Development Work Drives Personal Spaceflight Industry Growth

U.S. companies vying to open up space to ordinarycitizens saw total collective revenue surpass a quarter of a billion dollars in2007, a 50 percent increase over the previous year, according to a new reportcommissioned by the Personal Spaceflight Federation.

Carissa Christensen,co-founder and managing partner of the Tauri Group, amarket research firm that prepared the report, said the findings were based oninterviews with 19 Personal Spaceflight Federation member companies and datagleaned from external research. In an interview here, she said she believes thereport is the first formal quantification of the economic activity associatedwith this emerging industry.

The TauriGroup and the Personal Spaceflight Federation intend to update the reportannually.

The report, highlights ofwhich were slated for release May 31 here at the 27th annual InternationalSpace Development Conference, shows that personal spaceflight was a $268million industry in 2007. Fully three-quarters of that revenue — or about $206million — came from "hardware sales, development and supportservices." Included in this category is the SpaceShipTwosuborbital vehicle being developed by Scaled Composites of Mojave, Calif., for Virgin Galactic. Another example is Space Exploration Technologies'Falcon 9 rocket and Dragon capsule, which are funded in part by NASA's $500million Commercial Orbital Transportation Services (COTS) space stationlogistics program and have crew-carrying potential.

Christensen said COTSwork by Hawthorne, Calif.-based Space Exploration Technologies, or SpaceX,was the primary driver of the 67 percent growth in hardware and developmentrevenue the industry saw from 2006 to 2007. In fact, all of SpaceX'srevenue, including income from the U.S. Defense Department for launches of thecompany's Falcon-1 small rocket, was included in the total since the technologyhas application to the company's human spaceflight effort, said John Gedmark, executive director of the Personal SpaceflightFederation.

Christensen noted thatOklahoma City-based Rocketplane Kistler's 2006and 2007 COTS revenue was not included in the study since the company wasfocused strictly on a cargo-delivery capability. Likewise, Orbital SciencesCorp.'s COTS work will not be included in next year's report since the Dulles, Va.,company likewise is focusing on cargo delivery.

Personal spaceflightservices generated $38.8 million in 2007, about one-seventh of the industrytotal for the year, the study found. This categoryincludes the $20 million-per-seat Russian Soyuz flights booked through SpaceAdventures of Vienna, Va., and the five- and six-figure deposits NewMexico-based Virgin Galactic and others have taken for future suborbital flights.

Finally, about $24million of the industry's 2007 revenue came from non-spaceflight activitiesthat member companies engaged in to make ends meet. That figure was unchangedfrom 2006.

Brett Alexander,president of the Washington-based Personal Spaceflight Federation, said thereport paints a picture of an industry still in development. "We are notin the service-providing phase by and large," he said."But the industry has moved from concept to real development. This reportshows that significant development and significant investment activities aretaking place. It's an emerging industry and we are in the emerging phase ofit."

Christensen said thefederation's member companies secured $1.2 billion in total investmentcommitments through the end of 2007, with about one-fourth of that moneyalready received and spent.

Individuals and angelinvestors are by far the biggest source of capital, accounting for just overhalf of the money raised to date. Various government sources, including federalresearch and development funds and state and local tax credits, account foranother $270 million provided or promised through 2007. Private equity andventure capital firms are the next biggest source, coughing up $250 million,while reinvestment of profits by federation member companies accounted for $12million.

"There have been somany numbers floated around — $2 billion of investment, $1 billion ofinvestment. The question was: what is the real number and why are we confidentin that number?" Alexander said, explaining the motive for commissioningthe report. "We want to be accurate about what the industry is and what isisn't and where it's going and where it's not going."

Examining the employmentfigures included in the report, SpaceX's dominance ofthisfledgling segment of the broader space industry is once again in evidence.

Of the 1,227 peopleemployed by the Personal Spaceflight Federation's 19 member companies, 470 workfor SpaceX. Most of that work force, however,currently is engaged in designing, building and preparing to fly the rocketsneeded to execute a 12-flight manifest that so far includes not a single crewedlaunch.

Meanwhile SpaceX's 46,000 square meters of facility space — most ofit acquired only recently — is nearly twice that of all other member companiescombined, according to the report. However, Bigelow Aerospace, the Las Vegascompany working toward deployment of a small commercial space station, isbuilding an additional 18,500 square meters of office and factory space that isdue to be finished by 2010, the report says.

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