OneWeb to compensate Virgin Orbit for canceled contract

Recently, Virgin Orbit requested a bankruptcy court to order OneWeb pay a contract termination fee amounting to $46.3 million for 35 LauncherOne mission that OneWeb withdrew back in 2018. Roughly 15 months ago, Virgin Orbit filed a court sue order after OneWeb terminated its 2015 inauguration contract for 39 LauncherOne missions and 100 additional launches. OneWeb ended all except four launch missions that the company is yet to conduct.

Virgin Orbit announced that the contract termination triggered a $70 million cancellation fee, with a current outstanding balance of $46.3 million. In August 2019, OneWeb stated that the contract termination was without cause and that the company applied a $66 million cancellation fee. New York’s Southern District Court received Virgin Orbit filed complaint barely 14 days after OneWeb filed for bankruptcy protection. However, OneWeb’s bankruptcy documents filed in May and June never indicated that the company owed Virgin Orbit compensations.

In July, the British government and Bharti Global, India’s telecommunications giant, announced that the partners seek to buy off OneWeb. Most importantly, to enable resumption of launch schedules for OneWeb’s low-Earth-orbit broadband satellite constellation. However, Virgin Orbit’s court document filed on September 10 stated that the company never received an update about OneWeb’s launch contract.

OneWeb’s megaconstellation project plans to deploy broadband satellites to serve the planet’s fast internet access. Other projects currently underway include Elon Musk’s SpaceX Starlink program. Both programs seek to develop the globe’s internet backbone and establish a framework for ultra-high-speed web access. 

Virgin Orbit demanded that debtors and successful launch contract bidders incur all the pending competition fee payment subject to the current Virgin Notice Contracts for $46,323,851. Katie Dowd, OneWeb’s spokesperson, stated that the company does not plan to make any comment as to whether or not it owes Virgin Orbit a $46.3 million contract termination fee.

In July, Virgin Orbit launched a test flight of LauncherOne, an air-launched rocket for miniature spacecraft. The launch mission failed minutes after lift-off because of a faulty line for the liquid oxygen propellant, causing engine ignition failures. Dan Hart, director and CEO of Virgin Orbit, said that the company identified and understood the rocket modifications to enable LauncherOne’s inauguration late this year. Dan made this announcement during a SpaceNews webinar held on August 3.

To summarize, the complaints and court documents between Virgin Orbit and OneWeb continue to stagnate the progress of upcoming launches because both corporations go back-and-forth in court. Once OneWeb settles the issues with compensation, then the partnership between the British government and Bharti Global plans to resume launch activities immediately.