Virgin Orbit expects $43 million from bankrupt OneWeb for cancelled launches

26th Sep 2020
Virgin Orbit expects $43 million from bankrupt OneWeb for cancelled launches

Virgin Orbit, a launch provider founded by Richard Branson, asks OneWeb bankruptcy court to mandate payment for cancelled launches. According to Virgin,the bankrupt telecommunication company owes them $46.3 million for a contract termination fee. Oneweb, in turn, believes prior payments cover any inconveniences they might have caused.

Virgin Orbit Vs. OneWeb Court 

British telecommunications provider signed a contract with Virgin Orbit, employing their LauncherOne carrier for 39 missions in 2015. These missions had to deliver small satellites into low earth orbit, in an attempt to form a large satellite constellation that would provide a broadband Internet connection. However, 35 out of those 39 missions were cancelled by the telecommunications provider in 2018. 

Virgin Orbit representatives claim that OneWeb has to pay a contract termination fee since cancelled launches resulted in a loss of $70 million for their company. Oneweb, on the other hand, states that their contract allowed for launch cancellation without cause. They also claim that $66 million has already been paid to the launch provider in advance, which should cover their contract termination fee. 

The case is prosecuted by the District Court of the Southern District of New York. OneWeb filed for Chapter 11 bankruptcy at the peak of the COVID-19 pandemic, in April this year. It took Virgin two weeks to file a termination fee complaint to the same court.

During subsequent hearings in May and June 2020, Oneweb once again claimed that they owe Virgin no cancellation fee. They submitted all necessary documents to prove their bankruptcy and stated that any further payments should be handled by a new company owner, who may soon appear, as both Indian telecom giant Bharti Global and the UK government announced their interest in buying the bankrupt business. Both parties are interested in continuing to deploy satellite constellations which will be used to provide broadband Internet.

On September 10, Virgin Orbit once again stated that the telecommunications provider never notified them about contract cancellation and so they are entitled to pay the remaining $46,323,851. In turn, OneWeb spokesman Katie Dowd replied that they don’t owe any payments to their launch operator. 

While it is not yet clear which of the parties concerned will have their way in court, we can assume that the work on the global satellite network will go on. Besides, Virgin is experiencing setbacks of its own. This July, one of their LauncherOne missions failed and in August, Dan Hart, company CEO, announced that they are working on further modifications. Hopefully, those should be ready by the time the Virgin Orbit and OneWeb court suit is settled.

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