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Tuesday, Oct 3, 2023

Space-Bound Virgin Galactic Nears Liftoff

Exec moves; preps for Q2 paying flights

After years of prep work and tens of millions of dollars spent, one of the world’s first space tourism firms is shaking up its executive team as it transitions from concept to reality.

Virgin Galactic Holdings Inc. (NYSE: SPCE), the most valuable public company based in Tustin and one of the faster-growing aerospace firms in Orange County, this month announced Swami Iyer has departed his post as president of Aerospace Systems. That departure highlights the key role of NASA veteran Mike Moses, who has led flight and mission operations at Virgin Galactic since 2011.

The company also reaffirmed its first paying customers will head skyward during the second quarter of 2023—welcome news for a company that has dealt with various delays as it worked out kinks in its spaceships.

The mothership—Virgin Galactic’s air launch carrier aircraft called VMS Eve—has wrapped up work and was expected to enter ground tests last week, with flight tests to follow.

Tickets cost $450,000 per person for each ride.

“With the completion of the enhancement program for our mothership at hand, our streamlined leadership structure will help propel the business forward as we prepare for commercial spaceline operations,” CEO Michael Colglazier said on Jan. 12.

Deep Expertise

The day following the announcement signaled a positive reception from Wall Street, with shares up 13% to around $5.50.

The company’s market cap soared to $15 billion after it went public in 2019 but has since dropped to about $1.4 billion as of last week.

With the leadership shake-up, Virgin Galactic intends to deliver increased flight frequency and ramp up its fleet development.

More than 800 people have signed up for the sub-orbital flights, a company spokesperson told the Business Journal. Flights will take place out of the company’s’ Spaceport America facilities in the desert of New Mexico.

Iyer joined Virgin Galactic in March 2021 and will continue to serve as an adviser to Colglazier until March 3. The reasons for Iyer’s departure were undisclosed.

“Swami has been instrumental in establishing our future production strategy and in leading the work to prepare our initial ships for commercial flight, and we are incredibly grateful for his contribution,” said Colglazier, who joined Virgin Galactic in 2020 from the Walt Disney Co.­, where he served as president of Disneyland Resort from 2013 to 2018 and later oversaw international parks. His hiring brought about the company’s headquarters relocation from New Mexico to OC.

“Our experienced leadership team brings deep expertise to the next exciting phase for the company—flying our customers safely and regularly to space and expanding our future fleet,” Colglazier said as the company disclosed Iyer’s departure.

The company said Iyer left as part of an “internal reorganization.”

Moses, president of Spaceline Missions and Safety, previously led space shuttle launch operations for 17 years at NASA. He’s joined by Mike Moore, executive vice president of Spaceline Technical Operations and Steve Justice, senior vice president of Spaceline Programs and Engineering.

Revenue Looms

Virgin Galactic has said it plans to work up to about 400 spaceflights a year as it moves to its fourth-generation Delta class of spaceships, or an average of a little more than once a day.

Should Virgin Galactic maintain its projected launch timeline, it will start generating revenue starting next quarter. The company registered a $146 million net loss in the third quarter.

Such flights would generate at least $1.5 million in revenue per spaceflight, according to investor website TheMotleyFool.com, “versus $1.6 million recorded for all of its last 12 months.”

The company is still facing its share of skepticism from the industry, with reports citing legal action against the company over safety and viability.

Local 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.

Local Base, Competition

Virgin Galactic late last year inked a lease to expand its headquarters by 33,755 square feet at the Flight office campus at the Tustin Legacy development, bringing its total footprint there to 110,226 square feet.

The company was advertising nearly 70 jobs in Tustin as of Jan. 16, including engineering, corporate functions and commercial operations. It is estimated to employ about 150 people in OC as of last September, according to Business Journal data.

Other players in the space tourism sector include Jeff BezosBlue Origin and Elon Musk’s SpaceX, the latter of which has a modestly sized engineering department near Flight, in Irvine.

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Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal

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