The SpaceShipTwo rocket plane built by Virgin Galactic has suffered an "in-flight anomaly" during a powered test flight that resulted in the loss of the aircraft, the company says.

The two pilots of SpaceShipTwo are equipped with parachutes, and after the reported anomaly two chutes were seen over the Mojave Air and Space Port in California where the SpaceShipTwo and its WhiteKnightTwo carrier plane had taken off on the flight.

"#SpaceShipTwo has experienced an in-flight anomaly. Additional info and statement forthcoming. -- Virgin Galactic (@virgingalactic)" the company tweeted.

Witnesses say they saw an inflight explosion, and debris said to be that of SpaceShipTwo was reportedly found later scattered across the desert.

"During the test the vehicle suffered a serious anomaly resulting in the loss of the vehicle," the company said in a statement. "The WhiteKnightTwo carrier aircraft landed safely. Our first concern is the status of the pilots, which is unknown at this time."

Shortly after that statement was released, officials with the California Highway Patrol confirmed one of the pilots died and the other is said to have sustained major injuries.

The test flight was the first time SpaceShipTwo fired its rocket engine in flight in more than 9 months, following a switch from the original rubber-based fuel compound to one based on a mix of plastics.

The new fuel was intended to increase the performance of the engine in the craft, which Virgin Galactic has spent years developing with the goal of giving paying passengers a trip to 62 miles above the earth, to the edge of outer space.

During such flights, the passengers would be able to experience several minutes of weightlessness similar to what astronauts encounter.

More than 700 people have placed an order for a ticket, paying $250,000 for the privilege.

Friday's test flight began with a takeoff at 12:19 ET, with the WhiteKnightTwo carrier aircraft release SpaceShipTwo at around 50,000 feet.