Air Freight News

Virgin Galactic delays key flight, plans $460 million share sale

Virgin Galactic Holdings Inc. is planning a new share sale and will delay plans to carry founder Richard Branson into space until early next year—a milestone flight seen as the beginning of the company’s tourism business.

Branson’s trip will occur in the first quarter of 2021 instead of this year, assuming two test flights “demonstrate the expected results,” Virgin Galactic said in a statement Monday as it reported earnings. The company said the share offering would generate gross proceeds of about $460 million, to be used for general purposes.

Since Virgin Galactic went public in October, investors have watched keenly for updates on when the company will be ready to begin regular flights—and follow through on its vision of fostering space tourism. Virgin Galactic blamed the latest delay on the coronavirus pandemic, which has limited the number of employees who could gather at company locations in Mojave, California, and New Mexico.

“As always, safety remains the central focus, and the test flight program will progress with a step-by-step, diligent approach,” Virgin said. “Expected dates may adjust as the company processes data from each of its test flights.”

Virgin Galactic fell 7.8% to $22.15 after the close of regular trading in New York. The company had a market value of $5.47 billion at the close.

In the stock sale, the company is offering about 20.5 million shares and expects to grant the underwriters an option to buy another 3.07 million. The expected trading date is Aug. 6, Bloomberg News reported. Credit Suisse Group AG and Morgan Stanley are serving as joint lead book-running managers for the offering.

Test Flights

This fall, Virgin Galactic will conduct an engine-powered flight of its VSS Unity—a first from the company’s Spaceport America facility in southern New Mexico, where it has done two glide tests. The company has already performed engine-powered tests in California.

The New Mexico engine-powered test will be followed by a second flight with four “mission specialists” riding as passengers. In that operation, the Unity will take off on a carrier airplane, detach and use its rocket power to go on a sub-orbital trip to space for 15 to 30 minutes. The vehicle will then glide to a landing at the Spaceport.

The company said it has seen “minimal” requests for refunds from 600 customers who have purchased a ticket to fly on sub-orbital trips. The company has also collected 700 refundable deposits from people interested in eventually buying a ticket.

In addition, Virgin Galactic said it has taken deposits from a dozen customers for its planned orbital spaceflight service.

Executives haven’t determined what to charge for future orbital flights as National Aeronautics and Space Administration opens the International Space Station to tourism. “But we expect pricing to be competitive with other offerings in the market,” George Whitesides, Virgin’s chief space officer, said on a quarterly earnings call.

Boeing Co., the Russian space agency and Elon Musk’s Space Exploration Technologies Corp. all market such journeys. SpaceX completed its first crewed mission to the space station Sunday as its Dragon capsule ferried two NASA astronauts back to Earth.

Earlier Monday, Virgin Galactic said that it would work with Rolls-Royce Holdings Plc to develop a Mach 3 delta-winged aircraft that would fly at an altitude above 60,000 feet and carry between nine and 16 people in a premium cabin. The aircraft would take off and land like other passenger planes at existing airports.

Branson’s Virgin Group remains an early customer for Boom Technology Inc.’s planned supersonic commercial aircraft, with speeds topping twice the speed of sound.

“We’re energized by Virgin Galactic’s announcement today about their future private aircraft program,” Boom’s founder and chief executive officer, Blake Scholl, said in an email Monday. “It’s yet another indicator of supersonic’s inevitable return.”

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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