Virgin Galactic took a step toward reigniting its space tourism business when it rolled its newest ship out of the hangar Wednesday and flew it by carrier to its New Mexico spaceport for months of testing — with the company’s future riding on its success.
The Tustin-based pioneer in recreational space travel retired its four-passenger VSS Unity in June 2024 after seven commercial flights over the course of a year that took some two dozen tourists and researchers to the weightless edge of space without mishaps.
However, after racking up losses, the company decided to focus resources on its new six-passenger Delta class of ships, which Virgin Galactic has spent hundreds of millions developing and hopes to fly twice weekly.
The company envisions a fleet that could generate billions in annual revenue and reported that 675 people had reserved flights at a cost of $750,000 a ticket by the end of last year. It previously charged less per flight.
Chad Anderson, principal of Space Capital, a venture capital firm with more than $1 billion under management, said the key is for its first new Delta class ship Apeiron to get through testing and up in the air after repeated delays.
“Demand’s not a problem; they just need to get flying. It’s a question of whether they can do it every few days, like an airline,” said Anderson, whose firm’s investments include satellite, logistics and launch companies, including SpaceX.
After retiring Unity, Virgin Galactic envisioned flying its new ship this year, but it moved that target date forward to the first quarter of next year before recently pushing it again to the second or third quarter — all while drawing down capital.
The company’s cash and short-term investments have shrunk from $911 million in December 2023 to $596 million in December 2024 to $338 million at the end of last year, according to FactSet. But during a second-quarter conference call, the company’s chief financial officer said it raised $134 million in equity offerings in the quarter and has the capital it needs to finish testing.
Founded by British billionaire Richard Branson in 2004, Virgin Galactic developed its technology in the Mojave Desert with partner Scaled Composites, overcoming an October 2014 crash of the SpaceShipTwo test plane, which broke apart in midair, killing the co-pilot and injuring the pilot.
The company redesigned part of the craft and moved its flight operations near Truth or Consequences, N.M., where it developed its luxurious $200-million plus Spaceport America facility that opened in 2019. It also built a plant in Mesa, Ariz., in 2024, where it is assembling a second Delta class ship. It maintains its headquarters in Southern California.
The company went public in 2019 during the special-purpose acquisition company boom, boosted by its association with the charismatic Branson, who rang the New York Stock Exchange’s opening bell on the company’s trading debut.
Virgin Galactic raised $450 million and, adjusted for a later split in the stock price, shares reached a high of $1,256 in 2021 — before vaporizing as the company faced technical challenges and bled money as investors lost enthusiasm for space tourism. In 2023, it laid off 185 employees.
Shares closed down 2 cents on Wednesday to $2.66, giving the company a market capitalization of $403 million. The cap topped $10 billion at its height.
Branson sold nearly 75% of his shares worth more than $1.4 billion before the stock crash in order to bail out his Virgin Group hospitality and leisure business amid the pandemic, according to the Wall Street Journal. He did not take part in Wednesday’s publicity campaign, and the company did not respond to a question about his role.
During the height of the frenzy over space tourism, Branson and Amazon billionaire Jeff Bezos, the founder of the Blue Origin rocket company, competed to see who could reach space first. Branson beat Bezos by nine days, making it there on July 11, 2021.
Blue Origin later took nearly 100 passengers to space on 38 flights of its New Shepard rocket, including celebrities such as actor William Shatner and singer Katy Perry. It announced in January it was pausing flights to focus on it other business, including development of its larger New Glenn rocket for satellite and other missions, as well as a lunar lander.
By contrast, Virgin Galactic’s ships are dedicated to space tourism. They are lifted off the runway by a dual fuselage carrier plane to about 45,000 feet, where they separate, blast off to an altitude of 50 miles above earth and float back down. While scientific experiments have been conducted on Unity, neither it nor its Delta class replacement has orbital capability.
Still, that leaves Virgin Galactic as the sole provider of tourist flights to the edge of space.
Los Angeles businessman and engineer Dennis Tito was the world’s first space tourist in April 2001, reportedly paying $20 million to fly aboard a Russian Soyuz spacecraft and visit the International Space Station. Since then, by one count, roughly 200 tourists crew members and researchers have made it to space on commercial and private space flights, including tech billionaire and current NASA Administrator Jared Isaacman, who flew twice on a SpaceX Crew Dragon capsule before his appointment. He conducted the first spacewalk by a private citizen in September 2024.
Since the start of the Ukraine war, the Russian space program has not taken private citizens to space, but Chinese companies are making plans, including a Beijing startup called InterstellOr that wants to fly tourists in 2028.
While investors have lost interest in the market, Rachel Fu, a tourism professor at the University of Florida, believes it has a future beyond a niche experience as companies across the world consider entering the business.
“Space tourism could reshape how we define destinations, experiences and even international tourism competition. It is not yet a mass tourism market. The broader economic transformation will take time,” she said.
