Virgin Galactic Aims to Raise $300 Million to Expand Fleet, Accelerate Production of Spaceplanes and Motherships for Space Tourism Growth

Virgin Galactic’s air-launch system, which provides customers with a safe and efficient journey to the edge of space, sets it apart in the commercial space industry. This system utilizes a twin-fuselage mothership, such as the current VMS Eve, which carries the spaceplane to high altitudes before releasing it. Once separated, the spaceplane ignites its rocket motor, ascending rapidly to an altitude above 50 miles where passengers can experience a few minutes of weightlessness and an unmatched view of Earth against the darkness of space. The spaceplane then reconfigures its wings, or "feathers," to safely glide back to Earth, completing the experience with a runway landing.

During a Nov. 6 earnings call, Virgin Galactic CEO Michael Colglazier discussed the company's plans to raise the additional capital and highlighted the advantages of accelerating production. “We have an exciting opportunity to capture economies of scale from our existing investments,” he explained. The funds will primarily be used to develop two more Delta-class spaceplanes, as well as a second mothership, allowing these vehicles to enter service by 2028 instead of 2030. The Delta-class spaceplanes are designed with significant upgrades to support high-frequency flights—potentially as many as 400 flights annually—which is essential for Virgin Galactic’s goal of expanding operations worldwide.

Initially, Virgin Galactic planned to fund the development of additional spaceplanes with revenue from the first two Delta-class vehicles, set to begin commercial service in 2026. However, the company now sees an opportunity to bring in outside funding to speed up the timeline, ensuring that a larger fleet can support Virgin Galactic’s growing customer demand and allow for faster scaling at Spaceport America, the company’s primary launch facility in New Mexico.

Doug Ahrens, Virgin Galactic’s Chief Financial Officer, emphasized the economic impact of this fleet expansion, explaining that a fully utilized Spaceport America would double the company’s revenue but quadruple its earnings before interest, taxes, depreciation, and amortization (EBITDA), as fixed costs would be distributed across a higher volume of flights. “From there, our first fully utilized spaceport becomes the economic engine that generates more than enough cash flow to expand to other spaceports around the globe,” Ahrens said, outlining Virgin Galactic’s vision of a global network of spaceports supporting frequent commercial flights.

Virgin Galactic’s Journey in Space Tourism

Virgin Galactic has worked tirelessly to make commercial space tourism a reality, achieving critical milestones along the way. The company’s first crewed spaceflight, with its spaceplane VSS Unity, reached space in 2018, followed by a groundbreaking flight in July 2021, when founder Richard Branson joined the crew for a fully operational flight. These successes not only solidified Virgin Galactic’s role as a leader in private spaceflight but also highlighted the unique aspects of its air-launch system. Unlike traditional rockets, Virgin Galactic’s spaceplanes use a mothership-assisted launch, providing a smoother, aircraft-style takeoff and re-entry, which enhances passenger comfort and safety.

Virgin Galactic’s commitment to safety is underscored by lessons learned from past incidents, including a tragic test flight accident in 2014. Since then, the company has strengthened safety protocols, contributing to the development of the Delta-class vehicles, which offer enhanced capabilities and improved reliability.

The first Delta-class spaceplane is expected to commence assembly in early 2025 at Virgin Galactic’s new production facility near Phoenix, Arizona. This vehicle, along with others in the Delta line, is designed to operate at high frequencies, supporting Virgin Galactic’s vision of weekly commercial spaceflights from Spaceport America. With the additional $300 million in capital, Virgin Galactic hopes to expand beyond the initial two Delta-class vehicles, bringing a total of four spaceplanes and two motherships into service by 2028.

Expanding the Fleet with New Motherships and Accelerated Production

A significant portion of the proposed capital will be directed towards developing a second mothership, modeled after VMS Eve, Virgin Galactic’s current mothership that has been the launch platform for SpaceShipTwo flights. Virgin Galactic intends to bring the production of this new mothership in-house, with the design phase beginning in 2025, followed by production in 2026 and test flights in 2027. Initially, the company contracted with Aurora Flight Sciences, a Boeing subsidiary, for new mothership production, but this agreement ended in legal disputes, which the companies recently settled. Virgin Galactic has since decided to develop the mothership internally, utilizing its existing engineering and production teams and leveraging subcontractors like Bell Textron and Qarbon Aerospace.

Progress on the Delta-class spaceplanes is well underway, with subcontractors already producing tools and parts. Despite minor design adjustments that required coordination with suppliers, Virgin Galactic remains on schedule for a 2026 launch of its first Delta-class spaceplane. Once operational, the additional spaceplanes and motherships will provide Virgin Galactic with a fleet capable of supporting high-frequency operations at Spaceport America.

Financial and Future Outlook

Virgin Galactic reported revenue of $402,000 for the third quarter and a net loss of $74.5 million, reflecting the significant investments it is making in its future growth. The company ended the quarter with $744 million in cash and equivalents, which provides flexibility on when to raise the $300 million. This cash reserve will be sufficient to bring the first two Delta-class spaceplanes into service, but additional funds will help the company expedite the fleet expansion necessary to scale its space tourism business and establish a global network of spaceports.

With the $300 million in capital and a growing fleet of spaceplanes and motherships, Virgin Galactic is well-positioned to become a major force in commercial space tourism. Virgin Galactic's global expansion plan promises to make the experience of space accessible to thousands, bringing humanity closer to the stars.

By Azhar