Virgin Galactic posts loss, touts future potential revenue

ALBUQUERQUE, N.M. (AP) — Virgin Galactic on Tuesday reported a first-quarter net loss of $60 million but touted millions of dollars in potential future revenue as more people have put down deposits for the chance to reserve a ticket once the commercial space venture resumes sales.

Company officials outlined earnings for the quarter during a webcast that came just days after Virgin Galactic celebrated the first glide flight of its spaceship over its new home at Spaceport America in southern New Mexico. The company is in the midst of final testing but has yet to offer a date for the start of commercial flights.

Virgin Galactic CEO George Whitesides said the company is encouraged by the response to its “One Small Step” initiative, which allows people interested in the supersonic rides to make refundable deposits. Since the program was launched in February, more than 400 payments have been received from people in 44 countries.

Whitesides said that beat expectations and represents more than $100 million of potential future revenue upon full ticket payment.

Like other businesses, Virgin Galactic also has been adjusting to life amid the coronavirus outbreak. At Virgin Galactic's terminal and hanger at the spaceport, new protocols have been adopted, including the use of masks, changes to work areas and new procedures for disinfecting surfaces and enforcing social distancing.

A total of 579 employees and contractors have been tested as of May 1, officials said.

“The COVID-19 outbreak led to an unprecedented situation for companies and individuals across the world, but I am encouraged by the commitment displayed by our team in helping to support relief efforts while making program progress,” Whitesides said in a statement. "We remain focused on our strategic goals and our path to commercial launch.”

Virgin Galactic and its subsidiary The Spaceship Company also announced Tuesday the signing of an agreement with NASA to facilitate the development of technologies capable of Mach speed that could potentially be used for civil applications. The aim is to boost efforts in the U.S. to develop a vehicle for the next-generation of high speed air travel.

Virgin Galactic marks a bright spot in British billionaire Richard Branson's empire, as his Virgin travel and tourism companies have taken a big hit as a result of public health orders issued around the globe and the economic fallout from the coronavirus pandemic.

Branson put it bluntly in a recent open letter to the tens of thousands of workers employed by the Virgin brand: “The challenge right now is that there is no money coming in and lots going out.” He vowed to continue investing to protect as many jobs as possible.

Whitesides said despite the challenging times, Virgin Galactic has no debt and is in a strong position with cash and cash equivalents of $419 million.

Virgin Galactic is the anchor tenant of the taxpayer-financed Spaceport America — the world’s first facility designed and built specifically for launching commercial passengers and payloads into suborbital space. The company now has close to 180 people working out of the desert outpost.

The idea was first hatched some 15 years ago by Branson and former Gov. Bill Richardson to build a spaceport in New Mexico and launch paying customers into the lower fringes of space where they could experience weightlessness and get a view of the Earth below. The suborbital flights are designed to reach an altitude of at least 50 miles (80.5 kilometers) before gliding to a landing.

The spaceship is the result of years of development and testing at Mojave Air & Space Port in Mojave, California. The craft is ferried to a high altitude by a much larger carrier aircraft before it's released and its rocket engines are fired.

More than 600 customers from around the world have purchased tickets. In addition to the 400 that have put down deposits, 9,160 have registered their interest online. Company officials expect the interest to surpass the company’s capacity for flights for a few years.

The focus now, Whitesides said, is to complete the test flight program as soon as possible. He said Virgin Galactic has completed 24 of the 29 requirements laid out by the Federal Aviation Administration's verification and validation program.