View from Washington: Virgin Orbit crowded out of space

The fate befalling Sir Richard Branson’s Virgin Orbit was abrupt and has since become messy. But did the company also just run out of luck?

Virgin Orbit “paused” operations during one of the space sector’s biggest annual shows, Satellite 2023 in Washington DC last month. Overnight, the company’s sales suite was closed and mothballed, leaving only a sad crate and one last employee’s coat.

Since then, the venture seemingly came close but ultimately failed to secure ongoing funding. It has this week declared bankruptcy, laid off almost 700 staff and shareholders now hope its physical and intellectual assets can be sold.

All this followed January’s failed launch from Spaceport Cornwall that would have been the company’s fifth successful mission and meant that the UK was the first European country to have an active launch site on its native turf. Spaceport, a separate company, is now seeking other partners.

Within Virgin Orbit, there were already rumours of concern about its burn-rate – estimated by some experts to have been around $20m (£16m) a month against revenues of $12m per launch, with the numbers accelerating in the run-up to the Cornwall launch. These have now effectively been made public via a leaked email by former chief operating officer Tony Gingiss to sacked employees.

“I’m sorry that we didn’t prioritize our people and financial resources better,” he wrote in an apology that – without naming names – cast a great deal of shade over much of the rest of the management.

“You simply did not have the leadership or opportunity to demonstrate to the world what you can fully do and how this product could be an enduring force in the market,” Gingiss also claimed.

But while he voiced frustration that he had not been given “more time to figure things out”, elsewhere in the sector there was a strong feeling before the axe fell that not just the company’s spending but also the wider operating environment made for the toughest of cases.

There is a brisk optimism to the space industry right now. There are several upward trends, though to consider in more depth later, but here are three of the most significant.

There is increasing interest in low-Earth-orbit capacity for satellite internet and emergency services based on the constellations being deployed by operators such as Starlink, Globalstar, Iridium and UK-based (and part UK-government owned) OneWeb.

Second, Starlink’s specific use during the conflict in Ukraine has energised wider government interest in securing sovereign capacity, sometimes through dedicated launches but also by subleasing it.

Then, mobile and satellite communications are beginning to overlap. This is right now evident from Apple’s partnership with Globalstar to offer emergency alerts on the latest iPhones and the recent deal between Qualcomm and Iridium that will see the operator’s services integrated on new Snapdragon applications processors. But beyond that, satcomms are already being integrated within the 5G standard, and look likely to play an even greater role as 6G evolves.

There is a great deal to play for in launch, and given these and other satellite opportunities, it is not surprising that new space junk guidelines have just been published.

But the ramp-up of already available capacity is accelerating. During Satellite 2023, Blue Origin, Arianespace, Rocket Lab and the United Launch Alliance provided updates on new vehicles – respectively New Glenn, Ariane 6, Neutron and Vulcan – that are expected to be in or close to service by the end of this year or next.

SpaceX, meanwhile, said it hopes to complete 100 launches this year, up from 61 in 2022, and has increased stage reuse from 10 to 15. On that last measure, according to Tom Ochinero, VP of commercial sales: “We can go to 20.”

All this is for more proven vertical launches with greater payload capacities, as opposed to the complex technology Virgin developed for horizontal launches from the wing of an expensively repurposed 747 (although Blue Origin and Arianespace have had their own recent failures).

Meanwhile, in terms of on-board hardware, work is well under way towards making it ever easier to repurpose satellites already in orbit.

One Satellite 2023 exhibitor, Coherent Logix, used the show to launch its high-performance HyperX Midnight processor that will compete with programmable logic. It has its own C-programmable resource, and chips like these are gradually displacing the lagging-generation rad-hardened parts preferred historically.

Now add the reality that Virgin Orbit was seeking new capital at a time when venture capital funding was already falling and challenges in securing backing for riskier technology projects had just been further highlighted by the collapse of Silicon Valley Bank (even if that was more down to how it managed its own risk than the risk inherent in its clients).

The dream of horizontal launch is not over. The new urgency around sovereign capacity may help other projects targeting that. Vertical launch capacity is hard to secure at short notice both in terms of the vehicles themselves and the 35 available sites, but that is what governments often need; horizontal launches are far more flexible. If a buyer does emerge for Virgin Orbit’s IP, it will be interesting to see whether this plays a role in the decision.

But with talk also growing of potential consolidation in the vertical launch market, it seems that this was largely a case where for Virgin Orbit the stars simply refused to align.