Shares of space-tourism pioneer Virgin Galactic (SPCE -1.94%) took off like a rocket this morning after the company announced it has opened a "systems integration facility" to begin testing its new Delta-class spaceplane -- and that testing of "initial subsystems" has already begun. Even better, Virgin Galactic confirmed that it remains on track to begin flying Delta commercially in 2026.
As of 10:25 a.m. ET, Virgin Galactic stock is up 9.7%.
Why this Virgin Galactic news is important
Virgin Galactic plans to fly its current spaceplane, VSS Unity, just one more time before retiring the model in June. Then it will begin a long, revenue-free financial winter when the company will have no spaceplanes to fly and, therefore, no flights from which to generate revenue until Delta arrives. So a lot is hinging on Delta.
If development remains on track and Delta begins flying commercial flights on time in 2026, the company might have enough cash to last until then and might survive. If Delta is late, though, Virgin Galactic's financial future will start to look increasingly iffy.
Why this news is more than just important -- it's crucial
Recognizing this, Virgin Galactic took great pains to reassure investors that all is well with Delta. Not only is the development of the spaceplane on track, but Delta's development heralds a new "production model of developing spaceships" that will "shav[e] years off the development timeline we saw with VSS Unity." Virgin Galactic will build Delta faster, build additional models of Delta more quickly, and therefore reach its ultimate goal of having enough spaceplanes flying to reach $1 billion a year in revenue faster.
All of this is assuming, of course, that the very first Delta arrives on time. For Virgin Galactic shareholders, everything hinges on this.
