In a decisive move, Sir Richard Branson has declared his withdrawal from additional financial investments in Virgin Galactic, his space travel venture. This announcement comes as Virgin Galactic, established in 2004 by Branson, grapples with financial struggles, compelling the company to halt commercial flights for 18 months starting next year and reduce its workforce. The aim is to conserve resources for the development of a new, larger aircraft, the Delta, designed to transport passengers to the edge of space.
Branson’s decision is shaped by the economic aftermath of the Covid-19 pandemic, which has significantly impacted his business empire, leading to a reassessment of priorities and resources. Virgin Galactic, however, maintains that it has sufficient funding to continue operations until 2026, the anticipated year of Delta’s entry into service. Despite this, some financial analysts predict that the company might seek additional investor funding around 2025.
The recent development marks a notable shift for Branson and Virgin Galactic, which has completed six commercial flights in the past six months, with ticket prices starting at $450,000 per seat aboard the Unity space plane. Virgin Group, while still one of the largest shareholders in Galactic, has reduced its stake to 7.7% after selling shares worth over $1 billion between 2020 and 2021 to support other sectors of its extensive leisure and travel portfolio during the pandemic.
The contrast with Virgin Orbit, another of Branson’s space ventures that ceased operations eight months ago following a failed UK mission, is stark. Analysts suggest that Virgin Galactic has learned from Orbit’s downfall, choosing not to exhaust its funds on unprofitable flights. The upcoming Delta vehicle, capable of carrying six passengers compared to Unity’s four and expected to launch more frequently, represents a strategic pivot towards operational efficiency and scalability.
Virgin Galactic, which has not yet reported a profit, was valued at $2.3 billion at its 2019 debut on the New York Stock Exchange but has since seen its valuation drop to $935 million. Despite these financial challenges, Branson, who now dedicates 90% of his time to philanthropy, remains actively engaged with the Virgin Group. The business magnate also hinted at a potential re-entry into UK rail services, a sector Virgin exited in 2019.
In addition to these developments, Branson emphasized the importance of sustainable fuels during a recent Virgin Atlantic flight from London to New York, powered partly by reused cooking and animal fats. He advocated for greater collaboration between the government and the industry to bolster the sustainable fuels sector and reduce reliance on imported oil.
This turn of events reflects the dynamic and challenging nature of the commercial space flight industry, with Virgin Galactic at a crucial juncture. Branson’s decision to halt further investment in the company marks a significant moment in the history of Virgin Galactic, as it strives to navigate through financial constraints while continuing its quest to pioneer commercial space travel.
