Abu Dhabi Fund Holding Off On Virgin Galactic Decision -Source

The Abu Dhabi fund which owns a major stake in Virgin Galactic will wait for results of the probe into last week’s fatal crash before deciding on its commitment to the project, a source with knowledge of the matter told Reuters on Thursday.

The backing of deep-pocketed Aabar Investments, run by the Abu Dhabi government, may be crucial to Virgin Galactic as it struggles to recover from the accident, which killed one test pilot and left another seriously injured.

“As an investor, Aabar is concerned of course. It is a challenge – nothing can be decided until investigations are over,” the source said, declining to be named because of the sensitivity of the subject.

“For now, it is a wait-and-watch situation.”

Asked if Aabar was still committed to Virgin Galactic, the source said only: “There is time to make an assessment of the future strategy.”

An Aabar spokesman contacted by Reuters declined to comment, saying all queries should be directed to Virgin Galactic, part of Sir Richard Branson’s Virgin Group. By email, Virgin Galactic said questions about Aabar’s intentions should be addressed to the Abu Dhabi fund.

Aabar bought a 31.8 per cent stake in Virgin Galactic in 2010 and raised that to 37.8 per cent in 2011, according to Aabar’s website. United Arab Emirates media have reported the investment totalled nearly $400 million, and have quoted Branson as saying he aimed eventually to open a spaceport in Abu Dhabi.

So far, Virgin Galactic has spent about $500 million developing its spaceship. Before the crash it had expected to start commercial space tourism services next year, but that now looks very unlikely.

The U.S. National Transportation Safety Board expects it will take up to a year to piece together exactly what triggered the accident and recommend changes to equipment, procedures, operations and other factors that may have caused or contributed to the crash, according to board chairman Christopher Hart.

Virgin Galactic’s chief executive George Whitesides said his company hoped to complete construction of a second SpaceShipTwo in mid-2015 and begin test flights before the end of the year.

Abu Dhabi, capital of the UAE, is keen to spend some of its oil wealth on space exploration; in July, the UAE said it planned to send an unmanned probe to Mars by 2021, the Arab world’s first mission to another planet.

The UAE has invested over $5.4 billion in satellite ventures such as data and television broadcast company Al Yah Satellite Communications, mobile communications firm Thuraya and earth mapping and observation firm Dubai Sat.

It is less clear, however, whether manned spaceflight will remain a priority investment for Abu Dhabi in a region where prominent officials and businessmen go to great lengths to avoid any negative publicity or perception of failure.

After spending heavily to protect its economy during the global financial crisis, Abu Dhabi’s government has begun cutting back the growth of state spending to reduce waste, while the plunge of global oil prices over the past several months has encouraged it to review its spending on energy subsidies.