Virgin Galactic slips 14% on further test flight delay, pushing commercial service launch to 2022

• Shares of Virgin Galactic Holdings tumbled 14% on Friday after it announced that it would push its next test flight to May.
• The postponement pushes commercial service to 2022.
• The company currently has 600 people who have paid for trips to space.
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Shares of Virgin Galactic Holdings tumbled 14% on Friday after the spaceflight company announced that it is delaying the next test flight of its SpaceShipTwo suborbital vehicle to May this year, pushing back commercial service to 2022.

Virgin Galactic was initially targeting February 13 to test its SpaceShipTwo vehicle "Unity." Days before, the company canceled due to "technical checks," in particular, an increased level of electromagnetic interference. Shares of the company fell 12.5%.

The February flight was Virgin Galactic's second attempt after its rocket failed to reach outer space as planned in December, in what would have been a significant step in the company's 17-year journey toward launching paying space tourists. The flight was halted due to a rocket motor's ignition sequence but landed safely at Spaceport America in New Mexico.

If the May retest is successful, Virgin said it will plan a second powered flight, which will be a crucial step before commercial flights can begin.

Virgin Galactic CEO Michael Colglazier during the conference call on Thursday admitted that commercial service is not expected to begin until 2022. He did not provide a specific date but on whether the three test flights will be, but he did disclose that the third, which will be carrying billionaire founder Richard Branson, will transpire "this summer."

The Las Cruces, New Mexico-based company also revealed plans to launch its first revenue flight late summer or early fall this year, which will carry onboard three members of the Italian Air Force. After this, Virgin Galactic plans to pause so that it can continue its preparation to take commercial customers for 2022. The company currently has 600 people who have paid for trips to space.

The company on Thursday reported a loss of $0.31 per share on zero revenue, in line with analysts' expectations. It also had zero revenue the previous quarter. It reported an adjusted EBITDA loss of $59.5 million, lower than the loss of $66 million in the previous quarter.

"We did not generate significant revenue in 2020," Virgin Galactic CFO Jon Campagna said.

The company has $666 million in cash as of December 31, 2020, lower than the $742 million in the previous quarter.