Sir Richard Branson has ruled out putting more money into his losing space travel company Virgin Galactic, saying his business empire “no longer has the deepest pockets”.
Virgin Galactic, founded by Branson in 2004, announced last month that it was cutting jobs and suspending commercial flights for 18 months from next year, in a bid to preserve cash for the development of a larger aircraft that can take passengers to the edge of space.
The group says it has enough funding to carry it through 2026, when Delta’s larger vehicle is expected to enter service. But some analysts expect Galactic to ask investors for more money around 2025.
Asked if he would consider putting more money into the business if necessary, Branson told the Financial Times: “We don’t have the deepest pockets after Covid, and Virgin Galactic got $1 billion, or close to it. We should, I believe. , has enough funds to do his work himself.
Branson said he “still loves” the Virgin Galactic project and that it has “really proven itself and the technology” in commercial spaceflight. Galactic just completed its sixth commercial flight in six months, with tickets starting at $450,000 per seat on the rocket-powered unity plane.
Virgin Group is still one of Galactic’s largest shareholders, despite selling more than $1 billion in shares in 2020 and 2021, reducing its stake to 7.7 percent and using the funds to protect other parts of the expanding entertainment business. and travel business during the pandemic.
Branson’s rocket start-up, Virgin Orbit, collapsed eight months ago after a failed launch from the UK, its first of five missions. The startup, 75 percent owned by Branson, has run out of cash as its UK mission has encountered repeated delays.
Analysts say that Galactic has learned the lesson of Orbit and is not ready to spend all its money on missing flights. “This business is built to operate at scale and with Unity flights alone you know it’s not going to reach the scale it needs and cover its costs,” said Greg Konrad, analyst at investment bank Jefferies. Delta is expected to carry six passengers, versus Unity’s four, and will launch more frequently.
Galactic, which has yet to make a profit, was valued at $2.3 billion when it debuted on the New York Stock Exchange in 2019. The company was valued at $935 million at the close of trading on Friday.
Branson, who has spent decades burnishing his business image with high-profile adventures and stunts, said he now spends 90 percent of his time on philanthropic work, but that there is still “a hell of a lot in many events” of the Virgin Group.
The group owns an investment portfolio that includes stakes in a variety of businesses including travel, entertainment and telecoms.
Branson also said the business could be involved in UK rail services. Its involvement ended in 2019 after Virgin Trains lost the West Coast franchise. “I wouldn’t be surprised if one day the Virgin doesn’t return to trains,” he said.
Branson spoke to the FT on a Virgin Atlantic flight which was the first to fly from London to New York on used cooking and animal fats.
He said the UK should support a sustainable fuel industry, in part to reduce its dependence on imported oil.
“The government needs to sit down with the industry just to open the books and see how we can do this,” he said.
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