ECONOMY
Spaceport America says Virgin Galactic has slashed payments for services, hurting budget
Company invoked a 2018 clause to cut the fees it pays to the spaceport following a flight pause two years ago
More than two years have passed since Virgin Galactic last flew to the edge of space from New Mexico’s commercial spaceport in Sierra County.
As the private space travel company has focused on building and testing a new generation of its horizontal-launch space planes, Spaceport America has seen its revenue from other customers and tenants climb steadily. According to data presented by Spaceport America Executive Director Scott McLaughlin to a legislative committee Monday, that revenue came close to $2.1 million in the 2026 fiscal year.
On the other hand, revenue from Virgin Galactic has dropped since the latest extended delay to commercial service. The spaceport reported that since 2024, Virgin Galactic has invoked a clause in a 2018 letter of agreement with the spaceport allowing it to reduce fees it pays for the public agency’s services, to the tune of $1.66 million a year.
McLaughlin appeared before a meeting of the legislative Science, Technology and Telecommunications Committee, which convened at New Mexico Tech in Socorro.
The dispute with Virgin Galactic arises from terms negotiated before McLaughlin was named the spaceport’s executive director. The company founded by Richard Branson has reduced the monthly user fees it pays to the spaceport by 73.5%, from $188,888 to $50,000, McLaughlin told lawmakers.
Despite that reduction, he said the spaceport continues to provide services and facilities for Virgin Galactic activities — including support for test flights of the plane that carries Virgin Galactic’s spacecraft into the air.
McLaughlin said Virgin Galactic is reserving the option to withhold the full user fee until 30 days before a revenue-producing flight. McLaughlin said the spaceport’s position is that the letter of agreement was finalized when Virgin Galactic was predicting regular commercial service to begin during 2019.
“We still are required to provide services no longer being paid for,” McLaughlin said. When the company first announced reduced fees in 2024, McLaughlin said officials projected a return to full payments late in 2025. But the reduced fees have continued for another year with no indication from Virgin Galactic of when it intended to resume payments.
Virgin Galactic also contributes lease payments amounting to $3 million annually, McLaughlin reported, while revenue from the company sank to $3.75 million during the 2026 fiscal year, the lowest figure since at least 2019.
A spokesperson for Virgin Galactic declined to comment on Monday night. The company is set to report its earnings for the second quarter of 2026 on Wednesday. Previously, Virgin Galactic said it was on track to resume suborbital flights by the end of the year and ramp up commercial service in 2027.
McLaughlin said the Virgin Galactic payments have hit the spaceport’s budget amid a dramatic increase in other customers, including a boost in military-related projects.
The spaceport’s revenue for the year as of Monday was reported at nearly $6.9 million, and projected to jump in fiscal year 2027 to a range of $8.1 million to $11 million. To sustain the growth, McLaughlin said the spaceport needed additional staff and would likely request a supplemental appropriation from lawmakers.
The dispute did not sit well with the committee’s vice chair, state Rep. Debra Sariñana, D-Albuquerque, who remarked, “It just seems like it’s not OK for the state to pay for operational expenses for Virgin Galactic that are not being paid by them.”
Algernon ’A is the Journal’s southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.