without even setting a date for their next flight is not a good sign," she said. "It leads me to conclude there really were serious structural or operational issues with Virgin Galactic's recent flights, despite their denial."

Comparatively, Blue Origin has done much better with several sub-orbital tourist flights since last July - although I don't think I've written about any since William Shatner's flight last October.  Blue has maintained approximately a two month cadence (a launch every other month).  

Eric Berger at Ars Technica has more information on the outlook for Virgin Galactics business than I feel comfortable dedicating page space, too, but it looks grim.  While they have plenty of cash (and equivalents) on hand, over $1 billion, they have a very steep hill to climb.  A company that has managed one launch in a year is looking at a minimum of 150 to 200 launches per year to turn a profit.  At minimum.  Maybe on the order of 400 launches per year.  

The outlook for this sort of space tourism doesn't look materially different.  Nobody knows what a seat really costs for these "Karman Line Hops" but Virgin Galactic sells tickets for $450,000 and Blue Origin, while less open about costs, appears to charge around $1 million.  The era when even upper middle class people can take a joy ride to space doesn't seem to be near.  The one hope at this time is Starship.