Back in June 2024, Virgin Galactic, a leader in space tourism, marked a key moment with the final flight of its Unity spaceplane packed full of space tourists. Since then, they’ve been hard at work on a brand new spaceplane called the Delta class, which is set to revolutionize their operations.
The Delta class, expected to start operations by 2026, promises several upgrades over its predecessor, Unity. Unity’s operations were hindered by extensive refurbishing needs and engine swaps, allowing only one flight a month. The Delta class, on the other hand, plans to fly twice a week. This is a crucial boost for Virgin Galactic’s earning potential, especially when paired with the increased passenger capacity. While Unity carried four tourists, the new spaceplanes will host six paying passengers each flight.
With this capacity boost, Virgin Galactic could see a 50% increase in passenger numbers combined with a ninefold uptick in launch frequency. This points to an impressive 1,250% increase in revenue potential, before even considering ticket price adjustments. Early seats on these flights were under $250,000, but the latest have been hitting $450,000 or more. Running just one Delta-class plane at full tilt could earn Virgin Galactic more than $22 million a month, a drastic leap from Unity’s initial $1 million monthly revenue.
Interestingly, Virgin Galactic might have an even more lucrative option by reducing passenger numbers or possibly moving away from space tourism altogether.
### Breaking News with Redwire
How would such a transition occur? Last week offers some insights. Virgin Galactic announced a partnership with space infrastructure firm Redwire, tasking them with building “research payload lockers” for the Delta planes. These lockers are designed for microgravity research experiments, useful for prepping other companies’ missions to orbit, the moon, or even Mars.
These aren’t small containers, either. Without any passengers, each spaceship can hold up to 20 lockers across five racks. In a mixed configuration, Virgin could balance between tourists and payloads, exchanging one passenger seat for a rack accommodating four lockers.
### A Choice Between Cargo and Tourists
So, why might Virgin Galactic lean towards carrying cargo over tourists? This requires digging into potential revenue differences. Exploring the suborbital research market, a 2020 Penn State article highlights that such missions often cost less than $5 million—significantly higher than a tourist’s $250,000 to $450,000 ticket price. If Virgin Galactic can swap out a tourist seat for four research projects, the numbers are persuasive: four projects potentially net $20 million, dwarfing the revenue from one tourist seat.
Even if Virgin’s costs are higher, say $2 million per four-project package, it’s still five times more profitable than a tourist ticket. This math strongly supports the case for prioritizing cargo.
### If You Can’t Win, Change the Game
The case for Virgin Galactic to reduce or shift away from passenger flights strengthens when considering their current competitive standing. As of now, Blue Origin has been busy launching its New Shepard rockets with tourists, achieving nine flights and carrying 47 passengers, while Virgin Galactic has only managed seven flights. Furthermore, SpaceX is joining the tourism race through partnerships and developing its own Starship, with the capacity for 100 tourists per trip.
With competition ramping up, it’s perhaps time for Virgin Galactic to rethink its strategy, potentially finding more profitability in research cargo than in flying tourists.
