Virgin Orbit bankruptcy. Is it on the horizon?17th Mar 2023
Following on from their unsuccessful launch from Newquay Airport in Cornwall, California-based Virgin Orbit have since revealed details of what happened to the rocket that failed to reach its intended rocket. A technical failure led to the vehicle burning through its fuel quicker than it was supposed to, leaving insufficient quantity of fuel for it to complete its journey. But is a Virgin Orbit bankruptcy about to occur?
However, since then, the company have now announced that they are pausing operations in the UK, and it is understood that they have sent all staff home on furlough. They’re buying themselves time to seek out a funding lifeline.
Where would a Virgin Orbit bankruptcy safety net come from?
It is not known yet whether that potential funding lifeline would include a government bail out, but we would expect that to be met with public outrage at a time when the UK is going through a cost of living crisis and is seeing cuts to public services.
It is understood that Richard Branson has had to inject a significant amount of money into the venture to plug the huge financial gap left by the rocket failure, which resulted in the destruction of clients satellites.
The company have claimed that they will return to Cornwall for another launch in future but that their next launch will be from the Mojave Desert in the USA.
Virgin Orbit’s sister company, Virgin Galactic, posted losses of $139 million in the fourth quarter of 2022 with annual revenue of only $869,000. The same period of the previous year seen a loss of $81 million.
This all leaves a lot of unanswered questions. Firstly, around why the UK government and its space agency put so much backing behind Virgin Orbit, given their lack of progress and their frequent failures at their US operations. Secondly, there is the question of the Civil Aviation Authority who issued a launch licence at the last minute prior to their failed launch – with many suggesting government intervention pushed the CAA to issue the licence. Which now brings about the question of whether the CAA is fit for purpose.
Whatever happens next will not take away from the fact this whole episode has been an embarrassment for Virgin Orbit, Cornwall Council, UK Government, UK Space Agency and the CAA. With the British government is likely to be putting their space efforts into crisis mode to redress the balance of public perception and that of the industry as a whole.