Investing in Space

Virgin Galactic is seeing strong demand for tourist flights to space, will re-open ticket sales

Key Points
  • Virgin Galactic CEO George Whitesides on Thursday revealed the company has seen steadily increasing demand from prospective space tourists.
  • "Later on in the year we'll re-open those sales," to fly to space, Whitesides told CNBC.
  • In the past tickets have gone for $250,000 per person but the company may increase its prices substantially for the first commercial flights.
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Virgin Galactic CEO George Whitesides on future of space tourism

Virgin Galactic CEO George Whitesides on Thursday revealed the company has seen steadily increasing demand from prospective space tourists, as the company edges closer to its goal of beginning commercial flights this year.

The number of people telling the company they want to fly to the edge of space "keeps ticking up by a good chunk every month," Whitesides told CNBC's Morgan Brennan on "Squawk on the Street."

"Later on in the year we'll re-open those sales," Whitesides said.

Shares of Virgin Galactic rose 5.4% in trading to close at $12.04.

The company has 603 reservations on its books, with tickets going for $250,000 per person. But Virgin Galactic froze ticket sales after a crash in 2014 killed a pilot during a test flight. After updating its spacecraft, and spending the last few years verifying its safety, Virgin Galactic has flown five people to space on two successful test flights.

Virgin Galactic said in its third-quarter results that – following those test flights – the company received 3,557 expressions of interest in flight reservations. The company reported those quarterly results in November, shortly following its public debut on the New York Stock Exchange.

Whitesides told investors at Morgan Stanley's recent space summit that the high demand for tickets means his company could increase its prices substantially for first commercial flights.

The CEO on Thursday outlined the company's goals for the year ahead, with Virgin Galactic's number one priority to fly Branson to space. Before that happens Virgin Galactic will move its spacecraft Unity to the company's spaceport in New Mexico from its testing facility in Mojave, California. Then the company will complete a series of test flights at the new location, while also finishing the design of the spacecraft's cabin for customers.

Virgin Galactic Chairman Chamath Palihapitiya told CNBC in November that he expects Virgin Galactic to begin commercial operations in the middle of this year. The company aims to be profitable by 2021.

There are three Wall Street firms covering Virgin Galactic's stock – Morgan Stanley, Credit Suisse and Vertical Research Partners – and all three have buy ratings.