Virgin Galactic: High Losses, Minimal Revenues & A lot of “Registrations of Interest”

A view from inside the cockpit. (Credit: Virgin Galactic)

by Douglas Messier
Managing Editor

Richard Branson’s now publicly traded Virgin Galactic space tourism company had its first quarterly and full year earnings call on Tuesday. You can read the press release here. Below are the key takeaways.

Burning cash: Net losses were nearly $72.8 million for the fourth quarter and $210.9 million for 2019. Net losses for 2018 and 2019 totaled $349.1 million. Total expenditures since 2004 have exceeded $1 billion.

EBITDA: Earnings before interest, taxes, depreciation, and amortization were negative $55 million for the fourth quarter, which was above analyst’s estimated loss of $46.9 million. The stock, which has been rising, declined slight on the news.

Revenues: Virgin’s revenues totaled $529,000 from “engineering services” for the quarter and $3.78 million for the full year. Revenues for 2018 and 2019 totaled $6.63 million while the company lost nearly $350 million during that period.

Branson’s Birthday Flight: In recent months, Virgin Galactic officials have talked about flying Branson on the first commercial flight for his 70th birthday on July 18. Although launching Branson into space this year remains a goal, it sounds like that won’t happen in the next five months.

Officials said although it would be nice to begin earning significant commercial flight revenue this year, the focus on flying the vehicle safely and making sure passengers is excellent from beginning to end.

SpaceShipTwo Unity’s flight test program remains ongoing at its Spaceport America operational base in New Mexico. That program will include glide and powered flights. Modifications will be needed to the passenger cabin based on these tests.

Virgin Galactic said it has completed 20 of 29 steps required by the Federal Aviation Administration (FAA) before it can begin commercial flights.

Interest is Way Up: Virgin said it has received 7,957 “registrations of interest”, which is more than double the 3,557 registrations it reported in December. What precisely that means is not entirely clear. Apparently anyone can register interest by filling out a form on the company’s website.

Passenger Deposits: Starting today, would-be passengers can put down $1,000 refundable deposits to get first dibs on the next tranche of tickets to be released once commercial service begins. The newbies will fly after the 603 current registration holders do.

Ticket Prices: They’re going up again. The price rose from $200,000 to $250,000 after the first powered flight in April 2013. Virgin said those putting down new deposits will buy at a still-to-be-determined higher price when tickets go on sale again in the future.

That’s just for a basic ticket. Virgin is also implementing a premium pricing model for special flights, with details to be announced later this year. Want to be aboard an early flight? To fly with a particular celebrity such as, say, Branson? Or charter a flight for a few friends? Look to pay three to five times more for your ticket.

SpaceShipTwo VSS Unity, which will be the first vehicle to fly, will initially carry four passengers in addition to two pilots. Later spacecraft will be able to carry five and six people in the cabin.

Virgin Galactic also reiterated its desire to lower ticket prices through efficiencies and other cost cutting measures to tap into a larger market. No one privided a number or a timeline yesterday, but the company has floated a price of $50,000 in the past.

High Speed Transportation: Virgin Galactic believes that the experience flying SpaceShipTwo at speeds of Mach 3 can be applied to supersonic and hypersonic high speed transport aircraft.

The company is working with Boeing in these areas. Boeing owns 1 percent of Virgin Galactic based on an investment of $20 million.

WhiteKnightTwo Uses: Virgin officials said there is strong interest in using WhiteKnightTwo carrier aircraft as a platform for launching vehicles other than SpaceShipTwo. For the foreseeable future, the company’s focus will be on launching SpaceShipTwo suborbital service.

Researchers: In addition to fly passengers, SpaceShipTwo can carry research payloads. NASA is considering expanding the Flight Opportunity Program the space agency has used to fund the payload flights to allow researchers to fly along with their experiments.