But Virgin chief Richard Branson, while voicing shock at Friday's accident involving Virgin Galactic's SpaceShipTwo, vowed to push forward towards the dream of space flight for the paying public.
"We've always known that the road to space is extremely difficult and that every new transportation system has to deal with bad days early in their history," he said.
"Space is hard but worth it. We will persevere and move forward together," he added in a statement issued as he refueled en route for Mojave.
Television images showed the wreckage of SpaceShipTwo, a test vehicle that flies to the edge of space, amid brush east of Mojave, a few hours' drive northeast of Los Angeles.
The incident is the second disaster involving a US spacecraft this week, after an unmanned Orbital Sciences rocket carrying supplies to the International Space Station exploded after launch on Tuesday.
It is also a huge blow to British tycoon Branson's long-held dream of offering the first passenger space flights, which have been snapped up by Leonardo DiCaprio and other celebrities.
The Virgin chief is due in Mojave, where the California Highway Patrol confirmed that one pilot had died and another was seriously injured and taken to hospital.
The spaceship had been carried aloft on a bigger aircraft known as WhiteKnightTwo and then released for a test of its rocket engine above the Mojave desert, the latest in a series of tests.
Stuart Witt, head of the Mojave Air and Space Port, said WhiteKnightTwo took off at 9:20 am (local time), and released SpaceShipTwo at an altitude of 45,000 feet (13,700 metres) at 10:10 am, after 50 minutes of flight.
Two minutes later, Witt said it became clear as he watched from the space port that something had gone wrong, even though there was nothing obvious visually from the ground.
"If there was a huge explosion, I didn't see it," he said. "From my eyes and my ears, I detected nothing that appeared abnormal."
More than 500 people have already reserved seats and paid a deposit on the USD 250,000 ticket price for a minutes-long suborbital flight on SpaceShipTwo, which can carry six passengers.
The SpaceShipTwo's first commercial flight in which Branson and his family have vowed to travel -- has been repeatedly delayed, but was tentatively forecast for the first half of 2015, before yesterday's crash.