It looks as though things may have gone from bad to worse at Virgin Orbit, the satellite carrying spin-off of Richard Branson’s space tourism company Virgin Galactic. After a disappointing launch failure earlier in the year, CNBC is now reporting the company will halt operations and furlough most employees for at least a week as it seeks new funding.

It’s no secret that company has struggled to find its footing since it was formed in 2017. On paper, it was an obvious venture — Virgin Galactic already had the White Knight Two carrier aircraft and put plenty of R&D into air-launched rockets, it would simply be a matter of swapping the crewed SpaceShipTwo vehicle for the LauncherOne orbital booster. But upgrades to the rocket eventually made it too large for the existing carrier aircraft, so the company instead purchased a Boeing 747 and modified it to lift their two-stage rocket out of the thick lower atmosphere.

virgin launcheroneDespite reshuffling plans and other setbacks, Virgin Orbit managed to put four payloads into low-Earth orbit since their first successful launch in 2021. Unfortunately, they’ve been unable to achieve the sort of launch cadence necessary to remain competitive in the market. For comparison Rocket Lab’s Electron rocket, arguably LauncherOne’s closest peer in terms of price and capability, performed 16 successful launches in the same time period.

Still, Virgin Orbit hoped to carve out a niche for themselves by being able to launch payloads from the United Kingdom, specifically from the newly-christened Spaceport Cornwall. The UK Space Agency, eager to establish a domestic launch capability, even picked up the bill for improvements to the Spaceport in anticipation of Virgin Orbit using it as a base of operations. The January 9th launch marked the first orbital flight ever attempted from British soil, making its failure all the more stinging.

Even in the increasingly competitive “smallsat” market, there’s demand for the unique capabilities offered by of Virgin Orbit’s air-launch approach. If they can steer their way through this crisis and increase their launch rate, there’s undoubtedly a steady revenue stream ahead of them. But given the operational struggles that have plagued all of Virgin’s space aspirations, we’d say there’s good reason to be concerned about the future of the fledgling company.