FAA grounds Virgin Galactic’s spacecraft during investigation of Branson flight issues

The Federal Aviation Administration grounded Virgin Galactic on Thursday, as the federal regulator investigates the company’s previous spaceflight that carried founder Sir Richard Branson.

“Virgin Galactic may not return the SpaceShipTwo vehicle to flight until the FAA approves the final mishap investigation report or determines the issues related to the mishap do not affect public safety,” the FAA said in a statement to CNBC.

“The FAA is responsible for protecting the public during commercial space transportation launch and reentry operations. The FAA is overseeing the Virgin Galactic investigation of its July 11 SpaceShipTwo mishap that occurred over Spaceport America, New Mexico. SpaceShipTwo deviated from its Air Traffic Control clearance as it returned to Spaceport America,” the regulator added.

Shares of Virgin Galactic, which rose as much as 5% earlier in trading, turned negative and fell more than 4% after the FAA’s announcement.

Branson’s spaceflight was not as flawless as it seemed to viewers of Virgin Galactic’s live broadcaster. During the ascent, while spacecraft VSS Unity’s rocket engine was firing, a warning light came on due to the vehicle going off trajectory. The FAA confirmed in a statement to CNBC on Wednesday that the spacecraft “deviated from its Air Traffic Control clearance” and flew outside its designated airspace for 1 minute and 41 seconds.

The New Yorker first reported the issue that arose during Branson’s trip to space.

Virgin Galactic was targeting late September to early October for its next spaceflight test, as recently as Thursday morning when it announced the crew of six – two pilots and four passengers – that would be onboard.