Trouble could be brewing for Sir Richard Branson's Space-focused subsidiary. According to reports by Reuters, Virgin Orbit has paused operations until March 21 as funds run low.

One week suspension

Nearly all Virgin Orbit's employees are set to be furloughed for an undisclosed period while the spaceflight company seeks additional funding to support its operations. As reported by Reuters, Branson has begun examining further "strategic options" and has already started talks to strengthen funding for the Long Beach-based launch service.

The decision was noted on Wednesday, with management reportedly telling employees that an update would not be provided until next week, allowing Virgin Orbit time to develop a new investment plan.

Virgin Orbit taking off from spaceport cornwall
Photo: Virgin Orbit

In a statement shared with BBC News on Thursday, Virgin Orbit confirmed the decision, though it did not provide details of the staff furlough.

"Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks."

Operational setbacks

The company faced a significant setback in January following the failed attempt of its first orbital launch from Newquay Airport's (NQY) Spaceport Cornwall. Virgin Orbit launched an investigation alongside the Federal Aviation Administration (FAA), the Civil Aviation Authority (CAA), and UK's Space Accident Investigation Authority (SAIA). Preliminary findings posted in February noted that the LauncherOne vehicle had experienced an "anomaly" caused by a dislodged fuel filter, leading to the shutdown of the rocket before it could reach orbit.

Virgin Orbit Boeing 747-400 flight testing
Photo: Virgin Orbit

Virgin Orbit's shares dropped by over 20% in pre-market trading following January's failure, though the company has seen an overall downward decline in stock market interest since late 2022. Shares in the company plummeted by up to 35% on Thursday morning on NASDAQ, hitting its lowest price of $0.64 per share at 10:40 EST.

Financial woes

During its public trading debut in August 2021, Virgin Orbit was valued at $3.7 billion in equity; however, share prices have pulled the company's current market valuation down to just $230 million for March 2023. For Q3 2022, the company reported a net loss of $43.6 million, with cash reserves dipping to $71.2 million as of September 30, 2022. Q4's financials have yet to be published.

Virgin Orbit's Cosmic Girl Boeing 747-400 at Spaceport Cornwall
Photo: Virgin Orbit

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In the statement, published in November, the carrier outlined plans to double its 2022 launch rate, bolster its revenue, and expand its backlog for launches, international bases, and work with defense companies.

The next launch is set to take off from Mojave Air and Space Port (MHV) in California for a commercial customer, though a date has yet to be revealed. Virgin Orbit previously pledged to make a second satellite launch attempt in the United Kingdom later this year. The company later confirmed it had made the required updates to LauncherOne in March.

"On the ops side, our investigation is nearly complete and our next production rocket with the needed modification incorporated is in final stages of integration and test," Virgin Orbit added.

What are your thoughts on Virgin Orbit's brief pause of operations? Let us know in the comments.

Sources: Reuters (1) (2), BBC News, Financial Times