Virgin Galactic soars after FAA says company can resume flights following mishap probe

• Shares of Virgin Galactic soared after the FAA cleared the company to operate flights again.
• Virgin Galactic flights were grounded pending an FAA investigation.
• The FAA was probing a mishap from Sir Richard Branson's trip in July.

Shares of Virgin Galactic soared on Thursday after the Federal Aviation Administration cleared the space tourism startup to operate flights once again following a probe of Richard Branson's high-profile trip in July.

Virgin Galactic's stock price rose 17% to an intraday high of $26.50 on Thursday.

The aviation regulator on September 2 grounded the company - sending its shares tumbling more than 7% - after a piece by The New Yorker alleged that the company's rocket ships went off-course on its way back to earth and failed to communicate the mishap to the aviation regulator.

"The investigation found the Virgin Galactic SpaceShipTwo vehicle deviated from its assigned airspace on its descent from space," the agency said in a statement. "The FAA also found Virgin Galactic failed to communicate the deviation to the FAA as required.

The agency said it required Virgin Galactic to implement changes and allowed it to resume flight operations once the required amended protocols have been put in place.

Virgin Galactic said the corrective actions proposed by the FAA were executed beginning August 11. These include updating calculations to expand the protected airspace for future flights.

The widely-watched flight carried billionaire Richard Branson, founder of Virgin Galactic, and five others, taking off from a facility in New Mexico.

The plane, The New Yorker reported, did not shoot to space steeply enough, causing it to deviate from its approved flight path on its way back down to Earth. While the two pilots, Dave Mackay and Mike Masucci, were able to correct the error and land safely, they flew outside their airspace clearance zone for one minute and 41 seconds.

"We appreciate the FAA's thorough review of this inquiry," Michael Colglazier, CEO of Virgin Galactic, said in a statement. "The updates to our airspace and real-time mission notification protocols will strengthen our preparations as we move closer to the commercial launch of our spaceflight experience."

Following FAA's clearance, Virgin Galactic can now push through with its space mission with the Italian airforce called "Unity 23." It was initially slated for September or early October. It's now been pushed to mid-October at the earliest because of a possible manufacturing defect.

Shares of Virgin Galactic have swung wildly in the past 12 months, jumping to as high as $62.80, and sinking as low as $14.27.