P Collins*, K Isozaki** & R Wakamatsu***

In recent years it has been recognised that the potential popularity of space flight among the general public, as revealed by market research in Japan, Canada, USA and Germany, may create sufficient commercial demand to support the development and operation of low-cost reusable passenger launch vehicles on a commercial basis. This possibility has led to the production of the conceptual design of the 50-pass-enger " Kankoh-maru" VTOL rocket, a development and test-flight scenario, an estimate of Kankoh-maru's development and manufacturing costs, studies of its operation from airports, pilot operations and orbital operation issues, and preliminary estimation of its likely operating costs.

This work was summarised in a paper presented at the 1997 IAF Congress (1) and some 20 papers on this work are now downloadable from the World Wide Web at (2). Since that time two particularly significant reports have been published in the USA which have recognised that the JRS's work on this subject is important and fundament-ally correct. This has encouraged the JRS to continue with this work.

On March 25, NASA Report NP-1998-03-11-MSFC referred both directly and indirectly to the JRS Space Tourism Study Programme, and concluded that popular commercial space travel is likely to start soon; it offers the possibility of financing the development of reusable passenger launch vehicles; and it could grow to exceed $10 billion/year, several times larger than the existing launch business (3). The report, jointly prepared by NASA and the US Space Transportation Association (STA) also referred to the continuing decline in taxpayers' support for government space activities around the world, while at the same time the large scale of the potential demand for space tourism services is becoming increasingly widely appreciated. The report led to the establishment of the Space Travel and Tourism Division of the STA, and to plans to establish an international association to encourage international cooperation in this field.

In August 1998 the American Institute of Astronautics and Aeronautics ( AIAA) together with the Canadian Aeronautics and Space Institute ( CASI) and the Confederation of European Aerospace Societies ( CEAS) published the report " International Cooperation in Space: New Government and Industry Relationships" (4) being the result of an international workshop held in January of which one of five working groups was on the theme Public Space Travel.

In addition to that working group's separate 6-page report, the Executive Summary included the finding: "One of the more ambitious and space-motivat-ing ventures would be the introduction of a viable space tourism industry. Terrestrial tourism accounts for some $3-4 trillion per year in revenues, and projections indicate that space tourism could be as much as 1% of that total. Such an industry may be closer to reality than we think because of the large potential commercial market and the fact that space launch technology may permit such a venture in 5-10 years. Market surveys have indicated high public interest, and a large multi-billion dollar market, if fares can be made commensurate with current "high adventure" excursions (less than $100,000 per ticket). This effort will be international because of both its worldwide interest and the implicat-ions such an industry will have on worldwide services, operations, stand-ards, and restrictions. Government-to-government, government-to-industry, and industry-to-industry relationships will be a necessary element of this international industry, much as international tourism is today".

The Executive Summary also included the recommendation: "In light of its great potential, public space travel should be viewed as the next large, new area of commercial space activity. It will be international by its nature and should be given high priority and visibility by space agencies, space manufacturing and service industries, terrestrial travel and tourism industries, and the financial and insurance communities".

These two endorsements were very encouraging for those involved in the JRS study programme which has been criticised and belittled by people with an inadequate understanding of the fundamental forces - technical, economic and political - which are currently driving developments in the space industry worldwide.

Space tourism-related work in Japan over the past year has comprised mainly legal studies, work towards VTOL demonstrator vehicles, and commercialisation activities. These are discussed in the following.

The work of the first two phases of the JRS Transportation Research Committee has been reported in detail in several papers, many available in (2). The 3rd phase of activity is currently focusing on regulatory issues that must be resolved in order to develop, manufacture and operate the Kankoh-maru passenger launch vehicle. These notably include safety issues that will be involved in certification for passenger-carrying, and the definition and operational implementation of the concept of "spaceworthiness". This study is using existing aviation regulations as the baseline for identifying the regulatory innovations that are required for Kankoh-maru, and it is discussed in more detail in (5). The final report of this phase of the Trans-portation Research Committee's study is due to be published late in 1998.

VTOL Demonstrator Projects

A fourth phase of activity is under preparatory discussion which would involve planning the construction and operation of a VTOL demonstrator project, since it is widely agreed that an intermediate step is required between the current state-of-the-art of VTOL rockets, as established by the DC-X vehicle flown in the USA from 1993-96, and an orbital passenger-carrying vehicle.

It is hoped that such a vehicle project will generate the confidence, both technical and financial, needed for a passenger vehicle such as Kankoh-maru to be developed commercially. There are a number of key parameters that must be decided for such a demonstrator project which have critically important implications for both its value and its cost. - Should it be piloted or unpiloted? - Should it be subsonic, supersonic, hypersonic or orbital? - How large should the vehicle be? - Should the project be national or international? - Should it include production or just operations? - What budget is appropriate and feasible?

Since 1996 studies have been under way at ISAS of a reusable VTOL sounding-rocket (unpiloted) capable of carrying scientific payloads to altitudes of several hundred kilometres (6, 7). If this project is funded, building and operating such a vehicle would generate a wealth of experience relevant to a passenger-carrying VTOL vehicle.

In 1997, experimental tests of an expander-cycle, liquid hydrogen-fueled rocket engine were performed by engineers from the Institute for Space and Astronautical Science (ISAS) and Ishikawajima-Harima Heavy Industries (IHI) to determine whether the throttling response could be fast enough to provide directional control for a VTOL vehicle such as the Kankoh-maru (8). These tests were path-breaking; this question has never been studied before, and the results were positive: if the gain of the control circuitry is made sufficiently high, the response can be fast enough. This is very encouraging since it eliminates the need for gimballing of Kankoh-maru's engines, which in turn both reduces the mass and complexity of the propulsion system and simplifies the design of the base of the vehicle, since there is no need for apertures around the engine nozzles, and thermal protection inside.

Following that work, plans were made to use the same engine in a small VTOL demonstrator vehicle (9). As of late summer 1998, the engine has been installed in a 3 metre tall vehicle with a gross lift-off mass of some 300 kg, and has undergone initial engine-tests at ISAS's Noshiro Rocket Engine Test Centre. The vehicle is due to perform hovering flight-tests up to 10 meter altitude in the late autumn.

Business activities that are helping to lead towards the realisation of commercial space travel services are also underway in various areas.

JRS Business Research Committee

The Space Tourism Business Research Committee of the JRS concluded its preliminary study of the operations and economics of Kankoh-maru in 1997, and published the findings, as described in (1). As a 100% national project, it was estimated that the development and certification of Kankoh-maru would cost some \1.4 trillion (about $10 billion) including the production of 4 vehicles and perform-ance of 1200 test flights assumed to be necessary in order to be certified for passenger-carrying, like aircraft.

As a follow-up to the work of the Business Research Committee, in September 1998 the JRS established the Commercial Space Transportation Legislation Research Committee to study the regulatory and legal issues that must be resolved in order for a space tourism industry to be established. There is some overlap with the activities of the Transportation Research Committee phase 3, but this committee will focus mainly on issues other than "spaceworthiness" and vehicle certification, and will include broader issues of the innovations needed in aviation law and space law, safety, insurance, air traffic control, international standards and coordination, and others.

Although no official decisions have been announced, it seems likely that other countries will follow the US government's important initiative in placing reusable space vehicles within the legal and regulatory framework of civil aviation.

The US initiative has included moving the US government's Office of Commercial Space Transportation (OCST) into the Federal Aviation Administration (FAA) in 1995; sections of the Commercial Space Act expected to become law in 1998; and the FAA's recently started study of the possibility of extending air traffic management to include vehicles in low Earth orbit, as described in (5).

As an innovative consumer service, it is understood that the acceptance of space tourism will be much influenced by its treatment in the media. Articles and television programmes on the subject have gradually increased in number in Japan (and other countries), all being very positive in the credence and the attractive image they give to the idea. In early 1998 Suntory Ltd, which has the sales rights for Pepsi Cola in Japan, started a unique multi-million dollar advertising campaign for Pepsi offering sub-orbital flights to 5 winners of a contest, and using the slogans "Let's go to space with Pepsi" and "2001: a space odyssey" (10). This campaign is not international, but unique to Pepsi in Japan, and is considered to have been very successful by Suntory. 600,000 customers have registered as participants, and a Suntory spokesperson said that the contest "...made a large contribution to increasing sales of Pepsi Cola" which grew 30% during the 1998 first half (11).

A contributor to the decision by Pepsi Japan was that it is well known from market research that the idea of space tourism is very popular in Japan (12, 13). International air travel from Japan has grown by about 1 million passengers per year per year for the past two decades, creating a substantial travel industry, and once passenger travel services to space become available the number of Japanese customers for such services can be expected to grow rapidly. Although it is not yet clear in which year commercial sub-orbital space flight services will begin, Suntory's Pepsi campaign is having a powerfully beneficial influence in raising public awareness of the feasibility of popular space travel in the very near future.

The popularity of the idea of space tourism also led to the establishment in 1998 of Japan's first space travel company Spacetopia Inc (14). In 1985 the US travel company Society Expeditions collaborated with Pacific American Launch Systems to plan " Project Space Voyage" offering short orbital trips to the public in a VTOL vehicle, the " Phoenix" (15), to start in 1992. At that time, the Japanese travel company Traveltopia Inc established a subsidiary, Spacetopia, to invest in Project Space Voyage and gather customers in Japan. That project turned out to have been premature, but Spacetopia Inc. was incorporated in 1998 to make a second, more concerted attempt to realise commercial passenger space travel services.

Spacetopia Inc has started to develop a role as a space travel company, planning near-future passenger space travel offerings - terrestrial, sub-orbital and later orbital, as well as non-space travel services (14). It is also working to bring about the availability of these services as soon as possible by collaborating with the JRS and with other companies in both Japan and other countries. Plans include a range of activities in preparation for establishing a "spaceline" to operate flights of rocket-powered transport vehicles (14).

Like aviation today, a future space tourism industry will involve a wide range of different business activities, from manufacturing to financial services. Also as in aviation, com-panies from different countries will play more or less important roles in different parts of the overall activity, depending on the strategies they follow over the next few years in order to establish competitive capabilities in these different areas.

It is too early to be able to predict which companies will play major roles in which areas. However, companies and countries which make no effort will clearly play only a small or no role; they will lose the satellite launch market to low-cost reusable launch vehicles, and will be left to fight for a share of the shrinking government space budget. On the other hand, companies which establish a significant lead over competitors in the early stages are likely to continue as leaders of their fields. This

is a common (though not invariable) pattern in new industries, and Ashford has argued that in the case of space tourism the first-comer is likely to gain a large cost and reliability advantage which will make it hard for following companies to compete with its rapidly maturing capabilities (16).

Manufacturing is a relatively small part of the total aviation industry, typically ranging from 5% - 10% of the operating revenues of airline companies. Obtaining a significant share of the manufacturing work involved in the space tourism industry will be a challenge for Japanese aerospace manufacturers, which are relatively small compared to major US and European aerospace companies. Nevertheless it may be particularly important because Japan's inter-national economic advantage lies in manufacturing rather than in services.

It will also be challenging for Japanese companies to act with sufficient speed to play a significant role. For example, the $10 million "X Prize" for the first team to fly a piloted vehicle to an altitude of 100 km has stimulated entries from 14 teams, 10 US, 3 European and 1 south American - but none from Japan (17). Since the technology required is not very difficult, rocket-planes having flown more than 40 years ago in several countries, one or other team is sure to succeed within a few years at most.

The step from winning the "X Prize" to operating commercial space tourism services is not a small one, but by aiming directly towards creating a space tourism industry, the "X Prize" route is very different from the path taken by government space agencies to date. It also seems to offer a better chance of leading to profitable commercial passenger space activities, which will create a wide range of new commercial opportunities for manufacturing companies.

In aviation, the revenues and employment generated by airline operations are many times larger than those of aircraft manufacturing (and many more times larger than those generated by aircraft development work). This is very different from expendable launch vehicles, for which total manufacturing turnover is approximately equal to development costs, and operations are not a separate activity (since the rockets are used only once).

Passenger space vehicle operations will be more like aviation, and the revenues and employment that they generate can be expected to grow many times larger than vehicle manufacturing - provided that the demand for launch services grows sufficiently large to enable "airline like" operations. As in aviation there are many more countries from which airlines operate than which play a significant role in aircraft manufacturing, so space tourism vehicles will operate from many more countries than play a significant role in their manufacture.

Japanese airlines are relatively weak in global terms, the two leading companies, Japan Air Lines (JAL) and All Nippon Airways (ANA), having generated large losses in recent years. The establishment in 1998 of the new, low-cost airline 'Skymark' and plans for two more are positive signs of restructuring in the industry, though the fact that they are the first new airlines to be established in Japan for 35 years is a sign of the distance to be made up in order to reach global stand-ards of competitiveness. How soon and what role Japanese companies will play in passenger space flight operations may well depend on the persuasiveness of the ongoing work of the JRS Research Committees.

Even more numerous than airlines are companies providing customer services, including travel companies, tour operators, hotels and others. Spacetopia Inc and other companies in the travel industry could play a significant role in passenger space travel - with the proviso that there is no venture capital industry as such in Japan, which may hinder Japanese companies from raising the finance needed to participate in a timely manner.

These include a wide range of activities including airport operation, vehicle maintenance and repairs, in-flight service provision, insurance, financing marketing, and etc. Other things being equal, Japanese companies operating in these fields could play as much of a role in passenger space travel as they do in aviation today, but this will require some preparatory activity on their part.

In the current period of global business restructuring mature industries continually reduce the numbers of their employees, and move more labour-intensive operations to lower-cost countries. In parallel with this trend there is a need for continuous innovation and establishment of new industries in the advanced countries in order to employ those no longer needed in older industries. This process is closely related to some of the current economic difficulties in Japan and other south east Asian countries, where there is serious over-capacity in many mature industries, particularly automobile manufacturing, with 50% over-capacity globally, and a wide range of electronic products.

In addition to new industries that are currently popular with investors, such as "multi-media", leisure, and services for the elderly, the space industry is sometimes cited as a field that will generate economic growth and employment in the future. However, the satellite communications industry is already reaching maturity, having consolidated recently, and the number of manufacturing companies has shrunk to only a handful worldwide. In addition, sales of such satellites are now included within the rules of the World Trade Organisation, and government subsidies are restricted.

Furthermore, government space agencies do not project a large increase in commercial applications of their work. In particular, crewed space activities remain almost entirely taxpayer-funded, with no plans to become commercial in the foreseeable future. World-wide these activities have absorbed many hundreds of $ billions of government investment to date: if this investment had been commercial, it would have created an industry with annual turnover of hundreds of $ billions, generating tens of $ billions of profits from which the investment would be repaid, and creating millions of permanent jobs - but there is no such industry today.

However, it is gradually being recognised that passenger space travel services to and from and in orbit, uniquely, have the potential to grow large enough to generate commercial demand for "crewed space activities" on a scale capable of repaying this investment. Both the NASA/STA and AIAA reports discussed above recognised this, and recommended that space travel services for the general public should become a major focus of space development activities (3, 4), the recommended role of government agencies would being not to operate such services but to facilitate them, as they do for aviation.

The commercial passenger space vehicles required by this new industry will also include accommodation facil-ities in orbit. These offer the prospect of substantial commercial demand for the components being developed for the currently planned international space station. Japan, like several other countries, is spending several $ billions to develop a part of the space station, the "Japanese Experiment Module" (JEM). It will be economically very beneficial if there is commercial demand for manufacturers to make many more modules once the development of JEM is completed - but only the commercial demand for passenger accommodation offers this possibility.

By providing the potential to finance the development of low-cost space transportation, space tourism indeed has the potential to provide commercial support for a wider range of activities, including solar power satellites (18). The potential growth of passenger travel to and from space could even generate sufficiently high demand for liquid oxygen in low Earth orbit that it could be supplied by lunar exports, which could make a major contribution to financing lunar development (19).

As emphasised by Penn and Lindley, the largest obstacle to creating a space tourism industry is not technological but the "...complete culture change that would be required before the rethink-ing and redesign... can begin" (20). With the end of the cold war nearly a decade ago, the question "What should be the goal of government space development activities?" has become an important and controversial one, with space agencies' budgets being cut as the proposed answers to this question fail to convince taxpayers.

At a time of faltering economic growth world-wide due to over-capacity in many existing industries, and in the absence of cold-war competition with the ex-Soviet Union, it is surely desirable to aim explicitly to contribute to economic growth through targeting activities that could become commercially profitable. In this case, space tourism should be given formal priority, since it is now recognised as having unique commercial promise.

However, although innovation is essential for continuing economic growth, it is commonly resisted. In Japan, for example, there is continuing strong resistance to the now urgent need for restructuring in much of Japanese industry. The delay in acceptance of the goal of space tourism despite severe shrinkage in the global aerospace industry is another example of this. Yet, if the public were able to vote on it, or if the future growth prospects were considered objectively, investment aimed at creating a commercial space tourism industry would surely be accepted as being likely to have more beneficial economic effects than investment in any other space activities.

The work of the Japanese Rocket Society and its individual and corporate members to bring about a space tourism industry is growing in influence and continues to progress. The feasibility of initiating commercial space tourism services in the near future is becoming more widely recognised by professional organisations, the media, the general public, companies, politicians and academics. The economic potential of this new field of business is also gradually becoming recognised by companies in a much wider range of industries than have participated in space activities to date. As a result we can expect to see growing efforts devoted towards exploiting the many commercial opportunities that will arise with the development of space tourism services, involving companies in Japan and in other countries, and international partnerships.

1. P Collins and K Isozaki, 1997, " Recent Progress in Japanese Space Tourism Research", Proceedings of IAF Congress, Paper no. IAA-97-IAA.1.2.02.
2. Space Future - Library Listing
3. D O'Neil et al, 1998, "General Public Space Travel and Tourism - Volume 1 Executive Summary", NASA/STA, NP-1998-03-11- MSFC; also downloadable from www.spacefuture.com/archive/general_public_space_travel_and_tourism.shtml
4. M Gerard and P Jefferson (eds), 1998, " International Cooperation in Space: New Government and Industry Relationships", Report of an AIAA/ CEAS/ CASI workshop, AIAA.
5. P Collins and K Yonemoto, 1998, "Legal and regulatory issues for passengers space travel", Proceedings of IISL, Paper no. IISL-98- IISL-3-09; also downloadable from www.spacefuture.com/archive/legal_and_regulatory_issues_for_passenger_space_travel.shtml
6. Y Inatani, Y Naruo and T Yamada, 1996, " A Concept of Reusable Sounding Rocket with Enhanced Maneuverability and Operability", Proc. 20th International Symposium on Space Technology and Science, Paper no. ISTS-96-j-01v
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8. Y Naruo et al, 1997, "Throttling Dynamic Response of LH2 Rocket Engine for Vertical Landing Rocket Vehicle", Proceedings of 7th ISCOPS, AAS Vol 96; also downloadable from www.space future.com/archive/throttling_dynamic_response_of_lh2_rocket_engine_for_vertical_landing_rocket_vehicle.shtml
9. Y Naruo, 1998, " Towards the realisation of low-cost space transportation systems", SPS 2000 News, ISAS, No16, pp 8-9.
10. www.pepsi.co.jp/whats_frame.html
11. T Inoue, 1998, "Suntory Puts Pepsi on Attack in Cola War", Nikkei Weekly, September 14, p 7.
12. P Collins et al, 1994, "Commercial Implications of Market Research on Space Tourism", Journal of Space Technology and Science, Vol 10, No 2, pp 3-11; also downloadable from www.spacefuture.com/archive/commercial_implications_of_market_research_on_space_tourism.shtml
13. " Potential Demand for Passenger Travel to Orbit", Engineering Construction and Operations in Space IV, American Society of Civil Engineers, Vol 1, pp 578 - 586.
14. www.spacetopia.com
15. www.spacefuture.com/archive/history_of_the_phoenix_vtol_ssto_and_recent_developments_in_single_stage_launch_systems.shtml
16. D Ashford, 1989, " The Prospects for European Aerospace Transporters", Parts 1 - 4, Aeronautical Journal, Vol 93, Nos 921-923.
17. www.xprize.org
18. Collins and Taniguchi, 1997, "The Promise of Reusable Launch Vehicles for SPS", Proceedings of SPS '97 Conference, Canadian Aeronautics and Space Institute, pp 209-214; also downloadable from www.spacefuture.com/archive/the_promise_of_reusable_launch_vehicles_for_sps.shtml
19. P Collins, 1998, "Tourism in Low Earth Orbit: The Trigger for Commercial Lunar Development?", Proceedings of Space 98, ASCE, pp 752-756; also downloadable from www.spacefuture.com/archive/tourism_in_low_earth_orbit_the_trigger_for_commercial_development.shtml
20. J Penn and C Lindley, 1997, " Requirements and Approach for a Space Tourism Launch System", Proceedings of IAF, Paper no. IAA-97-IAA.1.2.08.