Virgin Galactic falls after delaying first commercial flight

Shares slide on unexpected rescheduling to late next year; Company cites potential issue with joint materials in lab test

(Bloomberg) — Virgin Galactic Holdings Inc. is pushing the start of commercial flights further into next year after rescheduling a test flight, disappointing investors with the unexpected delay to its space tourism business plans.

A program to upgrade the company’s spaceplane is taking place a month later than anticipated, forcing the delay of a planned research mission with a crew of four and the start of commercial service into the fourth quarter of 2022, it said Thursday.

Virgin Galactic’s VSS Unity, with billionaire Richard Branson on board, after landing on July 11. Photographer: Patrick T. Fallon/AFP/Getty Images

Shares of the company fell 20% in premarket trading to $19.15 as of 5:06 a.m. in New York.

Virgin Galactic had told analysts in August it was targeting its first private astronaut flight for “late Q3” next year.

A recent lab test identified a possible issue with the strength margins of certain materials used to modify joints that will require further analysis but have “no impact” on its space vehicles, Virgin Galactic said.

“Our decisions are driven by detailed and thorough analysis, and we fly based on the most accurate and comprehensive data available,” Michael Colglazier, the company’s chief executive officer, said in the statement.

Virgin Galactic, founded by entrepreneur Richard Branson, has been working to commercialize space flight since 2004. It received regulatory approval from the Federal Aviation Administration to fly customers into space in June.

The rescheduling is unrelated to an internal probe into a potentially defective part, Virgin Galactic said. Last month, it delayed the flight window for the research mission to mid-October due to a possible problem with a flight control actuation system component.

The upcoming research flight is scheduled to include two members of the Italian Air Force, an aerospace engineer and a Virgin Galactic employee.

The FAA lifted a ban on the company’s test flights last month after concluding an investigation into Virgin Galactic’s failure to inform the agency of an errant trajectory in a July 11 launch, which carried Branson and three others. The regulator had grounded it on Sept. 2.

(Updates with pre-market trading in fourth paragraph)

— By Chester Dawson

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