Space tourism industry is lifting off

From the X Prize to civilian trips to the moon, private spaceflight is attracting more interest among investors and would-be voyagers.

from the July 26, 2007 edition

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Indeed, since Rutan won the X Prize, "there had been a slow but continuously accelerating pace of development" in the alternative spaceflight arena, says Peggy Slye, director of the space and telecommunications division for Futron Corp., an aerospace consulting firm in Bethesda, Md.

Many companies have progressed because their founders had deep pockets from previously successful business ventures. Or companies collected what analyst Derek Webber dubs "angel money" – $10,000 to $15,000 investments from people with shallower pockets but an abiding interest in the future of spaceflight.

But Rutan's victory in claiming the first X Prize represented "a real paradigm shift," adds Brett Alexander, who served as senior space-policy analyst in the White House Office of Science and Technology Policy. Mr. Alexander just joined the X Prize Foundation as executive director of its space-related competitions.

Earlier this month, Northrup Grumman, which owned 40 percent of Rutan's company, called Scaled Composites, reportedly bought the company outright – although Rutan will remain in the pilot's seat. Scaled Composites is building a fleet of five SpaceShip Twos for Virgin Galactic.

Another key event, Alexander says, came last August when NASA split $500 million between reusable-rocket start-ups – Space Exploration Technologies (SpaceX) and Rocketplane Kistler. The goal is to build reusable rockets that dramatically cut the cost of launching payloads into space. "Part of it is government money, but government as catalyst is a good thing," Alexander says.

Other investors are "really starting to take notice," he adds. He recalls attending an space-investment conference in Dallas in May. "I went down to the finance thing and kind of scratched my head, thinking: Is there going to be anyone in the room who actually has money? I walked in and it was standing room only.... There were a lot of people there from real investment houses."

With the eyes of so many potential investors looking on, the next three to five years will be crucial , adds Alexander. Virgin Galactic will have started its flights. And companies like SpaceX, whose Falcon 1 rocket left the launchpad in March, only to fail to put its payload into orbit, will be under close scrutiny.

"There will be incidents. There will be difficulties," Alexander concludes. "But by and large, the industry has to live up to a good measure of the hype that is building around it."

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