WASHINGTON — Virgin Galactic is pushing back slightly the beginning of commercial flights of its Delta-class suborbital spaceplanes next year as it deals with a manufacturing issue.
In an Aug. 6 earnings call, company executives said that they now expected to begin commercial flights for research payloads in the fall of 2026, with private astronaut flights to begin later that fall. The schedule previously released by the company, and confirmed in its previous earnings call in May, had research flights starting in the summer and private astronaut missions in the fall.
Michael Colglazier, chief executive of Virgin Galactic, said the company ran into a problem with the production of the first carbon composite skins for the vehicle’s fuselage. The material, he explained, had different densities based on the compressive forces it was designed to handle, but he suggested that caused problems when the composites were placed in an autoclave.
“We’ve assessed that, understand that’s where the issue is,” he said, and is taking measures to fix the problem.
That work will push back the delivery of the fuselage skins by one and a half to two months. However, he noted that component was not on the critical path for completing the first Delta spaceplane, reducing the impact on the overall development schedule. “So our private astronaut flights are going to be a little later in the fall than they were before, but they’re still in the fall.”
Other elements of the vehicle’s development were going well, he said, including one component for the wing assembly called the aft spar that has previously encountered problems but had since been delivered to Virgin Galactic’s assembly facility near Phoenix and installed on tooling there.
“We’re in constant forward motion with parts fabrication and assembly,” he said, both at its suppliers and at the Phoenix facility, where Virgin now has all of the tooling needed for assembly of the spaceplanes.
Progress on a “launch vehicle”
While fabrication and assembly of the spaceplane continues, Virgin Galactic is continuing early work on a new aircraft that will be used to carry the spaceplane aloft. While initial flights will use the existing VMS Eve plane, the company wants to build the additional aircraft to support its expansion plans.
That plane, sometimes called a “mothership,” is now called a “launch vehicle” by Virgin Galactic. Colglazier said the new plane, which will be similar to VMS Eve but with some upgrades, now has the project designation LV-X.
In additional to using LV-X to ferry spaceplanes, Virgin is exploring what other potential interest there would be in a plane capable of carrying heavy loads to high altitudes for extended periods. Colglazier announced on the call that the company is working with Lawrence Livermore National Laboratory on a feasibility study on potential uses of the plane, but said the company will disclose details of that study later.
Any additional uses of LV-X would be ancillary to its primary role supporting spaceflight flights. “The very clear need that we will have for more launch vehicles will be Virgin Galactic’s suborbital spaceflight business,” he said.
The purpose of the ongoing feasibility study is to better understand those potential alternative applications and “ensure that we are building into the design of the Virgin Galactic variant the capacity to adapt that to a government variant,” he said.
Finances and workforce
Virgin Galactic has been funding that work on LV-X through additional stock sales, including $56 million in gross proceeds in the second quarter.
“What we’re doing is building up some more capacity on the balance sheet so that we can expand and keep the engineering teams moving towards the next phase of growth with the launch vehicle,” said Doug Ahrens, chief financial officer of Virgin Galactic. “By bringing in that cash now to allow us to get to that growth, we pull that in, we get to those higher returns, higher EBITDA, much sooner.”
The company ended the second quarter with $508 million of cash and equivalents on hand, which executives said was sufficient to complete development of the initial Delta-class spaceplanes and put them into commercial service.
The company reported reductions in net loss, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss and negative free cash flow in the quarter, which the company attributed to decreases in expenses as the company moves from development into manufacturing. Ahrens said that trend should continue in future quarters but without any big step changes.
One factor in the reduced expenses is cuts in its engineering workforce. The company had brought in contractors to support in-house engineers during design of the spaceship. With that design work “practically complete,” he said, the company moved its own engineers into work supporting building the spaceships or design of the LV-X plane. The company let go nearly 150 contractors, or about 85% of those at the company a year ago.
The company also laid off some of its own engineers given that available work was reduced with the spaceship design phase complete. Ahrens said the overall company workforce was cut by 7%.
“They’re fantastic engineers who’ve really done excellent work,” Colglazier said. “We just don’t have the workload in these two programs for the size of certain departments, and that’s where some of our full-time engineers left the company recently.”