Virgin Galactic stock up 12% after receiving approval from FAA

Virgin Galactic’s shares were trading up 12% in premarket trading on Friday after it announced that the US Federal Aviation Administration had granted the license it needs to fly passengers into space.

"The commercial license that we have had in place since 2016 remains in place, but is now cleared to allow us to carry commercial passengers when we’re ready to do so," Virgin Galactic CEO Michael Colglazier told CNBC.

"This is obviously an exciting milestone and a huge compliment to the team."

The company completed a 29 element verification and validation program for the FAA in May.

Currently, the company has five pilots that have been certified as astronauts by the FAA.

Virgin Galactic’s spacecraft, Unity, which is the one intended to fly passengers into space, is designed to carry up to six travelers along with the two pilots.

The company has about 600 reservations for tickets on future flights, sold at prices between $200,000 and $250,000 each.

“I know there’s a lot of interest and speculation out there but we have not announced either the date nor the people that would be on those,” Colglazier said. “We approach this very methodically, with safety as the first consideration, and when we have all those boxes checked and all the steps in place – that’s when we can move forward and announce.”

Virgin Galactic has three more spaceflight tests planned before it completes development.

Colglazier said the FAA approval means “the flight test program shifts now” to demonstrating “the cabin experience” of the spacecraft.

A report from earlier this month claims that Virgin Galactic backer Richard Branson could fly on the next test flight, and that it might occur as early as the coming 4 July weekend.