Virgin Galactic is ramping up its ambitions for commercial space flight. The company plans to open an Arizona factory and will partner with a Boeing subsidiary on spacecraft production. But will it be enough for the company as rivals like Blue Origin launch more flights, sooner? Al Root, Senior writer at Barron's, joins Closing Bell to discuss Virgin Galactic's plans, safety risks, the future of the company, and more. 

Closing Bell

Virgin Galactic Plans to Open AZ Factory, Launch Boeing Partnership to Ramp Up Commercial Space Flight

But commercial spaceflight companies had robust plans to build out operations over these next few years. Things haven't quite fallen into place. But that does include Virgin galactic, which previously planned to launch private flights by the end of this year. Now the company says it plans to open a new Arizona factory that will be able to produce up to six space ships a year. And joining me now is Al Root, senior writer at Baron's. Al, always good to see you. How big of a deal is this Arizona factory? And do you think it'll be a success? Um You know, it's funny you said the original start of commercial service was this year, Don't forget Back in 2019 when this was one of the first backs they wanted to start commercial service in 2020. So it's been a long series of delays. So they're now partnering with Boeing to help build the spaceships or excuse me, the planes that sort of carry the spaceship to 50,000 ft then let it go. That's probably a good thing because Boeing offers scale and manufacturing expertise and just one little point, it's a Boeing, it's a wholly owned Boeing subsidiary called Aurora Flight Sciences, but I think partnering at this point is a good thing. Okay, do we have any sense if this is safe because that was a big question. I mean, you mentioned they did back here in 2019. Richard Branson, the whole crew, I was definitely a marketing opportunity down here on the floor of the stock exchange, they joined us on chatter news. Then finally, we saw, we saw Branson actually go to the edge of space last summer just a year ago and we were expecting more flights. But those haven't even happened in the wake of that initial flight. So do we know what the hang up has been since Branson did launch himself to the edge of space a year ago? Well, I think actually the the oversight, so these fall under the F. A. A. Just kind of like Boeing planes or anybody else's commercial flights. And I think actually some of the delays should give you comfort. That sort of, you know, the process, you know, to to certify these things and let commercial service begin are safe. Virgin galactic sort of found that, you know, some of the materials weren't as strong as they wanted them to be. Obviously didn't cause any problems with that. That necessitated going back to the design board. Uh and then redoing some of the things and they're still working through that process. And it's, you know, added, you know, more than a year to start a commercial service. But this is all under the leadership and and sort of oversight of the F. A. A. So that's a good thing. Um you know, and so, you know, Blue Origins had four flights. And these guys have had one flight with Richard Branson on it. So no problems yet. But you raise a good point, right. If anything were to ever happen early in this industry, it would be a really bad thing, right? Because it's brand new and and everybody would it would be it would be such a big deal. It's like an outsized risk. There's an outside safety risk because of the nature of the industry. It was just last summer that actor and entrepreneur Ashton kutcher told me his wife Mila Koons advised him against going to the edge of space. So we actually sold back that virgin galactic ticket in the wake of Branson's own trip out. So I think people still a little bit cautious, right? Do they feel safe actually embarking on a journey like this as it is very new and mason. So with this Arizona factory, the Boeing partnership, did you want to chime in there? Something interesting point, Right? But it's funny because my wife also didn't want me to go then nobody asked I offered myself to services. But you know, these are for like the tickets are like $5-$800,000. It's a very select group of people that can afford these things. So so the culture Mila Kunis, you know, conversation is is the right one, but there's probably enough rich people, right? Like there's probably a few 100 rich people that will that will get this service off the ground. You no pun intended. Yeah, adrenaline junkies. Space nerds. I think you are right there based on guest that we've interviewed quickly before, I have to let you go, I'll do the timing. So we do know Virgin galactic and the partner with Boeing Boeing subsidiary, gonna open this factory in Arizona make these space planes that do then ultimately launch the space shift if you will to the edge of space. But any indication as to how This sets a virgin to me, I believe it's it's 2025 goal. Is that right to actually have revenue generating trips? No, there's they want to start in the first quarter of 2023. The new ships, you know, the Boeing ships are hopefully, you know, 2025 and that would be more revenue, more flights. But they have their existing setup, which I think is one or two space planes. That's a good term. And then one or two spaceships. So they're still going to try and get this off the ground in Q 1 2023. And then, you know, this is partly sort of about scale and growth, right? Like I think the street has 40 million in sales next year and growing to like 1 50 by 25. All right, we'll be keeping a close eye on this. Our senior writer Barons, thank you as always