At least two pilots were aboard the spacecraft, which was undergoing its first powered test flight since January, according to the Mojave Air and Space Port.
CAPE CANAVERAL, Fla., Oct 31 (Reuters) - A suborbital passenger spaceship being developed by Richard Branson's Virgin Galactic crashed during a test flight on Friday at the Mojave Air and Space Port in California, the company said.
"During the test, the vehicle suffered a serious anomaly resulting in the loss of SpaceShipTwo," the company said in a tweet, adding: "We will work closely with relevant authorities to determine the cause of this accident and provide updates ASAP."
Two pilots were aboard the spaceship, which was undergoing its first powered test flight since January, but it was not immediately known if they were able to parachute to safety.
More than 800 people have paid or put down deposits to fly aboard the spaceship, which is carried to an altitude of about 45,000 feet and released. The spaceship then fires its rocket motor to catapult it to about 62 miles (100 km) above Earth, giving passengers a view of the planet set against the blackness of space and a few minutes of weightlessness.
The spaceship is based on a prototype, called SpaceShipOne, which 10 years ago won the $10 million Ansari X Prize for the first privately developed manned spacecraft to fly in space.
Friday's test was to be the spaceship's first powered test flight since January. In May, Virgin Galactic and spaceship developer Scaled Composites, a subsidiary of Northrop Grumman Corp, switched to an alternative plastic-type of fuel grain for the hybrid rocket motor.
The accident is the second this week for a U.S. space company. On Tuesday, an Orbital Sciences Antares rocket exploded 15 seconds after liftoff from Wallops Island, Virginia, destroying a cargo ship bound for the International Space Station.
The crash is a major setback for Virgin Galactic, a U.S. offshoot of billionaire Branson's London-based Virgin Group. SpaceShipTwo, a six-passenger, two-pilot spacecraft is aiming to make the world's first commercial suborbital space flights.
Other companies developing passenger suborbital spacecraft include privately owned XCOR Aerospace, which is building a two-person spaceplane called Lynx, and Blue Origin, a startup space company owned by Amazon founder Jeff Bezos.
Virgin Galactic also plans to use its White Knight Two carrier jets to launch small satellites and payloads into orbit.