With the release of its second-quarter 2021 results on Thursday (August 5, 2021) after the market closed, shares of Virgin Galactic (NASDAQ: SPCE) rocketed as much as 11% higher the next morning — and not because its top- and bottom-line results outpaced expectations. The world’s first commercial spaceline delivered revenue of just $571,000 last quarter — a modest sum stemming from scientific research experiments carried for NASA on its May 22 test flight — translating to a quarterly net loss of more than $94 million.

But our market is a forward-looking machine. Investors are excited today that the company offered clarity on several impending catalysts for its business, including reopening ticket sales, scaling its fleet, and plans for commencing commercial service.

So why is this important? Other privately-owned competitors in the space tourism market have remained largely quiet on the specific details of their programs. By contrast as the only publicly traded space tourism company, Virgin Galactic just effectively provided as concrete a framework for the early stages of the broader space tourism market as we’ve seen to date.

Let’s dive in then, to see what Virgin Galactic said.

On reopening sales, pricing, and early demand

First, Virgin Galactic reopened sales for its suborbital flights starting at $450,000 per ticket, effective immediately, including options for single-seat purchases, multi-seat couples, and full-flight buy outs. However you slice it, this is a significant bump from the $250,000 average price paid by its first 600 “Future Astronauts” to secure their places in line before the company last closed reservations in late 2018.

It’s also inline with early pricing models Virgin Galactic highlighted just prior to going public in late 2019, namely to illustrate the impact on its total addressable market by starting high, then lowering its per-ticket prices in the coming years as it begins to scale (more on that below):

Subsequent to closing sales in late 2018, Virgin Galactic also previously accepted $1,000 refundable deposits from nearly 8,000 individuals through its separate “One Small Step Program.” After this group is given the first opportunity to reserve flights at Virgin Galactic’s new higher price point, the company will then open a follow-on priority list to those interested in reserving future spaceflights.

And Virgin Galactic isn’t the only space tourism business to tout strong demand. Following his own suborbital spaceflight in July, Blue Origin founder Jeff Bezos teased that “demand is very, very high” as his company was already approaching $100 million in private sales. However, Blue Origin hasn’t explicitly disclosed its number of reservations or per-ticket prices for these private sales yet — though various sources have asserted the latter is “well north of $500,000.”

On raising cash, next flights, and a timeline for commercial service

Next, Virgin Galactic also confirmed on Thursday (August 5) that it has completed its previously announced at-the-market offering, raising $500 million in gross proceeds through the sale of 13.7 million shares of common stock (good for an average of roughly $36.39 per share, according to the company). That leaves the company well-capitalized to fund the growth initiatives we’ll discuss below, with around $1 billion in cash and cash equivalents on its balance sheet as of this writing.

Virgin Galactic further said the next rocket-powered spaceflight of its VSS Unity spaceship, dubbed Unity 23, is targeted to occur in late-September. Intended for microgravity research and astronaut training with the Italian Air Force, this flight will mark Virgin Galactic’s first full revenue-generating flight.

After Unity 23, Virgin Galactic will then immediately begin an extended “enhancement period” with goals of improving durability for the VMS Eve — the mothership that carries Unity to altitude before dropping it for the rocket-powered portion of the flight — and reducing turnaround between Unity flights to a range of four to five weeks (down from around seven to eight weeks currently). That enhancement period should be completed by around midyear 2022, and will be followed by one last test flight (Unity 24) of mission specialists to confirm the enhancements are functioning as planned.

Virgin Galactic will also simultaneously complete the first glide flight of VSS Imagine — a sleek new spaceship unveiled in March 2021 — at this time.

Then finally, starting in the third quarter of 2022, Virgin Galactic will be able to begin flying its paid reservation holders with the commencement of its commercial private astronaut service, using its VMS Eve mothership and the VSS Unity spaceship. What’s more, according to CEO Michael Colglazier during this quarter’s call with analysts, the next-gen VSS Imagine spaceship will complete its rocket-powered flight testing in parallel with the start of VSS Unity’s commercial service. Once fully tested and brought into active service, VSS Imagine will offer “meaningfully shorter” turnaround than the four to five weeks targeted for Unity flights.

On scaling the fleet, next-gen spaceships

In the meantime, Virgin Galactic will be working separately toward developing and building a fleet of its next-generation production mothership and spaceships, dubbed the “Delta Class” of vehicles. While these Delta Class spaceships will be functionally the same as the Spaceship III class of vehicles (including VSS Imagine and the yet-to-be-built VSS Inspire spaceship), they will be capable of turning around flights on a one-week interval with minimal maintenance.

Colglazier elaborated during the call that Virgin Galactic’s engineering team should have design trade studies for the next mothership platform and Delta ships “later this month,” and that these Delta Class vehicles will ultimately “constitute the bulk of [Virgin Galactic’s] flight capacity over time.”

Until then, however, Virgin Galactic’s near-term flight cadence will be dependent on its ability to minimize turnaround for the flights with VMS Eve, VSS Unity, and VSS Imagine.

On new spaceports, future ambitions

Finally, Virgin Galactic VP Seth Zaslow provided the latest updates on the company’s longer-term aspirations during the call, stating [emphasis mine]:

The incredible response to the Unity 22 flight reinforced the enormous interest and demand there is for our offering globally. To begin to address that demand, our long-term objective is to operate a near daily cadence of spaceflights, and not just from New Mexico, but from multiple locations around the world. As we’ve said previously, this is going to require a significant increase in manufacturing capacity, with each spaceport needing high single-digit to low double-digit numbers of spaceships, along with multiple motherships to carry the spacecraft to launch altitude. Of course, how many ships we need will depend on how quickly we can turn them around, which is why we are laser focused on refining our ships to make turnaround and maintenance even more streamlined.

In addition to building out the campus and luxury accommodations at its current Spaceport America location in New Mexico, Virgin Galactic already has agreements in place to eventually launch spaceflights from the UAE and Italy and maintains a longer-term vision for developing a global network of spaceports to support its business. This network will enable the company to not only support the daily launch cadence with multiple spaceships for commercial suborbital tourism flights, but in time will also allow it to bring the advent of hypersonic point-to-point flights around the world.

To be clear, as indicated by the planned late-2022 commencement of even limited commercial flights from Virgin Galactic, we’re still several years away from achieving such scale. Even so, I look forward to watching the rise of space tourism dominate headlines for those years to come. And I believe Virgin Galactic’s move to reopen ticket sales yesterday marks a watershed moment for both space tourism and the broader space economy.

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