Virgin Galactic has had to play third fiddle at best as companies like SpaceX and Blue Origin rule the commercial spaceflight industry - to an extent, it still does. However, new approval from the Federal Aviation Authority (FAA) could plant a rocket booster on the company’s back.
Last week, Virgin Galactic announced that it had gotten approval from the FAA to begin transporting private passengers to space on its VSS spacecraft. The approval essentially grants Virgin Galactic an extension on an existing license, where the firm can fly astronauts and professional test pilots to space with the spacecraft.
Time to Fly?
This is definitely a big deal for Virgin Galactic. With FAA approval, the company has now become the first official “spaceline company”- it’s like an airline but for trips outside the Earth’s orbit. Virgin Galactic is looking to provide regular flights to suborbital space for researchers and tourists. It already explained that some of the experiences it will make available include unmatched views of the planet from outer space and a few minutes of weightlessness. Trips are expected to last up to 2 hours, although there is no price estimate for each one just yet.
Of course, it is worth noting that this is not the last step for Virgin Galactic before it can begin flights for customers who will pay - and those who already have. The company will still need to go through three test flights before it can move forward with these.
The test flights will actually be the first that Virgin Galactic will have with its carrier plane being filled with a crew. Company chief executive Michael Colglazier confirmed that they plan to take the first of those three flights this summer.
Consecutive Wins for Virgin
The FAA approval came after Virgin Galactic had a successful test flight on May 22. The VSS Unity successfully completed its third crewed flight to suborbital space on the day, providing a much better result than what Virgin Galactic had done in December 2020.
The rocket-powered VSS Unity hit an altitude of 55.45 miles, touching Mach 3 in speed before coming back down and coasting off to a New Mexico-based runway. The flight also provided the opportunity for Virgin Galactic to run several tests, including several checks on stabilizers, flight controls, and in-flight surveillance cameras. These are along with the tests carried out as part of the Flight Opportunities Program from NASA.
VS Unity was built to hold a maximum of six passengers, along with two pilots. Progress with it means that Virgin Galactic will have quite a lot of work to do, especially with the company reportedly confirming that it has gotten about 600 reservations for its flight. In context, each ticket costs about $200,000 to $250,000.
Virgin’s space tourists will also have to go through training before they can go into space. With all of them expected to experience weightlessness, there’s a lot of preparation to do.
A Good Win Helps Virgin Galactic Stock
Virgin Galactic really needed that flight to go well. VSS Unity is the company’s first flight since February 2019, and only its third. With so many setbacks already under its belt, the company needed something to lift spirits and make investors happy.
The company’s stock had especially taken significant beatings, with different news and a series of selloffs causing many to lose confidence in Richard Branson’s dream. This year, Chamath Palihapitiya, the billionaire investor who is also Virgin Galactic’s chairman, sold the rest of his personal stake in the company. Palihapitiya had helped take the company public via a SPAC deal in 2019, but he sold 6.2 million shares to cash in on $203 million.
In Mid-April, Branson himself sold over $150 million in stock. This was after a $500 million stock sale that came last year. Branson explained that he was looking to use the funds raised to expand his portfolios in the hospitality and leisure businesses.
The third big bomb came after Ark Invest sold 275, 204 of Virgin Galactic shares from its space exploration exchange-traded fund (ETF). The sale downsized Ark Invest’s stake in the company significantly, with Ark Invest also selling 315,600 shares in Virgin Galactic from its ARLQ "autonomous technology and robotics" fund.
Now that Virgin Galactic is doing its best to move ahead, its stock is doing pretty well. This is the type of news that investors would like to hear for sure.