Spaceport America leaders say Virgin Galactic layoffs, flight pause won't affect master planning

Nearly eight months after a master planning process to evaluate current conditions and study future market opportunities for New Mexico's Spaceport America kicked off, planning leaders and Spaceport officials said the process is on track to wrap up by May of this year, with recent news out of the facility's anchor tenant reportedly having little effect on planning.

The New Mexico Spaceport Authority, which oversees Spaceport America, in May 2023 selected three firms — RS&H Inc., Populous and Zia Engineering and Environmental Consultants — to lead a year-long master planning process.

As part of that process, Spaceport officials and representatives from the consultant firms hosted two public meetings — one in Las Cruces in early October, and another on Wednesday night in Albuquerque.

At Wednesday night's public meeting, Andrew Nelson, vice president of aerospace at Jacksonville, Florida-based RS&H, said a first draft of the new Spaceport America master plan is expected in late April or early May of this year, once the master planning contract concludes.

Public feedback shows need for better Spaceport America messaging

Wednesday's meeting included a 20-minute presentation on Spaceport America and its activities before opening up to public comment around four prompts. Those prompts included:

One person in attendance, in response to the first prompt, raised concerns about a lack of clear economic results from Spaceport operations, especially for communities in Sierra County — which has funded the Spaceport through gross receipts taxes — and around Truth or Consequences, the near city to the 18,000-acre site.

Nelson, who led the presentation and the public comment period, acknowledged that "tangible signs" of the Spaceport's economic impact "haven't really started to show up." He also said there are impacts of the Spaceport that aren't currently being recognized.

That's one concern he and others leading the master planning process have heard from additional Spaceport stakeholders — it's challenging to effectively share information about Spaceport activities with the public.

"It made us start to look at how people get their information," Nelson told New Mexico Inno after the event. "Because part of the function of the Spaceport is that you need that public outreach, you need to educate the public consistently and constantly."

It's a challenge that Nelson said will inform the organizational piece of the master plan, including if the Spaceport needs to hire an in-house marketing team or devote other resources to its public relations efforts.

"A traditional business shouldn't have to have a PR firm bolted to them," he said. "I don't think that's the answer, but if you really want to get the word out you have to think about it differently."

Scott McLaughlin, the Spaceport's executive director who was also in attendance Wednesday, shared a similar sentiment with New Mexico Inno.

"[People] don't really watch the nightly news anymore, they don't really read the newspapers, you don't know what social media channel they're on," McLaughlin said. "That's the hard thing, because I'm sometimes surprised by a question which I think the answer is widely known but it's not known at all."

The effect of recent Virgin Galactic news on the master planning process

A big part of the public's understanding of the Spaceport has come from the operations of its anchor tenant, Virgin Galactic (NYSE: SPCE). Founded by British entrepreneur Sir Richard Branson in 2004, the space travel company signed a 20-year lease agreement with the New Mexico Spaceport Authority in December 2008.

After over a decade-and-a-half of development and testing, Virgin Galactic kicked off its commercial service in 2023, with five commercial flights out of the New Mexico facility in the past 12 months.

But midway through the year-long master planning process, Virgin Galactic announced a realignment of resources focused on the company's next-generation of spaceships, along with nearly 75 employee layoffs in New Mexico. That realignment, the company said, will see flights out of Spaceport America pause come mid-2024.

How has that recent realignment affected the master planning process so far? "Not at all," Nelson said.

That's because, Nelson said, Virgin Galactic's business changes are "normal." Virgin's Unity-class spaceship, which the company flew throughout 2023 and plans to fly two more times in 2024, is a "prototype vehicle," he added, which Nelson said aren't designed to fly multiple times per week — which Virgin Galactic's next-generation of spaceships, called the Delta class, are being designed to do exactly that.

Virgin Galactic has previously said it expects to start test flights of its Delta-class spaceships out of Spaceport America in mid-2025.

"If this was four years ago, they could have just raised much more money and continued to fly on a semi-regular basis with the prototype probably," Nelson said. "But it's just economic reality. They want to save the company, they want to fulfill their commitments."

Nelson said Virgin Galactic's change of plans has "re-emphasized" one risk that planners and officials had already identified — having too much of the Spaceport's revenue concentrated in one customer.

"And so, one of the efforts is to go out and build on the successes already had with other customers," he said.

Virgin is still the biggest economic opportunity for the Spaceport, Nelson said. The Mojave, California-based company wants its Delta-class spaceships to fly out of Spaceport America as many as eight times per month once those ships start commercial service, which could be in 2026.

Spaceport America has the capacity to handle that increased flight frequency, its Executive Director McLaughlin told New Mexico Inno in November. But in the meantime, diversifying the Spaceport's revenue around other streams, including more lease revenue from additional tenants and tying in a nearby railroad to the 18,000-acre facility will be a focus of the master plan, McLaughlin and Nelson said.

Regional partnerships could help drive Spaceport economic development

Part of that economic diversification could come from collaboration with other economic development-focused organizations in Southern New Mexico, too. The Spaceport recently signed a memorandum of understanding with The Borderplex Alliance, a nonpartisan development organization for the Borderplex region, which includes Las Cruces, El Paso and Ciudad Juárez in Mexico.

The agreement, announced Jan. 4, will see the Spaceport and the alliance formalize an ongoing partnership and expand the two entities's work together.

"Together, we will initiate new programs that stimulate job creation and capital investment in our region," Jon Barela, CEO of The Borderplex Alliance, said in a statement. "The commercial space industry is expanding rapidly, and this alliance ensures the Borderplex will be at the forefront of this 21st-century industry."

McLaughlin, the Spaceport's executive director, said the agreement is "certainly wide open" in terms of specific programs and initiatives the two entities would work on together. The Spaceport and the Alliance, he added, will meet regularly to share collateral and leads to help attract more aerospace-related companies to the broader Southern New Mexico region.

"Really what the [memorandum of understanding] is doing is allowing us to recruit together, to recruit for the region, as opposed to just for our normal target areas," he said. "Since we don't all go to the same exhibitions and shows, it means that they'll be talking about the Spaceport and the shows they go to and we'll be talking about the Borderplex region at the shows we go to. So, we'll work to advertise that whole area."

Barela, the Alliance's CEO, told Albuqerque Business First in late November he expects the Borderplex region's recent spree of development activity to continue in 2024.