Space tourism company Virgin Galactic Holdings (SPCE -1.15%) was getting a lot of investor interest in July when it took a crew that included billionaire founder Sir Richard Branson to the edge of space on its Unity 22 test mission. But since that flight on July 11, Virgin Galactic stock is down almost 50%. That's partly because the Federal Aviation Administration grounded the company after that flight to look into a "mishap" that occurred during the mission. But that FAA probe is now complete, and shares of Virgin Galactic have responded with a gain of 13.5% as of 11:05 a.m. EDT today.
On the test flight in July, during the ascent, the spacecraft veered off its flight path for less than two minutes, which put it outside of air traffic control clearance for that time period. The FAA has been probing the issue since August, and Virgin Galactic today announced that the inquiry is complete and the FAA has accepted corrective actions proposed by the company.
Virgin Galactic said for future flights, it has "updated calculations to expand the protected airspace for future flights," therefore allowing a larger variety of flight trajectories. It also has included additional flight procedures to ensure notification to FAA air traffic control will occur in real time in the future.
One ramification from the FAA probe was a delay in flights until the investigation was complete. The company's next planned mission will be its first commercial flight for the Italian Air Force. That Unity 23 mission is now able to proceed.
The company itself had also previously announced a delay in that mission unrelated to the FAA inquiry due to "a potential manufacturing defect in a component of the flight control actuation system" from a third-party supplier.
In its most recent update for that flight, Virgin Galactic said it expects the earliest flight window to be in mid-October. Now that the FAA has given it the green light, investors today are getting back into the stock anticipating that first revenue-generating flight.