The Strategist

Virgin Galactic shares plunge nearly 20% after commercial flights are postponed

10/18/2021 - 06:32

Shares of Virgin Galactic sank 18.1 per cent after the firm said that the first suborbital commercial flight would not take place for another year.

Virgin launched the first flight in test mode on 11 July with founder of the company Richard Branson and 5 other people aboard the spacecraft called Unity 22. The flight had an accident: on the second minute, the vehicle flew off its trajectory, due to which the FAA suspended further Virgin Galactic flights. 

In several months, the watchdog, after investigating, permitted the company to continue flights. A new flight in the test mode was expected for early October.

However, as Virgin said, routine tests have shown that the margin of safety for some of the materials applied "to change certain joints" can be reduced under certain loads. 

"While these new laboratory test data have had no impact on the vehicles, our test flight records clearly identify the required safety margin, and further analysis will assess whether any additional work is required to maintain it at the same level or to increase it," the company said in a statement.

Only after the new series of laboratory tests are completed will the company implement the new test flight, and the launch of commercial flights will now not take place until the fourth quarter of 2022, according to Virgin Galactic estimates.