A sign stands outside the entrance to Spaceport America, prior to the launch of Virgin Galactics SpaceShipTwo Unity, July 10, 2021 in Truth Or Consequences, New Mexico. (Photo by David Lienemann / Getty Images)
Billionaire Richard Branson-backed space ventures aim to shoot for the stars, but one has landed in bankruptcy court this week – raising questions about the future of New Mexico’s long-promised space tourism business.
Virgin Orbit, a satellite-launching business, filed for Chapter 11 Bankruptcy in a Delaware Court Tuesday following weeks of upheaval. After a rocket mishap in January, the company failed to raise enough money to operate, which culminated in laying off 85% of the company’s 750 employees this week. The company will seek a buyer as bankruptcy proceedings continue, according to court documents.
Virgin Orbit – based in Long Beach, California – launched small satellites using a combination of rockets and a modified carrier airplane. Virgin Orbit was founded in 2017 as a spinoff company from spaceflight venture Virgin Galactic, which aims to make space tourism a reality – most recently at $450,000 a ticket. Virgin Orbit promotional materials call the two “sister companies.”
Virgin Galactic is the “anchor tenant” and largest employer at the Truth or Consequences-adjacent Spaceport America – a publicly owned site to launch and land spacecrafts that cost New Mexico nearly $220 million to build. Virgin Galactic has been promising spaceflight tours out of the spaceport since 2008. British billionaire Branson would later publicly say flights would start in 2011, 2014, 2015, and 2018. The first fully crewed spaceflight took off from the Spaceport in May 2021 featuring Branson and five employees. In a February earnings call, CEO Michael Colglazier told investors that commercial flights would begin at the Spaceport by June 2023 after a series of test flights. More than 600 people have paid for tickets, some of those are more than a decade old.
Virgin Orbit is one company. Virgin Galactic is another. But among the risks of doing business — from concerns of accidents to high costs of building space crafts — Virgin Galactic officials said that bad publicity at one brand can mean trouble for another.
“Any adverse publicity in relation to the Virgin brand name or its principals, or in relation to another Virgin-branded company over which we have no control or influence, could have a material adverse effect on our business, financial condition and results of operations,” the company wrote in a 2020 federal filing with the Securities and Exchange Commission, when officials were taking the company public.
Tom Fullerton, a professor in economics at University of Texas at El Paso, said he’s unaware if other companies named bad publicity for a brand name as a risk factor, but said it makes sense in Virgin Galactic’s case.
“When you’re dealing with these new technologies, the new products and services that are directed towards a very, very narrow market niche, it’s not surprising that type of language is included in the prospectus,” he said.
Virgin Orbit’s bankruptcy filing “will probably have a temporary effect” on Virgin Galactic’s ability to raise money, he said. Fullerton added that in prior years a loss could have posed a threat to Spaceport America operations, when Virgin Galactic was their sole tenant.
“But fortunately, the spaceport has diversified well beyond just Virgin Galactic,” he said.
In recent years the spaceport added five long-term tenants. These include Colorado-based launch provider UP Aerospace, centrifuge satellite launcher SpinLaunch, Virginia-based defense contractor AeroVironment, and their partnership with a Japanese conglomerate to create HAPSMobile, which develops and launches solar gliders.
Spaceport America spokesperson Alice Carruth declined to make any Spaceport officials available for comment.
“We do not have connections to Virgin Orbit and although both companies have the same parent company, they are very separate operations,” Carruth wrote in an email. “We do not comment on companies that are outside of our business operations.”
Carruth deferred all questions about the proposed 2023 commercial flights to Virgin Galactic.
“They put out their operations publicly when they want to,” Carruth said. Outside of that, we are not able to discuss their operations.”
Virgin Galactic provided no comment to emailed questions and declined an interview.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site.