Submitted by cnbc_official t3_127wbku in space
Comments
thesheetztweetz t1_jegc1qn wrote
Hi all, Michael Sheetz here. Hope you all enjoy this deep dive into the Virgin Orbit saga, as I pulled from across all my reporting these past few years (and especially weeks) to explain what happened.
TuckerCarlsonsOhface t1_jeg72wr wrote
> While Virgin Orbit touted a flexible and alternative approach to launch small satellites, the company was unable to reach the rate of launches necessary to generate the revenue it sorely needed.
I mean, even if there were tons of companies clamoring to shoot a satellites into space, how much repeat business would there be? It doesn’t seem like a sustainable income source no matter what. It’s not like the average person on the street is like “I should get one of my own satellites up there.”
Bewaretheicespiders t1_jeg7daw wrote
Oh there is demand. Demand for launch services still outpaces supply. Its exploding.
https://spacenews.com/launch-demand-remains-high-despite-industry-struggles/
Virgin Orbit was just bad.
TuckerCarlsonsOhface t1_jeg8qf3 wrote
But if the demand is so great wouldn’t it have been easier for them to generate enough launches regardless? The article says the problem was they didn’t have enough to create revenue. If demand is so great they wouldn’t be turning down launches.
Bewaretheicespiders t1_jegad3u wrote
LauncherOne was 500 kg per launch to LEO, for 12 million, with a 2/3 success rate. Just because there is strong demand doesnt mean you dont have to be competitive.
stewake t1_jegashf wrote
I believe the value of Virgin Orbit being a selection for launch services plummeted with repeat failures, and loss of client assets through catastrophic failures. Hard to bring in launch revenue when no one trusts your rocket reliability.
TuckerCarlsonsOhface t1_jegcpi5 wrote
I thought the article said there were only two failures, but I can see how that would still be a deterrent. Though, if the damned is so high I would assume some would be willing to make the gamble if the supply simply isn’t there.
stewake t1_jegdndh wrote
Correct, but I believe those failures were during their first “Commercial” satellite contracts, which ended in failed orbit and destruction of client property (the satellite).
As someone in product development, this sort of failure at the start of your product launch (no pun intended) can make/break your reputation as a trusted source for that market. People will take their business to the product that is proven, rather than taking a high gamble on something that has a higher probability to fail and destroy your goods.
SpaceX has been through many failures themselves, but they broke through and created a reliable & reusable launch system at a lower cost offering. Other companies, though more expensive, have at least proven reliability and minimized failed contracts.
lezboyd t1_jegdly4 wrote
Two factors, reputation and price.
For example, Indian Space agency, ISRO, has a much better track record at launching satellites, and has developed means to send multiple ones in the same payload. Recently, it launched 36 (or 32?) satellites for a UK based StarLink competitor as part of the same payload. It also holds record for launching 102 satellites at the same time. It has launched satellites for countries around the world, including the USA and Israel. And it's costs are competitive.
H-K_47 t1_jegx18o wrote
> It also holds record for launching 102 satellites at the same time.
Small correction, that record was actually broken by SpaceX launching 143 at once during a Transporter mission. But overall yes you are right, India has a distinguished history as a reliable and cheap launcher, earning them a tidy sum over the years.
TuckerCarlsonsOhface t1_jegdv1g wrote
That makes sense, but damn, Virgin must be terrible at this.
joepublicschmoe t1_jegiu2d wrote
There are lots of companies and institutions with smallsats/cubesats looking to put them into orbit, but SpaceX came into the smallsat launch market as the 800-pound gorilla, offering Falcon 9 rideshares with prices as low as just $250,000 for a 50kg cubesat to sun-synchronous orbit. That disrupted the small launch market and altered the market dynamics so that small-launch rockets are no longer profitable.
Virgin Orbit couldn't hope to compete with that, at $12 million for 450kg to SSO. ($1.33 million for a 50kg cubesat, if 9 customers would sign up for a Launcherone launch to split the $12 million cost).
Other smallsat launch companies are in similar dire straits, such as Astra, which now doesn't even have a working launch vehicle after they abandoned their Rocket 3.
Relativity doesn't even look like it will be selling Terran 1 small-launch missions but going all in with their development of the bigger Terran R.
Rocket Lab saw the Space Falcon 9 rideshare threat coming at its core business (smallsat launches on Electron). Peter Beck was able to adjust Rocket Lab's business to adapt to the threat, by diversifying Rocket Lab's business into building satellite buses and other satellite components. Beck also took a huge gamble to try to remain relevant in the launch business by developing the medium-lift Neutron to stay competitive against Falcon 9, and it remains to be seen if this high-risk gamble will pay off.
Virgin Orbit is in a particularly tough spot. They have no viable path to a more versatile medium-lift launch vehicle-- Launcherone is the biggest rocket they can hang off a 747's inboard pylon. And they couldn't diversify their business away from small launch like Rocket Lab with its satellite bus and components business.
cnbc_official OP t1_jeg3hh1 wrote
Not too long ago, Virgin Orbit was in rarified air among U.S. rocket builders, and executives were in New York celebrating its public stock debut.
The scene was true to the marketing pizazz that has helped Sir Richard Branson build his Virgin empire of companies, showcasing with a rocket model in the middle of Times Square.
The deal, facilitated by a so-called blank check company, gave Virgin Orbit a valuation of nearly $4 billion. But that moment in December 2021 – when the craze surrounding public offerings centered on special purpose acquisition companies, or SPACs, was dying out – previewed the pain to come.
Now, Virgin Orbit is on the brink of bankruptcy. The company on Thursday halted operations and laid off nearly all of its staff. Its stock was trading around 20 cents Friday, leaving it with a market value of about $74 million.
Read more: https://www.cnbc.com/2023/03/31/virgin-orbit-what-went-wrong.html