The sky isn’t the limit for Virgin Galactic Holdings Inc.’s Michael Colglazier. The chief executive of Orange County’s newest billion-dollar public company wants to send thousands of people into space starting next year.
“We’re here to scale this business up [and] drive our costs down, so that we can do what our purpose is,” Colglazier said this month.
Commercial service for the Tustin-based space tourism company (NYSE: SPCE) is expected to start in the first quarter of 2023, a bit later than the time frame set out earlier this year, with a second spaceship to start service in the middle of next year.
“We expect them in ’23 to be going to space three times a month when they’re both in service,” he said.
The company plans to work up to about 400 space flights a year as it moves to its fourth-generation Delta class of spaceships, or an average of a little more than once a day.
That plan is a historic one; even so, it’s “not where we want to stop.”
So far, only 623 people have flown into space, including just 71 women, Colglazier said.
About 800 people have signed up for a Virgin Galactic ride, which costs $450,000 a ticket. The firm completed its first fully crewed spaceflight, Unity 22, last July, with multibillionaire backer Richard Branson as a passenger.
Virgin Galactic said May 5 that “demand for tickets remains strong,” for the sub-orbital flights.
Colglazier, an OC local and the former president of Anaheim’s Disneyland Resort from 2013 to 2018—where he headed the planning for the $1 billion-valued Star Wars: Galaxy’s Edge—was the keynote speaker at the Octane Tech Innovation Forum 2022 on May 10 in Irvine.
The company’s market cap soared to $15 billion after it went public in 2019, but was closer to $1.7 billion as of last week.
Shares in Virgin Galactic early last week were trading at $6.53 apiece, less than half their value at the start of the year.
Orange County’s ties to space travel, and its tourism industry, got a boost when Virgin Galactic moved its headquarters designation to Tustin earlier this year.
“That’s where we will be designing the Delta class of ships,” Colglazier said.
The Business Journal in April was first to report that the upstart space tourism company changed its headquarters designation from New Mexico to a 61,000-square-foot site at the Flight office campus within the Tustin Legacy development, near the intersection of Barranca Parkway and Red Hill Avenue.
“We’re coming into Orange County. We’re going to be building up a really large engineering staff here.”
The Tustin office has quickly become an innovation and collaboration hub, Colglazier said.
“We’re succeeding in bringing people in because people see ambition. They see excitement.”
Virgin’s website last week was listing several dozen open jobs in Tustin, including aerodynamics engineer and an engineer on its new Dawn Mothership production platform, which will “deliver compelling views of the Earth from space and a one-of-a-kind apogee experience our passengers will never forget,” the company said in the job listing.
Along with R&D and design work, the local executive offices also house the company’s marketing, finance and other administrative functions.
The company has a way to go before becoming profitable. Analysts on average expect losses both this year and next. It burned through $68 million in the first quarter with another $80 million to $90 million expected this quarter. The company has $1.2 billion in cash, cash equivalents and marketable securities as of March 31.
Still, analysts are estimating that sales will soar almost sevenfold to $38.7 million in 2023 from an expected $5.7 million this year.
While its headquarters touched down in OC this year, Virgin Galactic is keeping its operational base at Spaceport America in New Mexico, which the company calls “the world’s first purpose-built commercial spaceport” that includes a 12,000-foot long by 200-foot wide runway.
The state and local governments of New Mexico have invested more than $200 million in Spaceport America, which is located in an area near Las Cruces. The Spaceport has 27 square miles of desert landscape, with access to 6,000 square miles of restricted airspace.
Virgin Galactic bills itself as the “world’s first commercial spaceline,” and became the first space tourism company to go public in October 2019, when it closed on a reverse merger with Social Capital Hedosophia, a New York-based special purpose acquisition company.
Other players in the space tourism sector include Jeff Bezos’ Blue Origin and Elon Musk’s SpaceX, the latter of which has a modestly sized engineering department near Flight, in Irvine.
Area execs reported to have signed up for the 90-minute, sub-orbital journey—which includes about five minutes in which passengers can leave their seats and experience weightlessness—include Julie Hill, chair of the UCI Foundation.
CEO Colglazier struck a poetic note as he talked to the Octane crowd.
“It is embedded in humans to want to look up, to want to journey, to want to have this heroic venture up above the Earth and give people a gift where they can look back on this planet and use that gift to come back and make change in the world.”
In short: “People come back changed.”
Don’t Call it a Billionaire Space Race
During a speech at the Octane Tech Innovation Forum 2022 on May 10, Virgin Galactic Holdings Inc. CEO Michael Colglazier took issue with the term “billionaire space race” after his company’s Richard Branson and rival Blue Origin founder Jeff Bezos took highly publicized rides last year.
“The notion of two billionaires going to space and two billionaires going to space after 20 some years of working on their companies in general proximity to each other was just too much for the world of media to withstand, and thus was born the billionaire space race,” Colglazier said.
He good-naturedly pointed to a parody take on the development on “Saturday Night Live” that depicted the space billionaires in a skit called “Ego Quest” in October. It was “actually hysterical; they did a really great job with it,” Colglazier said.
But “after those two flights, the discussion went a little bit—a lot in my opinion—too much into billionaire space race.”
“Is that what this is for? Is it just to go up and come down and get an image or get a selfie? No, I think that fully missed the point.”
He said Virgin Galactic needs to continue emphasizing the advances it is making by taking people into space and returning them with renewed perspectives on planet Earth.
“We want commercial space industry growing and learning.”