Tauri Group Forecasts Robust Suborbital Market, House Hearing Examines Issues

The Tauri Group, an Alexandria, VA -based consulting firm, forecasts a robust business for suborbital reusable launch vehicles (SRVs) in a report prepared for the Federal Aviation Administration (FAA) and Space Florida.  Tauri Group President Carissa Christensen testified to Congress about the report yesterday.

The 102-page report assesses the demand for SRVs in eight markets:  commercial human spaceflight, basic and applied research, technology demonstration, media and public relations, education, satellite deployment, remote sensing, and point-to-point transportation.   It presents three different scenarios:  a baseline scenario, a growth scenario, and a constrained scenario.  It also differentiates between two user communities:  “individual” and “enterprise” (government, business, non-profit).

The report is full of caveats about the assumptions used in the six-month study and even has a section entitled “major uncertainties” that lays out the sensitivities that readers should bear in mind.  Nonetheless, it provides hard numbers forecasting the “seat/cargo equivalents” one might anticipate and revenue for companies involved in the business that are likely to be remembered long after the caveats are forgotten.

In its baseline scenario, the report forecasts 370 seat/cargo equivalents per year in the first year of operations, growing to 500 per year in the 10th year, for a total of 4,518 over 10 years.    Revenue over the 10-year period is forecast to be $600 million in the baseline scenario.  The growth scenario forecasts $1.6 billion in revenue while the constrained scenario forecasts $300 million. 

The report identifies six companies that are developing a total of 11 SRVs to serve the market.  The companies are UP Aerospace, Armadillo Aerospace, XCOR Aerospace, Virgin Galactic, Masten Space Systems, and Blue Origin.

Representatives of three of those companies — Virgin Galactic (SpaceShipTwo), Blue Origin (New Shepard), and XCOR (Lynx) — testified along with Christensen before the Space and Aeronautics Subcommittee of the House Science, Space and Technology Committee yesterday.  Alan Stern, Southwest Research Institute, and Stephan McCandilss, Johns Hopkins University, also testified.

George Whitesides of Virgin Galactic and Andrew Nelson of XCOR said their companies expect to begin commercial operations by the end of next year.   Brett Alexander of Blue Origin said his company’s system is still in development and did not provide a start-date for commercial operations.

The key message from the company representatives was that they want Congress to provide a full eight-year learning period before the FAA is allowed to issue new regulations governing passenger safety on these missions.   In 2004, Congress passed a law requiring only “informed consent” for passengers.  Essentially the company must explain the risks, and it is then up to the customer to decide whether or not to take those risks.  The FAA was prohibited from issuing any other regulations for eight years.

The eight years was to give the companies and the government time to gain experience with commercial human spaceflight to determine what, if any, regulations are needed.  Those eight years passed without any of the companies offering commercial flights, however.   Earlier this year, Congress extended the learning period to October 1, 2015, but since the earliest any of the companies will be operating is 2013, that would be only a two year learning period.   The companies want the full eight years — and eight years from the first commercial SRV flight, not eight years from whenever new legislation is passed — or even an indefinite prohibition on regulations.  Nevertheless, they said they welcome the FAA’s decision to begin what could be monthly telecons to discuss the issues.  The first is scheduled for later this month.

Stern and McCandliss discussed the utility of SRVs for scientific research.   Stern, a former NASA Associate Administrator for Science and principal investigator of the New Horizons mission that is on its way to Pluto, believes there will be a very strong market for scientific researchers.  He stressed that it is not that SRVs will go anyplace that is new, but that they will be launched routinely, providing researchers with frequent, inexpensive access to the space environment, unlike sounding rockets which have been used for decades for certain types of research.   McCandliss, an astrophysicist, focused on the differences between using SRVs and sounding rockets, emphasizing that each has their own unique capabilities and some experiments will continue to need sounding rockets.

Whatever the scientific demand may be, Christensen and the company representatives all conveyed that they expect human spaceflight to be the core business by far.