Virgin Galactic, the renowned space tourism company, has recently announced its decision to reduce the frequency of flights for its current suborbital vehicle, the VSS Unity, and will eventually halt them altogether by mid-2024. This move comes as the company shifts its focus towards the development of its next generation of vehicles. Starting from January 2022, flights of the VSS Unity will be conducted on a quarterly basis, with the possibility of a third mission in mid-2022 yet to be confirmed.
In order to concentrate its resources on the new Delta-class vehicles, which Virgin Galactic deems crucial to its future success, the company plans to lay off 185 employees, representing 18% of its current workforce. The decision to reduce flights stems from the company’s belief that it has already gained the necessary insights from its spaceflight operations and customer experiences. Virgin Galactic will now direct its attention towards higher-revenue opportunities, such as research initiatives and offering seats to private astronauts at a premium price point.
As the Unity flights draw to a close, the company will redirect its staff to a new factory in Phoenix, Arizona, where they will assist in the assembly of the first Delta-class vehicles. The combination of layoffs, cost-cutting measures, and a recent stock sale is anticipated to provide sufficient funding for the development of Delta vehicles and commercial flights slated for 2026. Unlike the current suborbital vehicle, the Delta-class vehicles are expected to have twice-weekly flights and the capacity to accommodate six customers, thereby offering a higher revenue potential.
This projected increase in revenue, coupled with reduced expenses, is estimated to result in positive cash flow for Virgin Galactic in 2026. In the third quarter of this year, the company reported revenue of $1.7 million; however, it also incurred a net loss of $105 million.
Virgin Galactic’s strategic decision to shift its focus towards next-generation vehicles and higher-revenue opportunities reflects its commitment to advancing the field of space tourism. By streamlining its operations and directing its efforts towards innovative technological advancements, the company aims to establish itself as a pioneering force in the commercial space travel industry.
