Friday, 17 March 2023

Virgin Orbit pauses operations for a week to conduct a search for cash

by Berkeley Lovelace

Virgin Orbit is halting all operations for a week to save money while it “conducts discussions with potential funding sources and explores strategic opportunities,” the company announced in an SEC filing. The company has been struggling financially and a recent launch failure clearly exacerbated those issues.

The January launch was accompanied by much fanfare, as it was very possibly the start of a new British space economy with Virgin Orbit in pole position. But the rocket, launched via the company’s signature custom plane method, failed to reach orbit, as we now know due to a single faulty fuel filter the effects of which cascaded through the system and caused the abort.

This high-profile failure came at a time when the company was already on shaky ground financially. It has largely been funded by its parent company Virgin for the long and expensive development and testing period, and more recently by private capital and Virgin’s billionaire founder Richard Branson. The big British launch was to be the beginning of something new for the company.

But it’s expensive to run a full-service orbital launch company, and when an anomaly occurs it leads to costly refits and testing, and the delay of profitable operations.

Virgin Orbit has said that it hoped to reach more than $2 billion in revenue by 2026, which at current costs would necessitate about 175 successful launches per year. Although its air launch method has some advantages in cost and flexibility, it’s hard to imagine the company scaling to that level even before the disaster in January.

Today’s week-long pause of operations will save a little cash, and perhaps give everyone the time they need (away from all the pressing rocket-building work) to take stock of the company and its prospects, and then convince either investors or a buyer that Virgin Orbit is worth launching itself.

The company said it expects to get back to work on the 21st.

“[Virgin Orbit] anticipates providing an update on go-forward operations in the coming weeks. On the ops side our investigation is nearly complete and our next production rocket with the needed modification incorporated is in final stages of integration and test.”

Virgin Orbit pauses operations for a week to conduct a search for cash by Devin Coldewey originally published on TechCrunch