By Irene Klotz
CAPE CANAVERAL, Florida (Reuters) - The first privately owned passenger spaceship is on track for a test flight beyond the atmosphere this year, and nearly 500 people have signed up for rides.
Another company just closed on $5 million equity financing, enough to finish building a two-seater rocketplane called Lynx.
Both firms -- and a half-dozen more -- are looking at flying not just people, but experiments and payloads owned by research laboratories, businesses and educational institutes.
"There are fascinating businesses that may come that would be tremendously exciting," said Carissa Christensen, managing partner of the Tauri Group, which is working on a commercial space market study to be released in May. "There also are tremendous financial challenges, requiring enormous capital, and there are risks," she said.
So far, only seven people -- including one who flew twice -- have paid their own way to fly in space. The combination of pre-flight training, round-trip travel on a Russian Soyuz rocket and about 10 days aboard the International Space Station, cost them between $20 million and $35 million each.
Supporters of the nascent commercial spaceflight industry say that is about to change. Besides attracting thrill seekers with deep pockets, they figure the long-term ramifications of routine, reliable, low-cost access to space will spawn a host of new economic opportunities, just as development of the silicon chip did in the 1980s.
"I really believe that this is the engine that's going to finally break the logjam that has kept us wondering why more interesting things aren't happening in space," said Jeff Greason, president and co-founder of XCOR Aerospace, developer of the Lynx rocketplane.
"It's broader than just science activity. The payloads -- experiments of one kind or another -- are going to be a very large part of the traffic model."
Potential customers for spaceflight go far beyond joy-riders, researchers and educational projects. For example, early efforts to commercialize Russia's Mir space station caught the eye of reality television show producer Mark Burnett, who wanted to send the winner of a game show blasting off into space. Mir was taken out of service in 2001.
The adult entertainment industry has also expressed interest. Virgin Galactic says it turned down a $1 million proposal for a "sex-in-space" movie.
When the Texas-based Southwest Research Institute shopped for space flights in 2010 to send researchers and experiments on short rides beyond the atmosphere, it considered services offered by five companies.
The independent non-profit organization ended up signing contracts for eight rides aboard Virgin Galactic's SpaceShipTwo and six flights on XCOR Aerospace's Lynx. Both spaceships are under development in Mojave, California.
Rides on the six-passenger, two-pilot SpaceShipTwo sell for $200,000. Travel on the two-person Lynx -- one passenger, one pilot -- is priced at $95,000 per flight.
The suborbital flights reach an altitude of at least 62 miles, which provides a few minutes of microgravity and a view of Earth juxtaposed against the black sky of space.
The rides will be similar to the space hops by NASA Mercury astronauts Alan Shepard and Virgil "Gus" Grissom in May and July 1961 respectively. They also will be similar to ones the privately funded experimental SpaceShipOne vehicle made in 2004.
SpaceShipOne, which won the $10 million Ansari X Prize for the first privately funded manned spaceflights, served as the prototype for a fleet of commercial spaceships for Virgin Galactic, which is owned by British billionaire Richard Branson's Virgin Group.
SpaceShipTwo is expected to make its first test flight beyond the atmosphere this year. The company has taken almost 500 reservations for flights, which could begin in 2013.
The budding commercial spaceflight industry also is getting a lift from NASA, which last year hired seven companies to fly suborbital science experiments. In addition to Virgin Galactic and XCOR Aerospace, the firms are Armadillo Aerospace of Heath, Texas; Masten Space Systems of Mojave, California, Near Space Corp, of Tillamook, Oregon; UP Aerospace of Highlands Ranch, Colorado, and Whittinghill Aerospace, of Camarillo, California. Combined, the two-year contacts are worth $10 million.
The NASA program is "going to be a big kick-start for this industry," Neil Milburn, vice president of program management at Armadillo Aerospace, said last month at the 2012 Next-Generation Suborbital Researchers conference in Palo Alto, California.
The contracts are in addition to NASA investments in orbital spaceflight transportation services, a program focused on developing a U.S. alternative to flying astronauts to the International Space Station.
With last year's retirement of the space shuttles, the United States depends on Russia to taxi crews to and from the $100 billion outpost, which flies about 240 miles above the planet. The service costs about $60 million per person.
"The way some perceive this industry is that it's about flying rich playboys into space. That is a lie," said Greason at XCOR Aerospace, which secured $5 million in equity financing, enough to produce the first operational Lynx rocketplane.
"We have ideas about what we do with routine and reliable access to space, with making space a research tool that's available to engineers and scientists. But whatever our ideas are today, in 10 years they are going to look very antiquated, he said."
There are still plenty of skeptics. Space policy analyst John Pike, director of Washington-based GlobalSecurity.org, used to be a believer, but he is not any more. "The space business is absolutely the most risky business there ever was," he said.
Pike believes the success of the electronics industry cannot be replicated in space because of the sheer power needed to pierce Earth's gravity well. "There's been no significant improvement in the last 50 years in how many pounds of thrust a pound of propellant can produce," he said.
"When I was a kid, I believed all that 'To boldly go ...' stuff. I thought we were uniquely positioned to be the multi-planet species. I think this whole space thing turned out to be a technological sideshow."
Give it five years, said planetary scientist Alan Stern, a former NASA associate administrator who now doubles as vice president for Southwest Research Institute and as director of the University of Central Florida Space Institute. That's about how much time he thinks will be needed between the start of commercial space operations and being able to gauge how big the education and research market might be, not to mention tourism.
"There is a huge appetite for routine affordable space access. It's not just the United States. It's all the countries who have not been able to get involved in space because the prices were just too astronomical," Stern said.
(Editing By David Adams, Tom Brown and Christopher Wilson)