
The commercial space transportation industry, as defined by the Federal Aviation Administration (FAA), consists of companies in the business of providing space transportation to a multitude of government, civil, commercial and research customers requiring the movement of payload to, from or within the space environment. As a result, the industry essentially serves as the backbone of any market using the space environment to conduct its primary business, such as satellite imaging, television services, global positioning, even space tourism. Types of space transportation systems include:
- Suborbital Systems
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Space transportation systems operating within Earth’s gravitational influence below a typical orbital velocity of 17,500 mph. Such systems generally include high altitude rockets and space plane vehicles developed to achieve an altitude considered to be space (100 km) but without the sufficient velocity needed to remain in space. These systems hold high potential for space tourism, education, scientific and technology development market segments.
- Orbital Systems
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Space transportation systems designed to operate primarily in the extreme conditions of space at or greater than orbital velocity and provide support and transportation to and from planetary orbits. These vehicles might generally be considered "transfer vehicles".
- Launch Vehicle Systems
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Spanning the gap between the suborbital and orbital regime of space flight requires rockets having the power necessary to overcome Earth’s gravity and deploy payloads into the orbital space environment. These rockets, also known as "launch vehicles", comprise the backbone of the industry because they are currently the only feasible, practical and widely-tested method within the known laws of physics capable of providing the substantial propulsive power needed to place payloads into Earth orbit and beyond.
History In A Nutshell
Space travel is one of the oldest dreams of mankind. For centuries humans have gazed into the night sky and contemplated what it might be like to go to the stars. And for centuries exploring space was limited to star-gazing and "backyard" astronomy using primitive telescopes. Only recently within the last 60 years has the acquisition of aerospace technology allowed humanity to actually explore space firsthand, offering new thrills and capabilities unlike any yet conceived. In that time only a few humans have had the opportunity to realize the dream and travel into space aboard expensive launch vehicles costing tens of millions of dollars. But like any dream, if the means to fulfill it are made affordable then people will pursue it.

The beginnings of space transportation, and essentially humanity’s firsthand exploration of space, can be traced back to the end of World War II. German rocket scientists, responsible for developing the V-2 and other offensive “wonder” weapons, were highly sought after by the United States and Soviet governments. Werner von Braun became the key German rocket scientist responsible for developing the V-2 rocket into the beginnings of the U.S. missile and space programs. The 1950’s became a period of milestones with tireless trial and error research and development into rocket technology. Intercontinental Ballistic Missiles (ICBM’s), the result of tens of millions of dollars of government military research and spending, were the initial target for implementation of rocket technology and were developed to gain a "first-strike" performance and capability edge over the competition. Since these rockets were designed to be "fire-and-forget" missiles and could only be launched once, little focus needed to be placed on re-usability and cost-effectiveness.
Pioneering the Manned Space Program

By 1957 ICBM rocket development culminated in the Soviets launching the first satellite, Sputnik, into Earth orbit, thereby effectively jump-starting the space race. The United States, immediately perceiving the endeavor as a threat to its own national security and, after widespread fear of a “Red Moon”, began to allocate more and more funds to its own space ventures. As the space race accelerated, the U.S. and Soviet space programs devoted themselves to developing access to space in the quickest manner possible, regardless of the cost. Aerospace engineers on both sides found that the most effective way to keep up with each other was to apply what was already developed and known to work, that being ICBM hardware, directly to space launch vehicles. As this was being done, entirely new issues were encountered with converting ICBM technology from unmanned to man-rated capability. Since maintaining an internal environment suitable to human life requires various considerations and life support systems, and because manned spaceflight had never been achieved before, the cost to develop these new subsystems increased the overall cost of the launch vehicles even more. Their continued expendable nature accentuated the high cost problem even more as the overhead costs needed to develop those expensive systems were essentially thrown away after each launch. The U.S., however, continuously found itself trying to catch up to Soviet milestones, including that of launching the first man, Yuri Gagarin, into space in 1961. In response, the U.S. began the Mercury program which was intended to put an American into space in the quickest manner possible. Through multiple launches and trial-and-error research and development, the V-2 rocket evolved into the Redstone rocket capable of launching the first American, Alan Shepard, into space on a ballistic suborbital trajectory. This development thus spawned the Gemini program capable of launching Americans into orbital space using the Atlas and Titan rockets originally developed as nuclear missiles.
Pushing the Envelope
Also during this time high speed aircraft tests were continuously pushing the velocity envelope over the deserts of the American Southwest. Since practically no information was known about aerodynamic characteristics at hypersonic velocities (~ Mach 5+), NASA engineers found a need to develop a rocketed aircraft capable of high Mach velocities and high suborbital altitudes to gather that data. The resulting vehicle was the X-15 Hypersonic Research Aircraft, which was designed to be carried to a high launch altitude using a B-52 Stratofortress, at which point it would detach and rocket to a velocity over Mach 5 or to a suborbital altitude over 100 km. After achieving its objective the vehicle would then glide to a horizontal landing on a dry lakebed to be maintained and prepared for its next flight to conduct further NASA research. Nearly 200 flights were conducted using three X-15 aircraft over the course of a decade, the data from which would later be applied towards development of NASA's Space Shuttle.
The Apollo Solution

By the early 1960’s, aerospace technology had progressed to a point suitable for John F. Kennedy to establish the goal of landing a man on the Moon by the end of the decade. The program developed to oversee this goal was the famous Apollo Program in which NASA decided the best answer to the call required a new family of Saturn launch vehicles supplemented with specialized transfer, crew and lunar vehicles. Again, the rocket hardware and launch methods already known to work up to that point, along with their high cost and bureaucracy, were applied directly to the Apollo program. Kennedy backed up the endeavor with an enormous amount of funds, enabling the program to complete the task by 1969, ahead of Soviet accomplishments. Apollo became an impressive feat of complex engineering, however, its 100% hardware expendability combined with the high overhead costs of a government agency, essentially backed the U.S. space program into a financial dead end that it couldn’t easily escape.
Fluctuating Worldwide Circumstances
By 1972, the on-going Vietnam War continued to absorb valuable funds from the space program. The war, coupled with the high expendability of the Saturn V launch vehicle, as well as the lack of notable milestones completed by the Apollo program after landing on the Moon, were arguably responsible for the demise of the Apollo program and the U.S. ability to continue going to the Moon. Apollo was eventually cancelled altogether and the remaining Saturn V launch vehicles intended for lunar missions were then devoted to developing space station technology with Skylab.
The Space Shuttle Solution
During the 1970s a new approach to space transportation was proposed with NASA’s Space Shuttle program, which was predicted to be a highly affordable and multi-functional orbital space plane. The Shuttle was not only designed to bring 50,000 lbs of payload to orbit, but to also sustain life support for seven astronauts for at least two weeks, conduct science experiments and reconnaissance operations, as well as conduct in-orbit maintenance of space station components and satellites. In terms of sheer mission effectiveness, the Space Shuttle offers the broadest range of functionality ever built into a single spacecraft and is commonly thought to be the most complex feat of engineering ever undertaken by mankind. This multi-functional complexity however, arguably led to the Shuttle’s own demise. Its high development and operations cost as a result of that complexity, in addition to its high overhead costs and government bureaucracy behind the program, spiraled into a venture capable of only a few launches per year, requiring 10,000 employees to maintain the fleet and resulting in an average launch cost of $500 million per flight.
The Expendable Launch Vehicle Solution
During the 1990s, telecommunications companies announced plans to launch hundreds of new satellites which ushered in a greater demand for launch vehicle services. The chosen solution by major government contractors was to continue developing expendable launch vehicles to handle these new markets. Unfortunately, the high cost of these vehicles developed under the a government operating paradigm, ranging anywhere from $20-150 million per launch, put a chokehold on the growth of the satellite market.
A 60-Year Old Government Operating Paradigm

Over the course of its history, space transportation has been a venture dominated by the expensive operating model of the government and its contractors. Industry customers requiring access to the space environment currently put their payloads into space using expensive launch vehicles developed under a 60-year-old government paradigm characterized by high hardware expendability, high employee expenses and complex systems having multiple levels of redundancy. This paradigm is largely based on the assumption that the financial expenditures of national space organizations and contractors must somehow be a definitive measure for developing and operating space vehicles, thus requiring multi-billion dollar government subsidies. Since the vehicles developed under this paradigm are extremely expensive, many customers are left with only two options for accessing space: either cancel their proposed projects altogether or outsource their launch needs to cheaper launch services offered by foreign nations.
The central issue in the industry since its inception is that the space vehicles customers currently depend on for access to space are derived from and based on a government operating model, not a true commercial business model. The expensive government operating model is being used to deploy the infrastructure for the commercial business model, and the former is not conducive to the latter. The difference between the two is profound. Whereas the government model is motivated by a political, military and otherwise non-commercial agenda supported by taxpayer dollars, a commercial business model is motivated by and dependent on revenue and investor returns. With government funding being diverted to ever-changing worldwide circumstances, and the recent close NASA’s Space Shuttle program, the exciting vision once had by the spaceflight development of the 1960s has long since been forgotten. Since then, none of the government based solutions for space transportation have allowed humans to travel beyond Earth orbit. This means humans are now 40 years behind schedule in effective space transportation, altogether suggesting that the industry has remained in a state of paradigm paralysis, or the idea that what has been done in the past must be the only way. Space vehicles developed under a government operating model are simply ineffective in providing the affordable access to space that a growing number of customers demand in a technology driven economy. A new solution is required, with public and government focus shifting to private enterprise for the answer.
The Paradigm Is Changing
In the mid-1990’s, realizing the inability of the government paradigm to create routine, affordable access to space, the X-Prize Foundation announced the $10 million Ansari X-Prize for spaceflight. The idea behind the X-Prize was to motivate private ventures to assume the task of developing the means to reach space affordably by spawning innovation through competition. The requirements for the prize was to develop a privately funded space vehicle capable of carrying one pilot and the equivalent weight of two passengers to a 100 km suborbital altitude, twice within a two week period.
In October 2004, composite aircraft developer, Scaled Composites, made the first giant leap towards making the dream a reality for all by developing the world’s first privately funded suborbital space plane, SpaceShipOne, to meet the requirements of the X -
Prize. As a result of this success Scaled Composites overcame many of the barriers-to-entry inherent within spaceflight and demonstrated the feasibility of substantially lowering costs to the affordability realm of private citizens.
STAR Systems is currently hard at work seeking to expand upon this progress and pioneer a paradigm shift by lowering the costs of spaceflight even further with the Hermes spacecraft: a suborbital space shuttle for everyone, built on the premise that anyone should be able to travel into space without spending their life savings.