Virgin Galactic Partners with Italy’s Ente Nazionale per l'Aviazione Civile to Conduct Spaceport Feasibility Study

Rhea-AI Summary

Virgin Galactic (NYSE: SPCE) and Italy's civil aviation authority (ENAC) have signed an Agreement of Cooperation to study the feasibility of conducting spaceflight operations from Grottaglie Spaceport in Southern Italy. The study, with phase one expected to complete in 2025, will evaluate technical requirements, airspace compatibility, and regulatory alignment for suborbital spaceflight operations.

The initiative follows the successful Italian Air Force mission aboard Virgin Galactic's 'Galactic 01' in June 2023. Grottaglie Spaceport, designated as the first horizontal spaceport in the European Union, has received €70 million in funding from the Puglia region and Italian government for infrastructure development. The project aims to establish a center of excellence for commercial suborbital transportation in the Mediterranean basin.

Positive

• Partnership with Italian aviation authority expands potential European operations
• €70 million government funding allocated for spaceport infrastructure
• First-mover advantage as the only horizontal spaceport in the European Union

Negative

• Study completion not expected until 2025
• No guaranteed operational approval after study completion
• Significant regulatory and technical requirements still need to be met

Insights

Aerospace Industry Analyst

The feasibility study with ENAC marks a strategic expansion move for Virgin Galactic, potentially establishing their first European spaceport operations. The 70 million Euro infrastructure investment from Italian authorities demonstrates serious commitment to the project. While this could create a valuable revenue stream through European operations, several critical challenges need consideration. The technical assessment, regulatory alignment and infrastructure development timeline through 2025 suggest actual operations are still years away. The company's current market cap of 181 million indicates significant financial constraints, raising questions about their ability to fund expansion while maintaining existing operations. The Grottaglie location offers strategic advantages for Mediterranean and European markets, but success depends heavily on technical compatibility and regulatory harmonization between U.S. and Italian frameworks.

Market Research Analyst

This potential European expansion represents a significant market opportunity, targeting the untapped European space tourism market. The Grottaglie Spaceport's strategic location in Southern Italy could serve as a gateway for wealthy European and Middle Eastern customers, diversifying Virgin Galactic's customer base beyond U.S. operations. However, the lengthy feasibility study timeline and multi-phase approach suggest revenue impact won't materialize until well beyond 2025. The company's small market capitalization of 181 million raises concerns about financial capacity to execute international expansion while maintaining profitability. The Italian government's 70 million Euro infrastructure commitment is promising but doesn't address Virgin Galactic's operational costs and capital requirements.

Study to Evaluate Technical and Regulatory Feasibility of Operating from Italy’s Grottaglie Spaceport

WASHINGTON--(BUSINESS WIRE)-- Virgin Galactic Holdings, Inc. (NYSE: SPCE) (the “Company” or “Virgin Galactic”) and Ente Nazionale per l'Aviazione Civile (“ENAC”), the civil aviation authority of Italy, today announced the signing of an Agreement of Cooperation to jointly study the feasibility of Virgin Galactic conducting spaceflight operations from Grottaglie Spaceport in the Puglia region of Southern Italy.

The study will evaluate the necessary technical requirements for suborbital spaceflight operations at Grottaglie Spaceport, the surrounding area’s ability to support private and research suborbital spaceflight customers, and the compatibility of Italy’s suborbital regulations with those in the United States, where Virgin Galactic is headquartered.

Phase one of the study, anticipated to be completed in 2025, will examine Grottaglie’s airspace compatibility with Virgin Galactic’s requirements and unique flight profile. This will include examining any regulatory requirements, studying the facilities infrastructure and ensuring supply chain capability to support repeated spaceflights. Presuming these criteria are satisfied, phase two of the examination would expand to consider regional workforce requirements as well as the potential economic stimulation to Italy and Puglia generated by multiple spaceflights per week.

The announcement comes 18 months after members of the Italian Air Force and the National Research Council of Italy conducted research aboard Virgin Galactic’s June 2023 ‘Galactic 01’ mission from Spaceport America in New Mexico. The flight marked the Company’s inaugural commercial spaceflight.

“Development of world-class spaceports in premier locations is essential to our goal of expanding human-first space travel around the world, and we are honored to partner with the Italian government as we look to bring Virgin Galactic’s spaceline operations to Italy and the European continent,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “This study lays the groundwork to activate the economic and community benefits of commercial space across the region, and we are thrilled at the prospect of Virgin Galactic customers looking out our spaceship windows to witness the boot of Italy from space.”

“Today, our partnership takes a significant step forward. Together, we will conduct a feasibility study to determine the conditions for suborbital operations from the Grottaglie Spaceport under ENAC’s regulations inspired by the U.S. model,” said Mr. Fabio Nicolai, Deputy Director General, ENAC. “This work will lay the foundation for safe and sustainable commercial operations in Italy.”

Grottaglie Airport is managed by Aeroporti di Puglia and was designated a commercial spaceport by the Ministry of Infrastructure and Transport in 2018, making it the first horizontal spaceport in Italy and first in the European Union. Grottaglie Spaceport is primarily intended to provide a base for suborbital spaceflights, including both private and research, acting as a center of excellence for commercial suborbital transportation and space exploration in the Mediterranean basin. The Puglia region and Italian government recently allocated funding of 70 million Euros for airport infrastructure necessary for the full operation of Grottaglie Spaceport.

“We are excited to work with Virgin Galactic and demonstrate how Grottaglie Spaceport can provide infrastructure, high level skills and specialized services necessary for suborbital flights,” said Antonio Maria Vasile, President of Aeroporti diPuglia, which manages the site. “Grottaglie Spaceport has become a European hub for the development of new aerospace technologies and a catalyst for pioneering projects in the new space economy.”

Added Mr. Vito Bavaro of the Economic Development Department of Puglia Region, “Extending commercial space travel to our region aligns closely with the investments we are already making in research and innovation, development of advanced skills, and policies to strengthen the regional aerospace ecosystem. We believe Virgin Galactic is an ideal partner in our mission to provide a regional base for suborbital flights in the Mediterranean basin.”

About Virgin Galactic Holdings

Virgin Galactic is an aerospace and space travel company, pioneering human-first spaceflight for private individuals, researchers, and governments with its advanced spaceships and high-altitude carrier aircraft. Scale and profitability are driven by next generation vehicles capable of bringing humans to space at an unprecedented frequency with an industry-leading cost structure. You can find more information at www.virgingalactic.com

About Ente Nazionale per l'Aviazione Civile

The Italian Civil Aviation Authority (ENAC) serves as the sole authority for technical regulation, certification, supervision, and control in the civil aviation sector, including airports, in Italy, operating under the powers granted by the Navigation Code. In carrying out its institutional role of regulation and oversight, ENAC promotes the development of civil aviation and airport systems by ensuring flight and operational safety, protecting passenger rights, enhancing service quality, and fostering fair competition—all while respecting environmental sustainability. ENAC is particularly attentive to innovation, with a focus on emerging fields in aviation and aerospace transportation, driving advancements that contribute to the modernization and competitiveness of Italy's aviation sector. It actively collaborates with national and international organizations to support the sustainable growth and innovation of the industry.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our partnership with ENAC, including the planned study to evaluate the technical and regulatory feasibility of operating from Italy’s Grottaglie Spaceport, the potential to conduct our spaceflight operations from Grottaglie Spaceport, and our plans to expand our commercial operations globally, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the results of the planned feasibility study with ENAC, our ability to expand our operations internationally, any delay in future commercial flights of our spaceflight fleet, our ability to successfully develop and test our next generation vehicles, and the time and costs associated with doing so, our expected capital requirements and the availability of additional financing, and the other factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as well our subsequently filed reports on Form 10-Q and 8-K, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the "SEC"), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com, which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241210572565/en/

For media inquiries:

Aleanna Crane - Vice President, Communications

Virgingalacticpress@virgingalactic.com

575.800.4422

For investor inquiries:

Eric Cerny - Vice President, Investor Relations

vg-ir@virgingalactic.com

949.774.7637

Source: Virgin Galactic Holdings, Inc.

FAQ

When will Virgin Galactic (SPCE) complete the Grottaglie Spaceport feasibility study?

Phase one of the feasibility study is expected to be completed in 2025.

How much funding has been allocated for the Grottaglie Spaceport infrastructure?

The Puglia region and Italian government have allocated 70 million Euros for the spaceport infrastructure.

What is the significance of Grottaglie Spaceport for SPCE's European expansion?

It would be Virgin Galactic's first European operations base and is the first horizontal spaceport in the European Union.

What will Phase One of SPCE's Italian spaceport study examine?

Phase one will examine airspace compatibility, regulatory requirements, facilities infrastructure, and supply chain capability for repeated spaceflights.

When did Virgin Galactic conduct its first mission with Italian personnel?

Virgin Galactic conducted its first mission with Italian Air Force and National Research Council personnel in June 2023 during the 'Galactic 01' flight.