Virgin Galactic’s (NYSE:SPCE) stock is up 12% today after the company announced a deal with Boeing (NYSE:BA) subsidiary Aurora Flight Sciences to build two additional aircraft to support its fleet of spacecraft.
Virgin Galactic said it will work with Aurora Flight Sciences to build two new “mothership” aircraft that are used to tow its spacecraft up to 50,000 feet and into a low orbit above the Earth. Currently, Virgin Galactic has one such mothership called VMS Eve, which is about 14 years old and in need of repairs.
News of the new motherships has SPCE stock trending sharply higher today. However, year-to-date, Virgin Galactic’s stock is down nearly 50% at just more than $7 per share.
What Happened to SPCE Stock
Tustin, California-based Virgin Galactic said the new motherships will be based on the VMS Eve design and will each support up to 200 launches of its low Earth orbit spacecraft per year. Virgin Galactic currently has two spacecraft in its fleet, the VSS Unity and the VSS Imagine.
The company, which is led by entrepreneur Sir Richard Branson, is in the process of developing a new fleet of spacecraft called Delta Class that will be capable of flying as often as once a week, requiring multiple motherships for support.
Terms of the financial deal between Virgin Galactic and Aurora Flight Sciences were not disclosed. However, Virgin Galactic did say that Aurora Flight Sciences did start designing the motherships for it earlier this year and that production is slated to begin immediately. The first new mothership is expected to enter service for Virgin Galactic in 2025.
Why It Matters
The news about the motherships is positive for the company, whose stock has been hard hit this year. While much of the decline in SPCE stock can be attributed to the broad market downturn, Virgin Galactic’s share price has also been pushed lower by repeated delays and setbacks at the company.
Earlier this year, Virgin Galactic delayed the start of its commercial space tourism business to the first quarter of 2023. It was one of many hurdles that have continually pushed back the start of commercial space flights by the company. While Virgin Galactic has successfully completed several test flights into Earth’s orbit, it has yet to start flying tourists into space at a cost of $450,000 per person, per flight.
What’s Next for SPCE Stock
Investors see the news as a positive sign that the company is continuing to push forward with its plans to bring tourists into space. However, while this latest development is encouraging, the new motherships will not be available for another three years and a lot can happen in that time. Virgin Galactic continues to face many hurdles, including regulatory ones, to getting its commercial space flights off the ground.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.