‘What the hell happened?’: The rise and fall of suborbital space tourism companies

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This article originally appeared in the June 5, 2017 issue of SpaceNews magazine.

Burt Rutan was not happy.

The famous aircraft designer, now retired, was one of the participants in a webcast in early January promoting the recent book “How to Make a Spaceship” about the development of SpaceShipOne by Rutan’s Scaled Composites. Peter Diamandis, chairman of the X Prize Foundation, was also there, giving his characteristically upbeat assessment of the future of commercial space, including the foundation’s ongoing space competition, the Google Lunar X Prize.

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Rutan didn’t share that optimistic view. “What the hell happened? We got nothing done!” he told Diamandis. “Why aren’t you horribly disappointed?”

Thirteen years ago, Rutan felt differently. At a press conference just before the first flight to space by SpaceShipOne in June 2004, Rutan predicted a vibrant future for commercial suborbital spaceflight. He believed a successful flight would demonstrate that even small companies like his, and not just government agencies, could send people into space.

“I believe that our real significance of this program is that realization,” he said then, “and I believe that realization will attract investment, and that realization will attract a whole bunch of activity and very soon it will be affordable for you to fly.”

So, as Rutan put it 13 years later, what happened? At the time he spoke in 2004, Scaled Composites was one of more than two dozen teams competing for the $10 million Ansari X Prize. The widely held assumption then was that at least some teams would continue to develop their vehicles after someone won the prize, or that new ventures would emerge to serve a growing market for suborbital spaceflight.

That didn’t happen. Most of the X Prize teams faded away after Scaled won the prize, unable to raise money or develop the technology needed for their vehicles. The few that would continue on would encounter problems of one kind or another that would delay or derail their efforts.

RIP Rocketplane

One example was Rocketplane. By the time SpaceShipOne won the X Prize, the company — which originally planned to develop a suborbital spaceplane as a first stage for launching satellites — had shifted focus to space tourism. It set up operations in Oklahoma, lured by tax credits the state offered, and planned to fly its Rocketplane XP vehicle from a decommissioned air base in the western part of the state.

The company, though, got too ambitious. It acquired the assets of the former Kistler Aerospace, which has been developing an orbital reusable launch vehicle in the 1990s, and won a NASA Commercial Orbital Transportation Services (COTS) agreement in 2006 to continue development of that vehicle to transport cargo to the space station. That work overshadowed the suborbital spaceplane project, shifted to a subsidiary called Rocketplane Global.

Rocketplane ran into problems when it struggled to raise money, which it blamed on the 2008 financial crisis. NASA revoked the COTS agreement because of Rocketplane’s fundraising problems, and work on both the orbital and suborbital vehicles ground to a halt. In 2010, Rocketplane and its subsidiaries filed for Chapter 7 bankruptcy protection, liquidating their assets.

One of Armadillo Aeropspace's suborbital spacecraft concepts featured a fishbowl-like crew cabin.
One of Armadillo Aeropspace’s suborbital spacecraft concepts featured a fishbowl-like crew cabin. Credit: Rocketplane

Adios, Armadillo

Armadillo Aerospace, funded by video game pioneer John Carmack, continued development of its vehicles long after the X Prize was won. Armadillo experimented with a variety of designs for both sounding rockets and crewed vehicles. In 2008, it announced a partnership with the Rocket Racing League to develop a two-person suborbital vehicle that would take off and land vertically, its crew cabin looking like a giant fishbowl.

That partnership was short-lived, but at the 2010 International Space Development Conference in Chicago, Armadillo announced a new agreement with Space Adventures, a company that had been promoting suborbital space tourism since the late 1990s. “I was just so impressed,” Eric Anderson, president and chief executive of Space Adventures at the time, said of Armadillo at the conference.

Armadillo, though, made little progress on that vehicle, focusing on reusable sounding rockets. Even that could not be sustained: in 2013, Carmack announced that Armadillo was in “hibernation mode” because of a lack of money. “I’ve basically expended my ‘crazy money’ on Armadillo,” he said then, a reference to the more than $1 million a year of his own money he had been putting into the company. Most of the original Armadillo team has since formed a new company, Exos Aerospace, but with a focus on sounding rockets versus suborbital space tourism.

Space Adventures continues to market suborbital spaceflights, along with its better-known trips to the space station, but doesn’t have a partner now. “We are not currently working with a launch provider, but when these vehicles are operational, we are hopeful” to provide access to those flights for its clients, company spokeswoman Stacey Tearne said May 31.

Rocketplane Global's suborbital dreams ended with Chapter 7 bankruptcy.
Rocketplane Global’s suborbital dreams ended with Chapter 7 bankruptcy. Credit: Rocketplane

XCOR Aerospace, for a time, appeared to be the biggest contender to provide suborbital space tourism, perhaps before Virgin Galactic. While not a contender for the X Prize, the company was working on a suborbital spaceplane called Lynx that could carry a pilot and one customer, zooming into space directly from a runway under rocket power.

XCOR also suffered its share of developmental delays, and lacked a wealthy backer like Blue Origin’s Jeff Bezos or Virgin’s Richard Branson. By late 2015, most of the company’s founders had left the company, and in May 2016 the new management announced it was putting development of Lynx on hold so it could focus on an engine project for United Launch Alliance.

The company, however, claims it has not abandoned the Lynx. The hardware built for the Mark 1 prototype vehicle remains in the company’s Mojave, California, facility, where a handful of employees are performing a “system review and documentation effort,” company spokesman Marco Martinez-Venturi said in March.

Martinez-Venturi acknowledged that additional progress would depend on the company’s ability to raise more money. “Although we have advanced the program with much of our recent efforts, completion of the prototype is funding dependent,” he said. “The start of the test flight program, like the vehicle completion, is dependent on funding.” He did not respond to a request for an update on Lynx in May.

So what happened? Perhaps Rutan was wrong: simply because he was able to fly a suborbital spacecraft didn’t mean anyone else could do it as well. He had his significant technical expertise coupled with the financial backing of Paul Allen. Moreover, SpaceShipOne was focused on the specific goal of winning the X Prize, rather than entering regular commercial service. SpaceShipOne never flew again after winning the X Prize in October 2004, nor has any other crewed suborbital spacecraft.

Rutan’s lamentations in that January webcast managed to bring down even Diamandis. “I would have never believed in 2004 that, by 2017, we would not be taking private people to space,” he said. “It’s ridiculous.”

“I’m surprised to see any kind of smile on any of our faces,” Rutan said. Perhaps, though, some time soon Blue Origin or Virgin Galactic will start flying space tourists, and give the famous designer something to finally smile about.