United States Government Accountability Office

GAO Report to the Ranking Democratic 

Member, Committee on Transportation 

and Infrastructure, House of 

Representatives 

COMMERCIAL 

SPACE LAUNCHES 

FAA Needs Continued 

Planning and 

Monitoring to Oversee 

the Safety of the 

Emerging Space 

Tourism Industry 

October 2006 

 

GAO-07-16 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2006

COMMERCIAL SPACE LAUNCHES

FAA Needs Continued Planning and 

Monitoring to Oversee the Safety of the 

Emerging Space Tourism Industry 

Highlights of GAO-07-16, a report to the 

Ranking Democratic Member, Committee 

on Transportation and Infrastructure, 

House of Representatives

Several measures indicate that FAA has provided a reasonable level of safety

oversight for commercial launches. For example, none of the 179 

commercial launches that FAA licensed over the past 17 years resulted in 

fatalities, serious injuries, or significant property damage. However, FAA 

shared safety oversight with the Department of Defense (DOD) for most of 

these launches because they took place at federal launch sites operated by 

DOD. In addition, FAA’s licensing activities incorporate a system safety

process, which GAO recognizes as effective in identifying and mitigating

risks. GAO’s analysis of FAA records indicates that the agency is

appropriately applying management controls in its licensing activities, 

thereby helping to ensure that the licensees meet FAA’s safety requirements.

In response to emerging issues in the commercial space launch industry, 

such as the potential development of space tourism, FAA has developed

safety regulations and training for agency employees. The industry has 

raised concerns about the costs of complying with regulations and about the 

flexibility of the regulations to accommodate launch differences. However, 

FAA believes it has minimized compliance costs by basing its regulations on 

common safety standards and has allowed for flexibility by taking a case-bycase approach to licensing and by providing waivers in certain 

circumstances. 

FAA faces several challenges and competitive issues in regulating and 

promoting space tourism. For example, FAA expects to need more 

experienced staff for safety oversight as new technologies for space tourism 

evolve, but has not estimated its future resource needs. Other challenges for 

FAA include determining the specific circumstances under which it would 

regulate space flight crew and passenger safety before 2012 and balancing its 

responsibilities for safety and promotion to avoid conflicts. Recognizing the 

potential conflict in the oversight of commercial space launches, Congress

required the Department of Transportation (DOT) to commission a report by 

December 2008 on several issues, including whether the promotion of 

human space flight should be separate from the regulation of such activity. 

In addition, U.S. commercial space launch industry representatives said that

they face competitive issues concerning high launch costs and export 

controls that can affect their ability to sell services overseas. The federal 

government has provided support to the industry to help lower launch costs.

Source: Scaled Composites.

SpaceShipOne

In 2004, the successful launches of

SpaceShipOne raised the 

possibility of an emerging U.S. 

commercial space tourism industry 

that would make human space 

travel available to the public. The

Federal Aviation Administration

(FAA), which has responsibility for 

safety and industry promotion, 

licenses operations of commercial

space launches and launch sites. To 

allow the industry to grow, 

Congress prohibited FAA from 

regulating crew and passenger 

safety before 2012, except in 

response to high-risk events. GAO

evaluated FAA’s (1) safety 

oversight of commercial space 

launches, (2) response to emerging

issues, and (3) challenges in

regulating and promoting space 

tourism and responding to 

competitive issues affecting the

industry. GAO reviewed FAA’s 

applicable safety oversight 

processes and interviewed federal 

and industry officials. 

What GAO Recommends

If DOT’s commissioned report on 

dual safety and promotion roles 

does not fully address the potential 

for a conflict of interest, GAO 

suggests that Congress revisit 

FAA’s promotional role and decide

whether it should be eliminated. 

GAO recommends that FAA assess 

its future safety oversight resource

needs and identify the 

circumstances that would trigger 

passenger safety regulation before

2012. Relevant federal agencies

reviewed the draft and DOT agreed

with the recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-07-16.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald L. 

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 
Contents 

Letter 1

Results in Brief 4 

Background 7

FAA Has Met Its Safety Performance Goal While Using a System 

Safety Process and Management Controls 16 

FAA Has Developed Regulations and Training to Respond to 

Emerging Issues 19 

FAA Faces Challenges in Fulfilling Its Responsibilities for 

Regulating the Emerging Space Tourism Sector 22 

To Help Address Key Competitive Issues Facing the Industry, the 

U.S. Government Has Played an Important Role 32 

Conclusions 39

Matter for Congressional Consideration 40 

Recommendations for Executive Action 40 

Agency Comments and Our Evaluation 41 

Appendix I Objective, Scope, and Methodology 43 

Appendix II Economic Impact of the Commercial Space Industry 49 

Appendix III FAA’s Launch and Reentry Licensing Process 52 

Appendix IV Timeline and List of FAA Commercial Space Launch 

Rulemaking and Guidance 54 

Appendix V Comments from the Department of Commerce 56 

Appendix VI Comments from the National Aeronautics and Space 

Administration 60 

Page i GAO-07-16 Commercial Space Launches
Appendix VII GAO Contact and Staff Acknowledgments 62 

Tables 

Table 1: Comparison of Expendable and Reusable Launch Vehicles 

for Commercial Launches 25 

Table 2: Examples of Federal Support to the Commercial Space 

Launch Industry 36 

Table 3: Experts Providing Input on GAO’s Review 45 

Table 4: List of Organizations That GAO Interviewed 46 

Figures 

Figure 1: Worldwide Commercial Orbital Launches, 1997-2005 8 

Figure 2: Examples of Expendable and Reusable Launch Vehicles 9 

Figure 3: Federal Launch Sites and Existing and Proposed 

Spaceports in the United States, as of August 2006 11 

Figure 4: Federal Agencies’ Roles and Responsibilities in the 

Commercial Space Launch Industry 15 

Figure 5: Examples of Vertical Federal Launch Sites and Horizontal 

Spaceports 27

Figure 6: FAA’s and Department of Commerce’s Statutory 

Promotional Responsibilities 32 

Figure 7: Commercial Space-Related Industries 49 

Figure 8: Distribution of Economic Activity Impacts Resulting from 

Commercial Space Transportation and Enabled 

Industries, 2004 51 

Figure 9: FAA’s Launch Licensing Process 52 

Page ii GAO-07-16 Commercial Space Launches
Abbreviations 

DARPA Defense Advanced Research Projects Agency 

DHS Department of Homeland Security 

DOD Department of Defense 

DOT Department of Transportation 

FAA Federal Aviation Administration 

MPL maximum probable loss 

NASA National Aeronautics and Space Administration

NSC National Security Council

OSTP Office of Science and Technology Policy 

TSA Transportation Security Administration 

USTR Office of the U.S. Trade Representative 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page iii GAO-07-16 Commercial Space Launches
United States Government Accountability Office

Washington, DC 20548 

October 20, 2006 

The Honorable James L. Oberstar 

Ranking Democratic Member 

Committee on Transportation and Infrastructure 

House of Representatives 

Dear Mr. Oberstar: 

In 2004, the successful launches of SpaceShipOne raised the possibility of 

an emerging commercial space tourism industry that would make human 

space travel available to the public for the first time. Previously, human 

space travel in the United States was limited to the National Aeronautics 

and Space Administration’s (NASA) flights. SpaceShipOne is a reusable 

launch vehicle1

 that resembles an airplane. It was launched from an 

airplane into space, where it traveled nearly 70 miles above the earth (an 

altitude known as suborbital space), and returned to the original launch 

site. Designed to carry two crew members and one passenger, 

SpaceShipOne is the first commercial reusable launch vehicle licensed by

the Federal Aviation Administration (FAA). Several companies in addition

to SpaceShipOne’s designer, Scaled Composites, LLC, are developing 

reusable launch vehicles for commercial space tourism and plan to start 

operations within the next few years. Historically, commercial space 

launches carried payloads, generally satellites, into orbit using expendable 

launch vehicles2

 that did not return to earth. 

In 2004, the U.S. commercial space launch industry accounted for $1.7 

billion in economic impact, according to FAA.3

 At that time, the industry 

consisted of a few FAA-licensed launch companies that operated primarily 

from Department of the Air Force launch sites. Currently, the industry 

appears to be expanding—more firms are applying to FAA for launch 

 1

A reusable launch vehicle is one that is capable of being launched into space more than

once. 

2

An expendable launch vehicle, which looks like a rocket, is an unmanned, single-use

vehicle that is usually used to launch a payload into space. 

3

FAA defines “economic impact” as increases in revenues, earnings, and jobs that affect the

national economy and occur as a result of the demand for commercial space launch

products and services. 

Page 1 GAO-07-16 Commercial Space Launches
licenses, and several commercial spaceports are being planned.4

 One space

tourism company, Virgin Galactic, which intends to start operations in 

2009 and to initially charge $200,000 per passenger, plans to carry 3,000 

passengers over the subsequent 5 years on space flights, with 100 

individuals having already paid the full fare. In addition, the U.S. 

commercial space launch industry faces strong competition from 

international companies, primarily from Russia and Europe, offering 

satellite launches on expendable launch vehicles. Russia is also the only 

nation that has commercially launched humans into space, with four 

individuals having paid an estimated $20 million each for orbital space 

flights. 

The federal government regulates and supports the commercial space 

launch industry to varying degrees. In 1984, the Commercial Space Launch 

Act gave the Department of Transportation (DOT) the authority to license

and monitor the safety of commercial space launches and to promote the 

industry. In 2004, the Commercial Space Launch Amendments Act gave 

FAA the specific responsibility of overseeing the safety of space tourism, 

but the act prohibits FAA from regulating crew and passenger safety 

before 2012, except in response to high-risk incidents, serious injuries, or 

fatalities. The Department of Defense (DOD), through the Air Force, 

provides infrastructure, operations support, and safety oversight for 

government and commercial launches at its launch sites. The Department 

of Commerce (Commerce) is also responsible for promoting the 

commercial space industry. 

This report discusses the federal role in commercial space launches and 

the government’s response to emerging industry trends—both 

domestically and internationally. In this review, we addressed the 

following questions: 

• How well does FAA oversee the safety of commercial space launches? 

• To what extent is FAA responding to key emerging issues in the 

commercial space launch industry? 

• What challenges does FAA face in regulating and promoting the 

commercial space launch industry? 

 4

A spaceport is a site that is used for launching spacecraft. 

Page 2 GAO-07-16 Commercial Space Launches
• What are the key competitive issues affecting the U.S. commercial space 

launch industry, and to what extent are the industry and government 

responding to them? 

To determine how well FAA is overseeing the safety of commercial space 

launches, we reviewed the agency’s safety oversight processes, including 

the documentation of its licensing and safety monitoring processes, 

internal guidance and policies, applicable regulations, and memoranda of 

agreement with other federal agencies. We also reviewed FAA’s use of 

system safety procedures5

 and interviewed industry experts and FAA 

officials. Because FAA relies on the Air Force to conduct safety oversight 

at the Air Force’s two primary launch sites in Florida and California, we 

reviewed Air Force launch safety requirements and interviewed FAA and 

Air Force officials about their respective responsibilities and interaction. 

In addition, we examined FAA’s application of certain management 

controls in its licensing and monitoring processes using our guidelines for 

management controls at federal agencies, such as documentation and 

timeliness of the review process and communication and consultation 

with relevant federal agencies.6

 To determine the extent to which FAA is 

responding to key emerging issues in the commercial space launch 

industry, such as space tourism, we identified these issues through 

literature reviews and assessed the extent of FAA’s response through 

interviews with federal government officials and industry representatives.

These industry representatives were from associations that represent the 

commercial space launch industry and from entities that had received 

launch or launch-site licenses from FAA or were consulting with FAA 

about receiving such licenses as of September 2005. We also interviewed 

these officials and representatives to identify the challenges FAA faces in 

regulating and promoting the commercial space launch industry. To 

determine the key competitive issues affecting the U.S commercial space 

launch industry and the extent to which the industry and the federal 

government are responding to them, we conducted a literature review that 

included applicable laws affecting industry competitiveness and 

interviewed agency officials, industry representatives, and industry 

 5

System safety is the application of engineering and management principles, criteria, and 

techniques to optimize safety by the identification of safety-related risks and then the

control or elimination of these risks by design and procedures, on the basis of acceptable 

system safety precedents. 

6

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: Aug. 1, 2001); and Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

Page 3 GAO-07-16 Commercial Space Launches
experts to obtain their views. We conducted our review from August 2005 

through October 2006 in accordance with generally accepted government 

auditing standards. Appendix I contains additional information about our 

objective, scope, and methodology. 

Several measures indicate that FAA has provided a reasonable level of 

safety oversight for expendable launch vehicles, including the industry’s 

launch safety record and FAA’s safety licensing process and use of 

management controls in its license application reviews. FAA has licensed

179 commercial launches over the past 17 years that have resulted in no 

fatalities, serious injuries, or significant property damage. However, the 

Air Force’s oversight for launches from its launch sites has contributed to 

this achievement. From March 1989 to August 2006, FAA exercised sole 

safety oversight for 27 of the 179 commercial launches. Of the remaining 

152 launches, other entities, primarily the Air Force, provided on-site 

safety oversight of launches from their launch sites. In addition, FAA’s 

licensing activities use a system safety process, which we recognize as an

effective evaluative method of identifying and mitigating risks. 

Furthermore, our analysis of FAA records indicated that the agency is 

appropriately applying management controls, such as timely reviews and 

verification of data, in its licensing of commercial launches and launch 

sites, thereby helping to ensure that the licensees satisfy FAA’s safety 

requirements. 

FAA is responding to emerging issues in the U.S. commercial space launch 

industry, such as the development of space tourism at spaceports, by 

issuing safety regulations and has developed training for agency 

employees to use in overseeing the safety of these launches. However, 

some industry representatives expressed concern about (1) the costs of 

complying with both FAA’s regulations and the Air Force’s existing 

requirements at federal launch sites and (2) the flexibility the regulations 

would afford to accommodate special launch circumstances. According to 

FAA, it has minimized the costs of compliance by basing its regulations on

common safety standards that it shares with the Air Force, and it has 

allowed for flexibility by taking a case-by-case approach to licensing and 

by providing waivers in certain circumstances. 

FAA faces several challenges in regulating and promoting an emerging 

sector of the U.S. commercial space launch industry—space tourism from 

spaceports—that could affect its safety oversight of the evolving industry. 

First, FAA faces the challenge of providing a sufficient number of 

personnel with the experience and training needed to evaluate and 

Results in Brief 

Page 4 GAO-07-16 Commercial Space Launches
oversee the safety of an uncertain but potentially escalating number of 

space tourism launches. FAA’s experience with such launches is limited 

because just five have taken place and all have used the same launch 

vehicle—SpaceShipOne. At the same time, a wide variety of launch 

vehicles and technologies are being designed, and FAA is expecting its 

workload to increase. FAA has not estimated the level of resources needed

to oversee this developing sector of the industry and has indicated that it 

will not do so until the industry further develops. Second, FAA faces the 

challenge of ensuring that its regulations for operations of launch vehicles

and launch sites are suitable not only for operations at federal launch sites

but also for spaceports. FAA’s regulations are based on common safety 

standards developed by FAA and the Air Force, primarily on the basis of 

the Air Force’s range safety requirements for expendable launch vehicle 

operations from federal launch sites. Third, FAA faces the challenge of 

determining the circumstances under which it would regulate the safety of

crew and space flight participants before 2012. Congress prohibited FAA 

from regulating crew and space flight participant safety before 2012, 

except in response to high-risk incidents, serious injuries, or fatalities, to 

allow the industry to grow and innovate; therefore, FAA has not developed 

criteria for those circumstances. Finally, FAA faces the challenge of 

balancing its responsibilities for safety and promotion and distinguishing 

its promotion role from that of Commerce, which is also mandated to 

promote the commercial space industry. According to some experts, 

FAA’s safety oversight and promotional responsibilities do not conflict 

because its promotional activities are centered on providing a safe 

industry. However, according to other experts, FAA’s dual role may create 

a potential conflict of interest as space tourism develops, particularly in 

FAA’s determination of whether or when to regulate crew and flight 

participant safety. Recognizing the potential conflict in the oversight of 

commercial space launches, Congress required DOT to commission an 

independent study by December 2008 on whether the promotion of human 

space flight should be separate from the regulation of such activity. In 

addition, some of FAA’s promotional activities, such as publishing 

economic impact studies on the industry, have the potential of overlapping 

with those of Commerce.

The U.S. commercial space launch industry faces key competitive issues 

concerning high launch costs and U.S. export controls. Space launches 

incur high costs for launch vehicle development and for launch facility 

operations and maintenance. The government has helped to lower these 

costs by investing in the design and development of vehicles for its use, 

making its launch infrastructure available for commercial launches when 

space is available, and providing business opportunities to companies for 

Page 5 GAO-07-16 Commercial Space Launches
launches of national defense and scientific payloads. The government also 

provides indemnification7

 for commercial launches and has attempted to 

reduce costs to the industry by streamlining the licensing of commercial 

launches through FAA’s and the Air Force’s development of common 

safety standards and acceptance of each other’s waivers of specific 

licensing requirements. In addition, industry representatives that we 

interviewed said that they would like fewer items to be regulated by 

export controls or a streamlining of the process for obtaining 

authorization to export these items to improve the U.S. industry’s 

competitive position. Export controls are in place to ensure that sales and 

leases of controlled U.S. technologies are consistent with U.S. national 

security and foreign policy interests. Although we have not examined the 

issue of which specific items should be subject to export controls, we have 

examined the export control system and have recommended ways to 

improve its overall efficiency.8

We suggest that, if DOT’s 2008 report on the dual safety and promotion 

roles does not fully address the potential for a conflict of interest, 

Congress consider revisiting FAA’s promotional role and decide whether 

to eliminate it to alleviate a potential conflict of interest. For FAA to be 

prepared for a potential increase in space tourism launches, we are 

recommending that FAA plan for the level of resources and expertise 

needed to assume its additional responsibilities for overseeing the safety 

of reusable launch vehicle operations at spaceports. In addition, we are 

recommending that FAA develop and issue guidance on the circumstances 

under which it would regulate crew and flight participant safety before 

2012. Furthermore, to distinguish between FAA’s and Commerce’s 

promotional responsibilities, we are recommending that FAA develop a 

memorandum of understanding with Commerce. We provided a draft of 

this report to the Departments of Transportation, Defense, Commerce, 

State, and Homeland Security (DHS); NASA; the White House Office of 

 7

“Indemnification” is catastrophic loss protection in the event of a launch accident. Subject 

to congressional appropriations, the U.S. government may pay successful third-party

liability claims in excess of required “maximum probable loss” (MPL)-based insurance up

to $1.5 billion above the amount of the MPL-based insurance. MPL-based insurance is 

launch insurance that the commercial space launch provider is required to obtain as part of

its license. 

8

GAO, Defense Trade: Arms Export Controls Vulnerabilities and Inefficiencies in the 

Post-9/11 Security Environment, GAO-05-468R (Washington, D.C.: Apr. 7, 2005); and

Export Controls: Reengineering Business Processes Can Improve Efficiency of State 

Department License Reviews, GAO-02-203 (Washington, D.C.: Dec. 31, 2001).

Page 6 GAO-07-16 Commercial Space Launches
Science and Technology Policy; and the Office of the U.S. Trade 

Representative. State, Defense, and DHS had no comments and the other 

agencies provided technical comments, and generally agreed with the facts 

presented in the report. They provided technical corrections and 

clarifications, which we incorporated as appropriate. DOT and Commerce 

agreed with the report’s recommendations. 

There are three main types of space launches—national security, civil, and 

commercial. National security launches are by DOD for defense purposes, 

and civil launches are by NASA for scientific and exploratory purposes. 

Many commercial launches are internationally competed and carry 

payloads, such as satellites, that generate revenue. In 1984, the 

Commercial Space Launch Act required the Secretary of Transportation to 

“encourage, facilitate, and promote commercial space launches by the 

private sector.” At that time, the U.S. government was the sole entity 

launching civil and commercial payloads into orbit from the United States. 

However, as a result of the Space Shuttle Challenger accident in January

1986, the U.S. government transferred responsibilities for commercial 

payload launches to the private sector. Space launches by private sector

companies grew as U.S. commercial launch companies responded to the 

increase in global demand for commercial satellite launch services in the 

mid-1990s. Nonetheless, following a downturn at the beginning of this 

century in the business of the commercial space launch industry’s primary 

commercial customer, the telecommunications services industry, the 

demand for commercial space launches has generally declined. As shown 

in figure 1, the total number of U.S. and worldwide commercial orbital 

launches has declined from a peak of 41 launches in 1998. 

Background 

Page 7 GAO-07-16 Commercial Space Launches
Figure 1: Worldwide Commercial Orbital Launches, 1997-2005 

Note: These launches used expendable launch vehicles, which are designed to be launched once, to

deliver satellites into orbit. Launches are grouped by the country in which the primary vehicle is

manufactured. Exceptions to this are launches by Sea Launch Company, LLC, which is designated 

as multinational and launches from international waters. Sea Launch, whose partners include Boeing 

Commercial Space Company of the United States, S.P. Korolev Rocket and Space Corporation 

Energia of Russia, Kvaerner of Norway, and SKO Yuzhnoye/PO Yuzhmash of Ukraine, is required to

have an FAA license because Boeing, a U.S. company, has a controlling interest in the company.

The U.S. commercial space launch industry, comprising a few launch 

companies, has historically used federal sites to launch satellites using 

expendable vehicles, which are designed to be launched once. According 

to FAA, the launch vehicle manufacturing and services sector of the 

commercial space industry had $1.7 billion in economic impact on the U.S. 

economy for 2004, with the greatest economic impacts to enabling 

0

10

20

30

40

50

1997 1998 1999 2000 2001 2002 2003 2004 2005

Number of commercial orbital launches

Year

China

Russia

Multinational

Europe

United States

Source: GAO analysis of FAA data.

Page 8 GAO-07-16 Commercial Space Launches
industry sectors such as satellite manufacturing and services.9

 (See app. II 

for more information on the industry and its economic impact.) 

The commercial space launch industry is changing with the emergence of

suborbital reusable launch vehicles that enable space tourism from statesponsored or private launch sites, known as spaceports. (See fig. 2 for 

examples of expendable and reusable launch vehicles.) 

Figure 2: Examples of Expendable and Reusable Launch Vehicles

Xerus

SpaceShipOne

Rocketplane XP

QuickReach

Pegasus

Atlas Falcon I Zenit 3SL V

Expendable Launch Vehicles Reusable Launch Vehicles

Source: FAA.

Delta IV Neptune

Note: Falcon I is partially reusable because its first stage is designed to be recovered and reused. 

The prospect for commercial space tourism materialized in 2004 when 

SpaceShipOne, developed by Scaled Composites, flew to space twice, 

 9

Other sectors of the commercial space industry include satellite services and ground 

equipment manufacturing. 

Page 9 GAO-07-16 Commercial Space Launches
achieving a peak altitude of about 70 miles to win the Ansari X Prize.10

Several entrepreneurial launch companies are planning to start taking 

paying passengers, also known as space flight participants, on suborbital 

flights within the next few years. Virgin Galactic intends to enter 

commercial suborbital space flight service around 2009, launching from a 

spaceport in New Mexico, and according to the company, plans to carry 

3,000 passengers over the subsequent 5 years, with 100 individuals having

already paid the full fare of $200,000. In addition, 4 individuals have 

already paid an estimated $20 million each for space flights to the 

International Space Station on a Russian vehicle that launches from 

Kazakhstan. According to a Futron Corporation market study on space 

tourism, the orbital and suborbital space tourism market could attract up 

to 15,000 passengers and generate revenues in excess of $1 billion per year 

by 2021, with suborbital space tourism likely generating the most 

demand.11 Several other companies in the United States and elsewhere, 

including former Ansari X Prize competitors, continue to develop their 

vehicles for space tourism. For example, Russia is developing a reusable 

launch vehicle, Cosmopolis 21, for space tourism flights. 

Spaceports are being developed to accommodate anticipated commercial 

space tourism flights and are expanding the nation’s launch capacity. As of 

August 2006, the United States had five federal launch sites, six spaceports

with an FAA launch site operator’s license, and an additional eight 

spaceports have been proposed (see fig. 3). Although their individual 

capabilities and level of infrastructure development vary, these facilities 

may house launch pads and runways as well as the buildings, equipment, 

and fuels needed to prepare vehicles and payloads before launch. The 

spaceports are operated by state or local governments and authorities and 

by private entities. These spaceports also face competition from abroad. 

Space Adventures, a U.S.-based space tourism broker, in partnership with 

other investors, plans to develop a $115 million spaceport near Changi 

 10The X PRIZE Foundation was established in 1995 to award $10 million to the first team to 

launch a suborbital, reusable launch vehicle capable of carrying three people to an altitude

of 70 miles, return safely to earth, and repeat the exercise within 2 weeks using the same 

vehicle. Twenty-seven teams from seven countries competed. 

11Futron Corporation, Space Tourism Market Study: Orbital Space Travel and

Destinations with Suborbital Space Travel (Bethesda, Md.: October 2002). Revenue 

information is based on a survey of 450 individuals with annual incomes of at least $250,000

or a net worth of at least $1 million, who were questioned about their interest in taking a 

space flight. 

Page 10 GAO-07-16 Commercial Space Launches
Airport in Singapore and a $265 million spaceport in Ras Al-Khaimah near

Dubai in the United Arab Emirates. 

Figure 3: Federal Launch Sites and Existing and Proposed Spaceports in the United States, as of August 2006 

Federal Agencies’ Roles 

and Responsibilities in the 

Commercial Space Launch 

Industry 

Several federal agencies regulate and support the commercial space 

launch industry. FAA oversees the safety of all commercial launches—

both expendable and reusable launch vehicles from federal launch sites 

and spaceports—through its licensing, compliance monitoring, and safety

inspection activities.12 FAA licenses launches to ensure the health and 

 12FAA issues four types of licenses: a launch license (for expendable launch vehicles), a 

reusable launch vehicle mission license, a reentry license, and a launch or reentry site 

operator license. The first three types of licenses are issued to the operator of a launch 

vehicle, and the fourth is issued to the operator of a spaceport. Licenses for vehicle 

operations are granted for one launch or reentry, a series of launches or reentries, or a

period of time. 

Page 11 GAO-07-16 Commercial Space Launches
safety of the public and the safety of property. The agency licenses all 

commercial launches that take place in the United States. In addition, it 

licenses all overseas launches by U.S. citizens or companies. FAA 

generally does not license launches by the U.S. government, nor does it 

license the operation of federal launch sites.13 In issuing launch and 

launch-site operator licenses, FAA does not certify the launch vehicle as

safe; in contrast, FAA’s Office of Aviation Safety provides initial 

certification of aircraft and periodically inspects an aircraft and certifies it

as safe to fly. FAA can also issue experimental permits for launches of 

reusable vehicles conducted for research and development, for 

demonstrations of compliance with licensing requirements, or for crew 

training before obtaining a license. During commercial launches, FAA 

aerospace engineers are on-site to monitor licensees’ compliance with 

license and permit requirements. For 179 commercial launches conducted 

between March 1989 and August 2006, FAA has issued licenses for 63 

launch vehicles and six spaceports. In addition, FAA has issued one 

experimental permit for a suborbital reusable vehicle. (See app. III for 

more information about FAA’s launch licensing process.) Furthermore, 

FAA is responsible for promoting the industry, which the agency said it 

accomplishes by sponsoring an annual industry forecast conference, 

publishing industry studies, and conducting outreach to potential launch 

companies. FAA also consults with industry through its advisory 

committee, the Commercial Space Transportation Advisory Committee, 

which provides advice and recommendations to the FAA Administrator. 

This advisory committee has working groups comprising industry 

representatives who consult on reusable launch vehicle development and 

launch operations and support, among other commercial space subjects. 

Other federal agencies support the commercial space launch industry to 

varying degrees. DOD provides guidance and safety oversight for 

government and commercial launches at federal launch sites. The Air 

Force also operates the government’s two primary commercial launch

sites—Cape Canaveral Air Force Station in Florida and Vandenberg Air 

Force Base in California—and provides infrastructure and operations 

support. In addition, the Department of the Army operates a launch site at 

the White Sands Missile Range in New Mexico and at the Ronald Reagan 

Ballistic Missile Test Site in the Marshall Islands. Commercial launches at 

federal launch sites occur when “excess capacity” is available and the 

 13FAA does license launches for the U.S. government if the launch has been procured

commercially.

Page 12 GAO-07-16 Commercial Space Launches
launch company reimburses DOD for the direct use of government 

services.14 Three U.S. companies—Boeing, Lockheed Martin, and Orbital 

Sciences—have been the primary commercial users of DOD launch 

facilities. In support of its mission to have assured access to space, DOD 

also has supported the industry through investments in the design and 

development of small, medium, and heavy lift launch vehicles, which have

been used for both government and commercial launches.15

Under the Technology Administration Act of 1998, Commerce is to serve 

as an advocate for the commercial space industry. Its Office of Space

Commercialization, established in 1988 within the Office of the Secretary

of Commerce and now located within the National Oceanic and 

Atmospheric Administration, is responsible for promoting commercial 

investment in the industry by, among many activities, collecting and 

disseminating information on space markets; conducting workshops on 

commercial space opportunities; promoting space-related exports; and 

seeking the removal of legal, policy, and institutional impediments to 

space activities. Commerce’s International Trade Administration also 

promotes the commercial space industry in matters concerning 

international trade through such activities as trade events, advocacy 

programs, and the development of policies to further U.S. industry 

competitiveness. In addition, Commerce regulates export of space 

technologies that are considered dual-use items—that is, items with 

military and civilian uses—and is a customer of satellite launches. 

NASA’s support for the commercial space launch industry includes 

(1) providing infrastructure and range support from its Wallops Flight 

Facility in Virginia and radar support for commercial launches from DOD 

launch sites16 and (2) encouraging private sector investment in NASA 

launches and other activities. Since the 1985 National Aeronautics and 

Space Administration Authorization Act, Congress has required NASA to 

“seek and encourage, to the maximum extent possible, the fullest 

commercial use of space.” In January 2004, the President announced the

 14Reimbursable services include the direct use of DOD facilities, security personnel, and 

radar support. 

15Launch vehicles are defined by the weight of the payload that the vehicle can carry to

orbit. 

16NASA provides tracking and telemetry support for commercial launches out of the 

Wallops Flight Facility in Virginia, Kennedy Space Center in Florida, Kodiak Launch

Complex in Alaska, and Vandenberg Air Force Base in California. 

Page 13 GAO-07-16 Commercial Space Launches
Vision for U.S. Space Exploration, which directed NASA to pursue 

commercial opportunities for providing transportation and other services 

supporting the International Space Station and exploration missions 

beyond low-Earth orbit.17 Congress supported this direction in the NASA 

Authorization Act of 2005 by requiring NASA to develop a 

commercialization plan that (1) identifies opportunities for the private 

sector to participate in NASA missions and activities in space and (2) 

emphasizes the use of advancements made by the private sector in 

developing launch vehicles.18 One such opportunity is NASA’s Commercial 

Orbital Transportation Services demonstration program, for which NASA 

solicited proposals from private industry in March 2006 to demonstrate 

cargo and crew space transportation to low-Earth orbit and awarded two 

contracts in August 2006.

Other federal agencies support commercial launches in various ways. 

DHS’s Transportation Security Administration (TSA) is responsible for 

security policy, compliance, and related issues for commercial space 

transportation. TSA also is responsible for establishing national standards 

for transportation and infrastructure security for commercial space 

transportation. The Department of State ensures that domestic space 

policies support U.S. foreign policy objectives and international 

commitments. State also regulates the export of space technology and

represents the United States on the United Nations Committee on the

Peaceful Uses of Outer Space. The White House Office of Science and 

Technology Policy (OSTP) and the National Security Council (NSC) 

develop and manage commercial space launch policymaking by mediating 

among federal agencies and reporting to the President on space policy

issues, among other duties. The Office of the U.S. Trade Representative 

(USTR) negotiates and monitors commercial space launch industry trade 

agreements as needed. (See fig. 4 for a summary of federal agencies’ roles

and responsibilities.) 

 17Low-Earth orbit is an orbit around the Earth broadly defined as between 124 and 726 

miles above the Earth’s surface. 

18National Aeronautics and Space Administration Authorization Act of 2005, Pub. L. No.

109-155 (Dec. 30, 2005). 

Page 14 GAO-07-16 Commercial Space Launches
Figure 4: Federal Agencies’ Roles and Responsibilities in the Commercial Space Launch Industry 

Agency Description of Roles and Responsibilities

USTR • Negotiates and monitors commercial space launch industry trade agreements

OSTP • Develops and manages commercial space launch policymaking among federal agencies

NSC

• Provides infrastructure and range support at its launch site at the Wallops Flight Facility

• Provides tracking and telemetry support for commercial launches from NASA and DOD launch sites

• Provides technical expertise to commercial launch companies on a cost-reimbursable or mutually beneficial 

basis

• Leases rocket propulsion test facilities to commercial space launch companies

• Provides business opportunities through prize competitions

• Is a customer for launches

NASA

• Issues and monitors licenses for launches and reentries and for launch and reentry sites for the safety of 

the public and protection of property

• Determines financial responsibility, including insurance requirements

• Promotes the industry

FAA

• Provides infrastructure, operations support, and safety oversight at federal launch sites

• Provides investment in launch vehicle design and development 

• Is a customer for satellite services and launches

DOD

• Promotes commercial investment in the industry and sales of U.S. goods and services internationally

• Develops policies to improve the international competitiveness of the U.S. industry and advocates for the U.S. 

industry in international competitions

• Is a customer for satellite and launch services

Commerce

DHS • Responsible for security at spaceports

• Ensures that U.S. space policies are in accordance with U.S. foreign policy objectives and international 

commitments

• Regulates export of space technology

State

Source: GAO analysis of agency information.

Page 15 GAO-07-16 Commercial Space Launches
FAA has met its safety performance goal of no fatalities, serious injuries, 

or significant property damage to the public; however, the Air Force’s 

oversight of its launch sites has contributed to this achievement. FAA’s 

oversight of launches includes the use of a system safety process in its 

licensing and monitoring process and incorporation of management 

controls, which we have reported to be effective means of providing safety 

oversight and program management. 

FAA has met its annual performance goal to have no fatalities, serious 

injuries, or significant property damage to the public during licensed space 

launches and reentries since establishing this goal in 2003. Moreover, 

according to FAA, none of the 179 commercial launches that occurred 

between March 1989 and August 2006 resulted in casualties or substantial 

property damage. Of these 179 launches, FAA had joint oversight 

responsibility with other federal agencies for 152 (about 85 percent) and 

sole responsibility for 27 (about 15 percent) that included sea launches 

and the launches of SpaceShipOne from Mojave Spaceport. FAA shared 

responsibility with the Air Force for 132 launches at Air Force launch sites 

and with NASA, the Army, or foreign governments for 20 launches at 

NASA’s Wallops Flight Facility in Virginia, the Army’s White Sands Missile

Range in New Mexico, and other facilities. Thus, the majority of 

commercial space launches during this period took place at Air Force 

launch sites where the Air Force had primary responsibility for safety 

oversight. We discuss later in this report the challenges that FAA faces in 

the future in assuming sole responsibility for launch safety oversight at 

spaceports. 

FAA incorporates a system safety process in its oversight of commercial 

launches by requiring the launch company to use system safety in the

development and operation of its vehicle and in applying system safety 

methodologies to calculate the risk posed by a launch. As we have 

reported, a system safety process is an effective evaluative method of 

identifying and mitigating risks.19 Specifically, system safety relies on the 

application of technical and managerial skills to identify, analyze, and 

FAA Has Met Its 

Safety Performance 

Goal While Using a 

System Safety 

Process and 

Management Controls 

FAA Has Met Its Safety 

Performance Goal of No 

Fatalities or Substantial 

Property Damage 

FAA’s Licensing Process 

Incorporates System 

Safety 

 19GAO, Aviation Safety: System Safety Approach Needs Further Integration into FAA’s 

Oversight of Airlines, GAO-05-726 (Washington, D.C.: Sept. 28, 2005). 

Page 16 GAO-07-16 Commercial Space Launches
control hazards and risks. An objective of a system safety process is to 

identify hazard trends to spot and correct problems at their root cause 

before an incident occurs. 

During the licensing process, the launch company is responsible for 

system safety by demonstrating that it has assessed all hazards and risks 

posed by its launch operations and has proposed how to mitigate them. 

The assessment is focused on safety critical systems, such as a vehicle’s 

main structure, propulsion system, and flight safety systems, whose 

performance or reliability can affect public safety and the safety of 

property. Through the development of a system safety program plan, the 

launch company applicant demonstrates that the proposed vehicle design 

and operations satisfy regulatory requirements, and that the system is 

capable of performing safely during all flight phases, including launch and 

reentry. The plan provides a description of the strategy by which 

recognized and accepted safety standards and requirements, including 

organizational responsibilities, resources, methods of accomplishment, 

milestones, and levels of effort, are to be tailored and integrated with other 

system engineering functions. FAA consults with an applicant early in its 

launch vehicle development to help the applicant understand what must 

be included in the system safety program plan. In addition, FAA reviews 

the final system safety program plan as part of its safety review of the 

license application.20

Another way in which FAA incorporates system safety in its oversight of 

commercial launches is by conducting a risk analysis for each launch. FAA 

calculates, for each launch, the expected average number of casualties 

(deaths or serious injuries) to the public from debris hazards in the 

proposed flight path. This risk level—no more than 30 per million for the 

public and no more than 1 per million for an individual—is consistent with 

the launch standards used at federal launch sites. According to FAA, the 

risk to the public from commercial launches should not exceed “normal 

background risk”—that is, no greater risk than is voluntarily accepted in 

the course of normal day-to-day activities. For licensing launch-site 

operations, FAA performs a similar safety review that includes a risk 

analysis, which considers the site’s proximity to populated areas and a 

review of security planned at the facility. The risk analysis is both sitespecific and vehicle-specific, and FAA reviews the results on a case-by-

 20FAA’s review of the license can also include a policy review, a payload review, a financial 

responsibility determination, and an environmental determination. 

Page 17 GAO-07-16 Commercial Space Launches
case basis because of differences between launch sites and vehicle 

designs. 

An expert on system safety confirmed our assessment that FAA has 

appropriately applied a system safety process to its launch license 

activities. In particular, the expert said that FAA has identified all of the 

safety systems that are critical to commercial space launches, made the 

proper assumptions of risk, and used proper validation methodologies. He

also noted that FAA has used a higher factor of safety for commercial 

space launches than is commonly used in other industries, which is 

appropriate given that the space launch industry has a high-risk profile. 

However, the expert said that FAA should update its system safety 

handbook as the space tourism sector matures to incorporate different 

launch methods, such as launches from land, sea, and air, which may have 

different safety implications. 

FAA Has Applied 

Management Controls in 

Its Licensing Process 

FAA is applying relevant management controls in its licensing process. 

Management controls that we reviewed include the documentation of the

review and approval of licenses, compliance with timely review

requirements, communication with other federal agencies, and reliability 

and verification of data. According to our review of the 19 applications for 

launch and launch-site licenses that were active as of January 2006, FAA is 

applying these management controls.21 FAA accurately documented the 

review and approval process and completed its reviews of license 

applications within 180 days, as required by the Commercial Space Launch 

Act. However, FAA starts counting the 180 days after deciding that an 

application is sufficiently complete. Our analysis showed that FAA 

communicated and consulted on an as-needed basis with other federal 

agencies that are members of an interagency advisory group on 

expendable launch vehicles, as required by an executive order22 that 

designates DOT as lead agency within the federal government for 

commercial space launches. This communication includes coordinating 

with other federal agencies during the licensing process. Representatives 

 21Even though the document had expired, we also reviewed the application for Scaled

Composites’ SpaceShipOne, which at that time was the only licensed reusable launch

vehicle that had flown. 

22Executive Order 12465, Commercial Expendable Launch Vehicle Activities (Feb. 24, 

1984). The members of this advisory group include DOD, State, Commerce, the Federal 

Communications Commission, and NASA. 

Page 18 GAO-07-16 Commercial Space Launches
from the majority of agencies serving on the group told us that FAA had 

periodically contacted them during its review of license applications. For 

example, agency representatives told us that FAA had checked with DOD 

on whether certain launches would negatively affect national security, and 

with State on whether launches were consistent with international 

treaties. In addition, our analysis showed that FAA verified the 

information in the applications for accuracy. 

In response to changes in the commercial space launch industry, including 

the emerging issues of anticipated growth in space tourism, FAA issued 

regulations in 2000 for the licensing of launch and reentry of reusable 

launch vehicles. The regulations for reusable launch vehicles require 

launch operators to obtain a safety approval from FAA in order to receive

a license.23 In August 2006, FAA issued regulations that include safety 

requirements that applicants must meet to obtain a license for operations 

of expendable launch vehicles.24 The 2006 regulations cover license 

requirements for any launch of a commercial expendable launch vehicle

from any launch site, whether a federal launch site or a spaceport. 

However, some industry experts raised questions about the 

appropriateness of the regulations for operations at spaceports and also 

expressed concern about both existing and potential future safety 

requirements for reusable launch vehicles, which can vary widely in design

and operation. In addition, FAA has developed training for its aerospace 

engineers to help prepare them to assume safety oversight responsibility at 

spaceports. 

FAA’s regulations for operations of launch vehicles and launch sites are 

based on common safety standards, which were developed jointly by FAA 

and the Air Force to harmonize the respective agencies’ safety practices. 

(See app. IV for a timeline and list of FAA’s commercial space launch 

rulemaking and guidance.) These safety standards cover vehicle design

and operations and criteria for acceptable risks for launch and launch-site 

FAA Has Developed 

Regulations and 

Training to Respond 

to Emerging Issues 

FAA Has Developed Safety 

Regulations for Launch 

Vehicles and Launch Sites 

 23Commercial Space Transportation Reusable Launch Vehicle and Reentry Licensing 

Regulations, Final Rule, 14 C.F.R. Parts 400, 401, 404, 405, 406, 413, 415, 431, 433, and 435;

65 Fed. Reg. 56618 (September 19, 2000). 

24Licensing and Safety Requirements for Launch, Final Rule (to amend 14 C.F.R. Parts 413, 

415, and 417); 71 Fed. Reg. 50508 (August 25, 2006). 

Page 19 GAO-07-16 Commercial Space Launches
operations, such as the siting of hazardous materials.25 The regulations 

build on those common standards with the goal of promoting consistent,

streamlined safety reviews of launch operations.

However, concerns have been raised regarding the suitability of the 2006 

regulations, which are based on the experience of expendable launch

vehicles at federal launch sites, for launches at spaceports. Some industry 

experts that we interviewed noted that differences in spaceports from 

which vehicles are or will be launched raise questions about the 

appropriateness of the regulations. Additionally, while the 2006 

regulations only apply to expendable launch vehicles, industry experts 

expressed concern about safety regulation of reusable launch vehicles, 

given the difference in the design of vehicles and the methods for 

launching them. FAA stated that it addresses these concerns by (1) making 

license determinations on a case-by-case basis using common 

performance standards and (2) providing waivers in special 

circumstances. Performance standards require launch companies to meet 

certain performance thresholds—a risk level, calculated by an expected 

casualty analysis, of no more than 30 per million for the public and 1 per 

million for an individual—while allowing these companies to develop their 

own specific launch vehicle design. FAA said that it uses performance 

standards to encourage innovation in vehicle design, rather than being

prescriptive on how the vehicle should be designed. FAA said that its 

ability to issue waivers of license requirements for special circumstances 

allows it to assess the unique characteristics of a launch and its impact on 

safety. FAA, for example, granted a waiver at Mojave Spaceport that 

allowed for the storage and handling of liquid propellants closer to the 

runway—which would be used for a horizontal launch, such as 

SpaceShipOne—than would have been allowed for a vertical launch. Later 

in this report, we discuss the challenges that FAA faces in ensuring that its 

regulations are suitable for the emerging space tourism sector. 

In addition, industry officials and one expert with whom we spoke raised 

concerns about the costs that expendable launch vehicle companies would 

incur to comply with the proposed regulations, because they believe that 

FAA’s safety requirements at federal launch sites will be in addition to the 

Air Force’s requirements. However, according to FAA, it has minimized 

these companies’ costs by ensuring that its safety standards are the same 

 25Under the regulations, the launch company has responsibility for flight and ground safety 

at spaceports. 

Page 20 GAO-07-16 Commercial Space Launches
as the Air Force’s, and that waivers issued by FAA or the Air Force are 

accepted by both agencies. FAA officials also noted that they have the 

authority to implement an option that they said could potentially reduce 

costs for both launch companies and the agency—namely, to issue a safety

approval that is separate from a licensing determination. For example, 

they said that FAA could approve a component of a vehicle, such as a 

flight termination system, which could then be used for multiple licenses.26

This approval could reduce uncertainty and costs for the vehicle 

manufacturer and save FAA the cost of evaluating the component for each 

license. As of August 2006, FAA had not made any such approvals. 

FAA Has Developed 

Training to Respond to 

Space Tourism 

FAA has developed training for its aerospace engineers that focuses on 

oversight duties and technical areas. According to FAA, the oversight 

training addresses evaluations of license and permit applications; safety 

inspections of launch, reentry, and site operations; and mishap 

investigations of launch and reentry vehicles. Technical training addresses 

system safety, flight safety analyses, and flight safety systems. The training 

is either provided in-house or obtained from commercially available 

sources and other government agencies. In addition, to help its aerospace

engineers develop expertise that will be applicable to reusable launch

vehicles, employees from FAA’s Office of Commercial Space 

Transportation who are pilots and familiar with aircraft certification 

systems share their expertise with other staff. FAA also has sent its 

aerospace engineers to NASA and Air Force courses on launch and space

flight operations, which include procedures for the launch and recovery of

vehicles; FAA courses on avionics and aircraft operations, which are 

relevant because reusable launch vehicles have aircraft characteristics; 

and National Transportation Safety Board courses on aviation accident 

investigation, which includes procedures that would be useful in the event 

of a launch incident. While this training will help FAA to respond to 

current emerging issues, it will be important for FAA to keep abreast of 

industry changes and train their aerospace engineers accordingly. 

 26A safety approval would allow the use of an approved launch vehicle, a safety system, a 

process, a service, or personnel, without requiring reexamination of fitness for a particular 

launch or reentry proposal subject to FAA licensing. Any safety system or service integral 

to launch or reentry operations is a possible candidate for a safety approval, as well as the 

entire vehicle and personnel who perform key safety functions. 

Page 21 GAO-07-16 Commercial Space Launches
FAA faces multiple challenges in responding to the emergence of the 

space tourism sector. Those challenges include obtaining the expertise 

and resources needed to provide safety oversight of the sector, ensuring 

that its various regulations are suitable for the different launches and 

launch sites it licenses, determining the circumstances under which it 

would regulate passengers and crew, and ensuring that its industry 

promotion responsibilities do not conflict with its safety oversight 

responsibilities. 

If the space tourism industry develops as rapidly as some industry 

representatives suggest, FAA’s responsibility for licensing reusable launch

vehicles will greatly expand. However, FAA’s experience in this area is 

limited because its launch safety oversight has focused primarily on 

unmanned orbital launches. From 1989 to 2005, FAA issued two reusable 

launch vehicle licenses that were mission-specific27 and conducted 

compliance monitoring and safety inspections for five reusable launch

vehicle missions. Although FAA gained some experience and expertise 

from these missions, some industry representatives and experts with 

whom we spoke questioned whether FAA is prepared for its expanded role

and raised concerns about whether FAA has sufficient experience and 

expertise. Experts also indicated that FAA must stay ahead of the 

development of the reusable launch vehicle industry to fulfill its safety 

oversight responsibilities, because many companies are developing space 

hardware for the first time and are producing different designs that have 

not been tested. For example, a safety incident28 occurred during a 

SpaceShipOne flight when the vehicle deviated from the launch trajectory 

and flew over a populated area. FAA evaluated this incident and required 

Scaled Composites, the developer of SpaceShipOne, to take corrective 

measures to continue its licensed flights. During its next flight, 

SpaceShipOne unexpectedly rolled 29 times, which FAA did not classify as 

FAA Faces Challenges 

in Fulfilling Its 

Responsibilities for 

Regulating the 

Emerging Space 

Tourism Sector 

FAA Faces Human 

Resources and Workload 

Challenges in Addressing 

Its Responsibilities for 

Licensing Reusable 

Vehicles 

 27Launch vehicle licenses are granted for either specific missions or for all missions over a 

fixed period. 

28FAA defines an incident as an unplanned event occurring during the flight of a launch 

vehicle involving a malfunction of a flight safety system or safety-critical system or a failure 

of the licensee’s safety organization, design, or operations. 

Page 22 GAO-07-16 Commercial Space Launches
an incident.29 In addition, retaining staff expertise may also be a challenge,

given federal funding constraints and competition within the industry for 

qualified aerospace engineers. We have reported on the challenges the 

aerospace industry faces in attracting, training, and retaining new workers 

with the engineering, science, and technical capabilities it needs, given 

recent trends in the decline of the future supply of such workers.30 In 

FAA’s case, two of the five aerospace engineers who worked on the 

licensing and monitoring of SpaceShipOne flights are no longer with the 

agency. However, FAA said that it has since filled these positions. 

To help evaluate the safety of reusable vehicle launches, FAA’s Office of 

Commercial Space Transportation has obtained expertise from outside 

firms and other FAA offices. For example, FAA contracted with a 

consulting firm to verify the expected casualty analysis involving 

SpaceShipOne’s flights. In addition, because of certain similarities 

between reusable launch vehicles and aircraft, the Office of Commercial 

Space Transportation has consulted with FAA’s Office of Aviation Safety.

Both of these FAA offices, for example, worked on SpaceShipOne’s 

license application and had a documented agreement that described how 

the offices would work together. However, according to Scaled 

Composites, confusion existed during the licensing process regarding the

respective authorities of the FAA offices. For instance, Scaled Composites

was required to have two authorizations—one for its vehicle and one for 

its launch operations. Initial vehicle flight tests to demonstrate “proof of 

concept” were conducted by the Office of Aviation Safety. Once Scaled 

Composites was ready to conduct launch operations, the Office of 

Aviation Safety transferred the vehicle review to the Office of Commercial 

Space Transportation, which reviewed the launch for licensing. According 

to an Office of Aviation Safety inspector, communication between the two 

offices, especially during the transfer stage of the review of SpaceShipOne,

was not clear. In addition, an FAA engineer stated that distinctions 

between the two offices’ respective authorities had to be made so that 

there was no overlap and disagreement between the offices. Since the

licensing of SpaceShipOne, the Commercial Space Launch Amendments 

 29FAA did not classify the unexpected rolls as a launch incident because the agency was 

listening to the transmission during the roll and concluded that the pilot was in command

and control of the vehicle and the potential impact point of the vehicle was over an 

unpopulated area. 

30GAO, U.S. Aerospace Industry: Progress in Implementing Aerospace Commission 

Recommendations and Remaining Challenges, GAO-06-920 (Washington, D.C.: Sept. 13, 

2006). 

Page 23 GAO-07-16 Commercial Space Launches
Act of 2004 clarified responsibility by stating that only one license would 

be required by DOT to approve commercial space launches, and this 

responsibility has been designated to the Office of Commercial Space 

Transportation. However, the two offices still need to coordinate on 

license reviews for operations of hybrid vehicles having both aircraft and 

rocket-like characteristics, according to officials in both offices. 

Nonetheless, no formal process exists between the two offices that 

outlines when and under what circumstances the offices should consult. 

While the documented agreement between the offices described how they

would authorize flights of SpaceShipOne, this document is specific to 

those flights and is not generic for future reusable launch vehicle licenses. 

FAA’s safety oversight of the commercial space launch industry may be 

further challenged, in part, because of the expected increase in workload 

demands facing agency staff. FAA is anticipating a substantial increase in 

the number of permit and launch applications that could be submitted for 

reusable launch vehicle and launch-site operations in the near future, but 

FAA has not quantified the magnitude of applications. For example, FAA’s 

annual industry forecast does not include projected reusable vehicle

launches. FAA said that its anticipated increase in applications is based on 

preapplication consultations that FAA has conducted with reusable launch 

vehicle companies and spaceports. In addition, an FAA official noted that

companies with existing reusable launch vehicle licenses are likely to 

apply for additional permits or licenses for the new vehicles they are 

developing. Furthermore, launch companies participating in NASA’s Lunar 

Lander Challenge and Commercial Orbital Transportation Services 

demonstration program and Commerce’s Geostationary Operational 

Environmental Satellite Program are required to obtain commercial launch 

permits or licenses from FAA.31 FAA initially plans to be present for every 

licensed launch of a reusable vehicle. If FAA carries out this plan, its staff 

workload would increase, since the proposed spaceports for space 

tourism flights are located throughout the country and space tourism 

companies are planning frequent launches. FAA has not determined the 

 31The objective of NASA’s Lunar Lander Challenge, conducted under the auspice of the

agency’s Centennial Challenges Program, is to accelerate technology developments 

supporting the commercial creation of a vehicle capable of ferrying cargo or humans back

and forth between lunar orbit and the surface of the moon. An objective of the Commercial 

Orbital Transportation Services demonstration program is to develop a transportation 

system that can carry cargo and eventually crew to the International Space Station. The 

purpose of the Geostationary Operational Environmental Satellite Program, which is a joint 

effort of NASA and the National Oceanic and Atmospheric Administration, is to help

meteorologists observe and predict local severe weather events. 

Page 24 GAO-07-16 Commercial Space Launches
level of resources needed to meet this expected increase in responsibilities 

involving reusable launch vehicles. Agency officials said that they monitor 

the industry to assess how its development could impact resource 

requirements and will not make a budget request for additional resources 

until the workload has grown to justify the request. However, the agency

has not conducted scenarios of different workload projections on the 

basis of increased space tourism launches. 

FAA Faces the Challenge 

of Ensuring That Its 

Various Regulations Are 

Suitable for Launches 

FAA faces the challenge of ensuring that its 2006 regulations on licensing 

and safety requirements for launch, which are based on the Air Force’s 

safety requirements for expendable launch vehicle operations at federal

launch sites, will be suitable not only for operations at federal launch sites,

but also for operations at spaceports. As we previously mentioned, 

industry representatives and experts are concerned that the safety 

regulations for reusable launch vehicles may not be suitable for space 

tourism flights because of differences in vehicle types and launch 

operations. Table 1 contains a comparison of some of the differences 

between expendable and reusable launch vehicles. 

Table 1: Comparison of Expendable and Reusable Launch Vehicles for Commercial Launches 

Expendable launch vehicle Reusable launch vehicle

Vehicle not reused All or part of vehicle reused

Flight may be terminated by destroying the vehicle Flight may be terminated by landing the vehicle 

Generally not piloted and not designed to carry passengers Piloted or unpiloted and most are designed to carry 

passengers 

Generally launched vertically or in the air May be launched vertically, horizontally, or in the air 

May be used for either orbital or suborbital flights May be used for either orbital or suborbital flights 

Proven safety records Generally unproven safety records 

Typically launched over unpopulated ocean areas May be launched over partially populated areas 

Primarily launched by established launch companies, such as Boeing, 

Lockheed Martin, and Orbital Sciences Corporation, at federal launch 

sites 

Will be launched primarily by new launch companies at 

spaceports 

Currently subject to Air Force and FAA safety requirements Subject to FAA licensing regulations, which require safety 

approvals 

Generally use liquid and solid rocket fuels Generally use liquid rocket fuels 

Not required to withstand the heat of reentry Required to withstand the heat of reentry 

Source: GAO analysis of comments from the Air Force, FAA, aerospace representatives, and experts. 

Page 25 GAO-07-16 Commercial Space Launches
Three of the six operators of licensed spaceports and six of the eight 

operators of spaceports in the licensing process told us they did not 

believe that FAA’s regulations should apply to the new spaceports. Five of

these spaceport officials said that since reusable vehicles can be launched

differently from expendable vehicles and can return to earth, the reusable 

vehicles present different safety implications. 

In addition, concerns about the suitability of the safety regulations were 

raised by experts we interviewed and by comments filed in the public 

docket for these regulations. While it was noted that the regulations were 

appropriate to spaceports if the vehicles launching from them are using 

exotic or dangerous fuels, concerns were raised that the rules may be too

stringent for the currently proposed and operating reusable launch 

vehicles. Although the safety regulations applicable to expendable launch 

vehicles are separate from the safety approvals required to obtain a 

reusable launch vehicle license, some experts are concerned about 

similarities in the safety rules. For example, two experts noted that the 

expected casualty analysis32 that is the same for launches of expendable 

and reusable vehicles might be too high for reusable vehicles, given the 

vehicles’ different safety implications. Experts also said that safety 

regulations should be customized for each spaceport to address the 

different safety issues raised by different orbital trajectories and the 

differences in the way that vehicles launch and return to Earth—whether 

vertically or horizontally. (See fig. 5 for examples of vertical federal launch

sites and spaceports.) To address these concerns, experts have noted that 

it will be important to measure and track safety information and use it to 

determine if the regulations should be revised. For example, an expert 

noted that FAA should identify and track safety indicators for launch 

companies and spaceports and, as the industry matures, conduct trend 

analyses with the objective of eliminating negative situations

representative in the trends. Another expert noted that any safety 

performance measure should account for different launch and trajectory 

tracks, such as over land or over water. Yet another expert noted that 

FAA’s proposed regulations for experimental permits allow FAA to collect 

statistical data that could then be applied to develop safety standards 

criteria. FAA says that it collects data on anomalies and failures of safetycritical systems, which will allow it to analyze safety trends and determine 

potential precursors to accidents. However, the agency has not conducted 

 32Acceptable Reusable Launch Vehicle Mission Risk, 14 C.F.R. 431.35; Flight Safety, 14 

C.F.R. 417.107 (b). 

Page 26 GAO-07-16 Commercial Space Launches
trend analyses of that information. Other industry experts noted that the 

regulations should be revisited when the space tourism sector has further 

developed. Meanwhile, the Commercial Space Launch Amendments Act of 

2004 requires DOT to commission an independent report to be issued to 

Congress and completed by December 2008. This report is to analyze 

whether expendable and reusable vehicles should be regulated differently 

from each other, and whether either of the vehicles should be regulated

differently if carrying passengers. This report could provide FAA with 

information to address industry concerns about the suitability of its 

regulations to space tourism. 

Figure 5: Examples of Vertical Federal Launch Sites and Horizontal Spaceports 

Oklahoma Spaceport

Mojave Spaceport

Vandenberg Air Force Base

Atlas V launch pad

Cape Canaveral Air Force Station

Delta IV launch pad

Cape Canaveral

Air Force Station

Federal Launch Sites Spaceports

Sources: GAO and FAA.

Page 27 GAO-07-16 Commercial Space Launches
The Commercial Space Launch Amendments Act of 2004 requires that a 

phased approach be used in regulating commercial human space flight, 

and that regulatory standards evolve as the industry matures. The act 

prohibits FAA from regulating crew and space flight participant safety 

before 2012, except in response to incidents that either pose a high risk or

result in serious or fatal injury. However, the act maintains FAA’s 

authority over protecting the uninvolved public, and FAA stated that it has 

the authority to regulate crew and passenger safety to the extent that the

public would be affected. According to FAA, it is only prohibited from 

issuing regulations that apply solely to crew and passenger safety, and any 

situation that implicates the public would allow FAA to regulate. FAA 

asserts that it has the authority to protect the crew because they are part 

of the flight safety system that protects the general public. FAA’s proposed 

regulations for human space flight33 would establish requirements for crew 

qualifications and training and space flight participant training and 

informed consent. Although these proposed regulations address passenger 

and crew behavior, FAA believes that the regulations are within its 

authority because they are intended to protect the public—not space flight 

participants. For example, the proposed regulations would require an

operator to train each space flight participant before the flight on how to 

respond to emergency situations, including loss of cabin pressure, fire, 

smoke, and emergency egress. The proposed training requirement is aimed 

at protecting public safety, because if a space flight participant did not 

receive this training, he or she might interfere with the crew’s ability to 

protect public safety. 

FAA Faces the Challenge 

of Determining the 

Circumstances under 

Which It Would Regulate 

Crew and Flight 

Participant Safety on 

Space Tourism Flights 

before 2012 

The proposed regulations are not aimed solely at crew and passenger 

safety and, as a result, there have been instances in which FAA has not 

stepped in and imposed additional regulations or requirements for safety 

reasons because the public was not implicated. For example, Scaled 

Composites’ SpaceShipOne rolled 29 times, and, according to FAA, it did 

not impose additional requirements because the flight was over a 

unpopulated area, and because FAA concluded that the pilot was in 

control of the vehicle. FAA monitored and reviewed the corrective actions 

taken by Scaled Composites prior to its next flight. Additionally, FAA has 

not developed specific criteria regarding when an incident would qualify 

as contributing to “an unplanned event or series of events...that pose a 

 33Human Space Flight Requirements for Crew and Space Flight Participants; Proposed Rule 

to amend 14 C.F.R. parts 401, 431, 435, 440, 450, and 460; and 70 Fed. Reg. 77262. 

Page 28 GAO-07-16 Commercial Space Launches
high risk of causing a serious or fatal injury” that would trigger FAA’s 

authority to issue regulations specific to crew and passenger safety. 

Experts and industry representatives that we interviewed expressed 

different opinions about whether FAA should regulate crew and flight 

participant safety and, if so, when. Some industry representatives and 

experts we interviewed agreed that the Commercial Space Launch 

Amendments Act of 2004 provides the industry with the flexibility needed 

to innovate and grow. However, other experts said that there is too much 

flexibility in the act. One of these experts noted that FAA should publish 

the criteria that would cause it to regulate crew and flight participant 

safety before 2012. Another expert said that FAA’s having the discretion to

decide when it would regulate crew and flight participant safety creates 

uncertainty for the industry, noting that without published criteria, the 

industry does not know how FAA would react to an incident involving a 

space tourism company, which could seriously hurt the industry. The 

designer of a reusable launch vehicle told us that FAA should regulate 

crew and flight participant safety for commercial space flight because he

believes that space tourism needs to be as safe as commercial aviation.

Meanwhile, a trade association made up of space tourism companies and 

spaceports—called the Personal Spaceflight Federation—plans to 

commission standards for vehicles and their operation, including space 

flight participant safety, as the space tourism industry develops.34 The 

federation believes that ensuring the highest-possible level of safety for the 

industry and sharing best practices will be essential to promote the safety

and growth of the industry. The federation intends to commission an 

independent standards organization, such as the American Society for 

Testing and Materials, to develop accredited industry standards for 

voluntary testing and approval, much as Underwriters Laboratories, an 

independent organization that tests electrical devices, has done. According 

to an expert, while companies do not have to submit their products to 

Underwriters Laboratories for testing, market acceptance is low and 

liability exposure is high without the Underwriters Laboratories’ stamp of 

approval. The expert believes that a similar approach will work for space 

flight participants, who are more likely to choose to fly on a launch vehicle 

 34Personal Spaceflight Federation members include AirLaunch, LLC; Armadillo Aerospace; 

Bigelow Aerospace; New Mexico Spaceport Authority; Mojave Spaceport; Oklahoma

Spaceport; Rocketplane Kistler; Scaled Composites; SpaceDev; SpaceX; Space Adventures;

Virgin Galactic; XCOR Aerospace; and X PRIZE Foundation. 

Page 29 GAO-07-16 Commercial Space Launches
that has been approved according to industry standards than on one that 

has not been approved. 

FAA’s Dual Role of

Promotion and Safety May 

Pose a Challenge 

FAA faces the potential challenge of overseeing the safety of commercial 

space launches while promoting the industry as the space tourism sector 

develops. According to our analysis, FAA’s current promotional activities

have not conflicted with its safety regulatory role; however, industry 

experts have noted that potential challenges may arise as the space 

tourism sector develops. FAA is mandated to regulate the commercial 

space transportation industry to protect public safety and property while 

encouraging, facilitating, and promoting commercial space launches. 

According to FAA, its promotional activities include sponsoring an annual 

industry conference, sponsoring Commercial Space Transportation 

Advisory Committee meetings and work groups, presenting space-related

topics at various aerospace professional association conferences, creating

forums at which industry elements network, publishing economic impact 

studies and launch forecast reports, and conducting outreach to potential 

license applicants. These are all activities that experts say, and we agree, 

do not conflict with FAA’s safety oversight responsibilities. According to 

some experts, FAA’s promotional activities have not conflicted with the 

agency’s role as a safety regulator because the activities do not involve

advocacy for the industry, nor do they increase demand in the industry. 

Furthermore, experts noted that some of these activities promote FAA’s 

safety role. For example, outreach to potential license applicants is a 

means of ensuring that new launch companies know about and adhere to

federal safety regulations. Experts also noted that industry conferences 

are a means by which FAA can have a dialogue with industry to ascertain 

new industry trends and issues. FAA also has provided an estimated 

$200,000 for Mojave Spaceport to complete its environmental impact 

study, which FAA deems a promotional activity. According to its statutory 

responsibility, FAA can take action to facilitate private sector involvement 

in spaceport infrastructure. 

However, as the commercial space launch industry matures, there is a 

greater risk that FAA’s role as both the regulator and a promoter of the 

industry may pose a conflict of interest. Experts told us, and we agree, that 

as the commercial space launch industry evolves, it may be necessary to 

separate FAA’s regulatory and promotional activities. For example, one 

expert indicated that with the emergence of space tourism, FAA’s dual role 

could pose a potential conflict of interest between creating an enabling 

business environment and not compromising safety with regard to the 

agency’s determining when and if it would regulate crew and passenger 

Page 30 GAO-07-16 Commercial Space Launches
safety on space launches. Other experts cited Congress’s removal of FAA’s 

promotional responsibilities for commercial aviation in 1996 as evidence 

of the importance of maintaining FAA’s focus on safety oversight. In 

response to the ValuJet accident of May 11, 1996, the DOT Secretary asked 

Congress to restrict FAA’s mandate to safety, eliminating its role in 

promoting the airline industry. According to the conference report that 

accompanied the legislative change, Congress withdrew FAA’s 

promotional role in commercial aviation to address public perceptions 

that might exist that the promotion of air commerce by FAA could create a 

conflict with its safety regulatory mandate. Congress also has withdrawn 

promotional responsibilities from other transportation entities. In 1961, 

the Federal Maritime Board was dissolved and its promotion and safety 

responsibilities were transferred to Commerce and the Federal Maritime 

Commission, respectively. In proposing the legislative change, the 

President stated that this change was made to eliminate the intermingling 

of regulatory and promotional functions that had diluted responsibility and 

led to serious inadequacies, particularly in the administration of regulatory

functions. Recognizing the potential conflict in the oversight of 

commercial space launches, Congress required DOT to report by 

December 2008, among other things, on whether the federal government 

should separate the promotion of human space flight from the regulation

of such activity. 

Furthermore, FAA’s promotional role has the potential to overlap with that 

of Commerce’s role—given the broad definition of FAA’s statutory 

promotional responsibilities, the more detailed definition of Commerce’s 

promotional responsibilities, and the efforts of Commerce to fully staff its 

Office of Space Commercialization. Commerce’s International Trade 

Administration, which is responsible for promoting U.S. exports and 

competitiveness of U.S. companies in foreign markets, has remained fully 

staffed and provides assistance to the U.S. commercial space industry. 

However, the Office of Space Commercialization within NOAA did not 

have a permanent director from 1999 through January 2006 and had been 

staffed with one permanent employee who had been charged with work 

related to satellite services. In February 2006, a new director was 

appointed, and, as of June 2006, the office has been fully staffed. The 

Office of Space Commercialization is currently developing a strategic plan 

that is to be completed by the end of 2006. Some of FAA’s promotional 

activities, such as publishing economic impact studies on the industry, 

have been undertaken due to past understaffing at Commerce, according

to an FAA official. FAA has not revisited which promotional activities it 

should continue to undertake in light of these new developments at 

Page 31 GAO-07-16 Commercial Space Launches
Commerce. (Fig. 6 describes FAA’s and Commerce’s statutory promotional 

responsibilities.) 

Figure 6: FAA’s and Department of Commerce’s Statutory Promotional 

Responsibilities 

Agency Statutory Promotional Responsibilities

• Promote commercial provider investment in space activities by 

collecting, analyzing, and disseminating information on space 

markets and conducting workshops and seminars to increase 

awareness of commercial space opportunities.

• Assist U.S. commercial providers in their efforts to conduct business

with the U.S. government.

• Act as an industry advocate within the executive branch to ensure 

that the federal government meets space-related requirements to 

the fullest extent feasible using commercially available space goods

and services.

• Ensure that the U.S. government does not compete with U.S. 

commercial providers in the provision of space hardware and 

services otherwise available from U.S. commercial providers.

• Promote the export of space-related goods and services.

• Participate in the development of U.S. policies and in negotiations

with foreign countries to ensure free and fair trade internationally in 

the area of space commerce.

• Seek the removal of legal, policy, and institutional impediments to 

space commerce.

Commerce

• Encourage, facilitate, and promote commercial space launches

and reentries by the private sector, including those involving 

passengers.

• Take actions to facilitate private sector involvement in commercial 

space transportation activity and to promote public-private 

partnerships involving the U.S. government, state governments, 

and the private sector to build, expand, modernize, or operate a

space launch and reentry infrastructure.

FAA

Source: GAO analysis of statutory authorities.

The U.S. commercial space launch industry faces key competitive issues 

concerning high launch costs and export controls. Space launches incur 

high costs for launch vehicle development and for launch facility 

operations and maintenance. The U.S. government has responded by 

providing support, such as launch contracts, the use of its launch facilities, 

and launch vehicle development infrastructure. 

To Help Address Key 

Competitive Issues 

Facing the Industry,

the U.S. Government 

Has Played an 

Important Role

Some foreign competitors have historically offered lower launch prices 

than U.S. launch providers. During the rise of the commercial launch 

industry in Russia, Ukraine, and China in the 1980s and 1990s, bilateral 

Page 32 GAO-07-16 Commercial Space Launches
agreements between these countries and the United States (1) limited the 

number of launches in those countries of commercial satellites containing 

U.S. licensed components and (2) imposed pricing restrictions. According 

to a Commerce official, the United States entered into these agreements 

because foreign countries were nonmarket economies and there was the 

potential to employ nonmarket-based practices or offer prices 

substantially below international market value. According to an USTR 

official, which negotiated these agreements, the agreements required the 

countries to price their commercial launch services “on a par” with 

Western companies, which allowed the nonmarket economies to evolve 

their industries while competing on a fair basis. These foreign 

governments were required to sign the agreements with the United States

as a condition of launching U.S. satellites or of launching any satellites 

containing U.S. licensed parts. According to an USTR official, these 

agreements were intended to be transitional to allow time for U.S. 

competitors to adjust to the entry of new launch companies from 

nonmarket economies. The bilateral agreement with Ukraine was 

terminated in 2000, while agreements with Russia and China were allowed 

to expire in 2000 and 2001, respectively, because of the changing dynamics 

in the marketplace—including, for example, the emergence of

international partnerships in the expendable launch vehicle industry. 

U.S. Industry Formed 

International Partnerships 

in Response to Foreign 

Price Competition 

The creation of international partnerships in the commercial space launch

industry could allow expendable launch vehicle companies to offer 

commercial launches at lower prices. International Launch Services, 

formed in 1995, is an international partnership of Lockheed Martin and a 

Russian launch company that markets launches of the U.S. Atlas vehicle

from Cape Canaveral and the Russian Proton vehicle from Baikonur in 

Kazakhstan. According to representatives from International Launch 

Services, between 1995 and 2005, the company contracted for 48 

commercial launches from Cape Canaveral and Baikonur. Sea Launch, 

formed in 1995, is an international partnership between the Boeing 

Commercial Space Company and companies from Ukraine, Russia, and 

Norway that launches from a sea platform near the equator. Between 1999 

and 2005, Sea Launch conducted 18 launches on a Ukrainian launch 

vehicle. Sea Launch has also partnered with Russia’s Space International

Services to form Land Launch, which will offer launches on the same 

Ukrainian vehicle from Baikonur beginning in 2007. 

Page 33 GAO-07-16 Commercial Space Launches
The United States, like foreign governments, supports its commercial 

launch industry in several ways. The U.S. government encourages federal 

agencies to acquire space transportation from U.S. commercial launch

companies. Some of these companies have also received DOD funds to 

develop new launch vehicles that are intended to provide low-cost access 

to space for government purposes. Once developed, these vehicles could 

also be used for commercial purposes. For example, DOD’s Evolved 

Expendable Launch Vehicle Program, a government-industry partnership 

whose objective is to lower the cost of medium-to-heavy lift vehicle

launches, has led to the development of Lockheed Martin’s Atlas V vehicle

and Boeing’s Delta IV vehicle. DOD has provided $1.4 billion to the 

program as of fiscal year 2006, with an additional investment of $4.6 billion 

provided by Lockheed Martin and Boeing. With the objective of reducing 

U.S. government launch costs, Lockheed Martin and Boeing have 

proposed a joint venture of their vehicle programs, called the United 

Launch Alliance, for which DOD gave conditional approval in January 2006 

and for which the Federal Trade Commission gave conditional clearance 

in October 2006. In addition, DOD has funded small vehicle development.35

For example, SpaceX, which has received DOD funding, has developed 

and is testing its Falcon I vehicle that will carry a small government 

payload and will launch from the Army’s Ronald Reagan Ballistic Missile 

Test Site on Kwajalein Atoll in the Marshall Islands.36 SpaceX then plans on

launching a small commercial payload to low-Earth orbit from Kwajalein 

at an estimated cost of under $7 million (in 2006 dollars).37 This cost is in 

contrast to launch prices for small payloads averaging $15 million, 

according to a report on space transportation costs.38 Furthermore, 

whereas international competitors launch prices for medium-to-heavy 

U.S. Government Supports 

the Industry through 

Launch Vehicle 

Development Contracts, 

Access to Infrastructure, 

Industry Competitions, and 

Indemnification 

 35The Defense Advanced Research Projects Agency and Air Force’s Falcon program

provides funding with the goal of developing a low-cost small launch vehicle that will place 

small satellites into low-Earth orbit and provide a low-cost means of launching suborbital 

hypersonic technology vehicles. 

36On March 25, 2006, Falcon I failed on its maiden launch. The failure is thought to have

been due to a fuel leak. 

37These costs are for launch vehicle development and do not include launch costs. 

38Futron Corporation, Space Transportation Costs: Trends in Price Per Pound to Orbit 

1990-2000, (Bethesda, Md.: Sept. 6, 2002). Estimated average launch prices are in 2000 

dollars and are based on published data. Launch prices vary according to factors that

include the weight of the payload and its intended orbit. Estimated average launch prices

for small vehicles exclude the Russian Navy Shtil vehicle. 

Page 34 GAO-07-16 Commercial Space Launches
payloads to geosynchronous transfer orbit39 average $56 million for 

medium and $87.5 million for heavy payloads,40 SpaceX plans to launch 

medium payloads on its Falcon 9 vehicle from $27 million and heavy 

payloads from $78 million. SpaceX said that it has reduced launch costs in 

a number of ways, including the simplification of vehicle design akin to 

Russian vehicles. Another example of new lower-cost vehicles that have

been developed with DOD support is AirLaunch, LLC, which has 

developed a small lift vehicle that launches from the air from a military 

cargo aircraft and is intended to put a small payload into orbit for less than 

$5 million.41 A representative from AirLaunch said that it plans to use this 

technology in partnership with t/Space to develop a vehicle that will 

compete in NASA’s Commercial Orbital Transportation Services 

demonstration program.42

The U.S. government also supports the industry by making infrastructure 

and support staff available at its launch sites. Air Force launch pads leased 

by launch companies may be used for government or commercial 

launches. The commercial launch company pays the Air Force the direct 

costs associated with its use of facilities and services for a commercial 

launch.43 The Air Force is not reimbursed for indirect costs such as 

infrastructure improvements or base support that involves the use of Air 

Force active-duty personnel.44 NASA provides launch vehicle development 

facilities, including rocket propulsion test stands, wind tunnels, and 

thermal vacuum chambers to vehicle developers. Other types of 

 39Geosynchronous transfer orbit is the orbit used to transfer a payload from an initial lowEarth orbit to the final orbit. It is used to calculate costs because most launch vehicles

place geostationary orbit-bound payloads in an intermediate transfer orbit from which the 

spacecraft maneuvers into geosynchronous orbit. 

40Estimated average launch prices for large vehicles are from Futron (2002) and exclude

NASA’s space shuttle. 

41Costs are for launch vehicle development only. 

42In August 2006, NASA selected SpaceX and Rocketplane Kistler as finalists in the

demonstration program.

43Launch companies expressed several concerns about the charges they have received from

the Air Force. For example, some commercial launchers said that bills have not provided 

sufficient detail about the charges incurred, have not always been accurate, and have 

arrived years after services were rendered. 

44A limited number of Air Force active-duty personnel may be used to support commercial 

space launches. The commercial customer could pay for extra civilian contractor positions 

but not for extra active-duty positions. 

Page 35 GAO-07-16 Commercial Space Launches
government support include prize competitions and indemnification. (See 

table 2.) 

Table 2: Examples of Federal Support to the Commercial Space Launch Industry 

Type of federal support Example 

Launch vehicle design and development DOD’s Evolved Expendable Launch Vehicle Program’s objective is to lower the cost of 

launches and has led to the development of the medium-to-heavy lift Atlas V and Delta IV 

vehicles. DOD’s Defense Advanced Research Projects Agency (DARPA) and Air Force 

Falcon Program’s goal is to develop a low-cost small launch vehicle that can be rapidly 

deployed. NASA’s Commercial Orbital Transportation Services demonstration program 

will provide $500 million through 2009 to one or more developers who demonstrate and 

successfully launch a vehicle that can deliver cargo and crew to the International Space 

Station. 

Infrastructure and support personnel DOD facilities at Cape Canaveral, Vandenberg, and White Sands and NASA facilities at 

Wallops Island provide some infrastructure and personnel support. NASA also provides 

launch vehicle development facilities, such as rocket propulsion test stands, wind tunnels, 

and thermal vacuum chambers. 

Prize competitions NASA’s Lunar Lander Challenge is designed to accelerate technology developments 

supporting the commercial creation of a vehicle capable of ferrying cargo or humans back 

and forth between lunar orbit and the surface of the moon. DARPA’s Vertical Rocket 

Challenge is designed to accelerate technology developments supporting the commercial

creation of vehicles capable of performing vertical takeoffs and vertical landings under 

rocket power. The combined prize money that could be awarded to one or more 

developers for these challenges is $3 million. 

Indemnification The U.S. government may pay third-party liability claims in excess of required launch 

insurance, up to $1.5 billion above the amount of the insurance. This catastrophic loss 

protection in the event of a commercial launch incident is known as indemnification.a 

Source: GAO analysis of agency data. 

a

FAA has commissioned a study, which is expected to be published in the fall of 2006, that will 

propose alternatives to indemnification. 

Demonstration programs, such as NASA’s Commercial Orbital 

Transportation Services, have received positive feedback from launch 

vehicle developers, according to a NASA official. In addition, the official 

said that the agency’s prize competitions, such as the Lunar Lander 

Challenge competition, have inspired many new launch vehicle companies 

to design vehicles using different launch approaches that could be used for 

human space flight. According to a launch company, the Commercial 

Orbital Transportation Services demonstration program allows for 

solicitations that encourage innovation and investment in the space 

industry by specifying an objective, such as carrying payloads to the 

International Space Station, rather than detailed requirements for a 

particular aircraft type. 

Page 36 GAO-07-16 Commercial Space Launches
States are offering economic incentives to develop spaceports to attract 

space tourism and provide economic benefits to localities. The New 

Mexico legislature approved $100 million in February 2006 for 

construction of the Southwest Regional Spaceport in Upham, New Mexico. 

The spaceport is expected to be completed in 2008 or 2009, with three 

vertical launch pads; two runways; and service facilities for fuel service, 

payload processing, launch control, and mission control. Currently, the 

Southwest Regional Spaceport has 5 signed customers,45 including Virgin 

Galactic, which plans to launch its initial commercial space flights from 

the spaceport and expects to fly 3,000 passengers within five years after 

commercial launches begin. According to an official from the Oklahoma 

spaceport, Oklahoma provides approximately $500,000 annually to the 

spaceport for operations, and the state paid for the environmental impact 

statement and the safety analysis needed to apply for an FAA license. 

Existing infrastructure includes a 13,500-foot runway capable of 

accommodating the Space Shuttle, maintenance and repair hangars, and a 

rail spur. Furthermore, the Oklahoma spaceport has offered incentives 

valued at over $128 million over 10 years to attract space companies. 

Rocketplane Kistler, which has developed a reusable vehicle, plans to 

launch from the Oklahoma spaceport starting in mid-2007.46 

States Are Offering 

Economic Incentives to 

Develop Spaceports for 

Space Tourism 

The Florida Space Authority, a state agency, has an arrangement with the 

Cape Canaveral Air Force Station to use a launch pad for expendable 

vehicle launches when excess capacity exists. The Florida Space Authority 

has invested over $500 million in new space industry infrastructure 

development, including upgrades to the launch pad, a new space 

operations support complex, and a reusable launch vehicle support 

complex. Lockheed Martin’s Athena and Atlas vehicles and Boeing’s Delta 

vehicle launch from the spaceport. Although a launch site primarily for 

vertical launches, the Florida Space Authority is also considering the 

development of a commercial spaceport at a Florida airport to 

accommodate horizontally launched space tourism flights. The MidAtlantic Regional Spaceport, colocated at NASA’s Wallops Flight Facility, 

owns two launch pads for expendable vehicle launches and has access to 

 45Other customers include the X PRIZE Cup, Rocket Racing League, Starchaser Industries, 

and UP Aerospace. 

46The Rocketplane Kistler vehicle is built on a Lear jet fuselage and launches horizontally.

The company plans on flying passengers at $200,000 per passenger. In 2006, Rocketplane

Kistler signed a marketing agreement with Incredible Adventures to sell suborbital tourist

flights. 

Page 37 GAO-07-16 Commercial Space Launches
three runways. The spaceport receives half of its funding from Virginia and 

Maryland, with the remainder coming from revenue from operations. 

According to the spaceport’s executive director, the spaceport will 

compete for Commercial Orbital Transportation Services demonstration

program launches. The Mojave Spaceport in Mojave, California, is owned 

and operated by the East Kern Airport District and consists of three 

runways with associated taxiways and other support facilities. With an 

FAA Airport Improvement Program grant of $7.5 million, one of these 

runways will be extended to allow for the reentry of horizontally landing

reusable vehicles.47 The spaceport also received FAA financial support to 

conduct its environmental assessment. Scaled Composites, XCOR 

Aerospace, and Interorbital Systems—companies that plan to enter the 

space tourism business—are tenants at the airport.48 Officials from 

spaceports told us the competition among the spaceports is positive. One 

licensed spaceport official mentioned that because each spaceport will 

attract a market unique to its launch capability; this competition will help 

the overall industry to grow. 

Industry Raised Concerns 

about Export Controls 

Industry representatives that we interviewed identified export licensing 

requirements under the International Traffic in Arms Regulations as a 

competitive issue facing the U.S. space launch industry. The regulations 

establish controls to ensure that arms exports are consistent with national 

security and foreign policy interests. Launch vehicles are included on 

State’s munitions list that is part of these regulations because these 

vehicles can deliver chemical, biological, and nuclear weapons. In the 

1990s, U.S. space technology was divulged to a foreign country, which led 

to improvements of the reliability of its ballistic missiles that could be 

used against the United States. Industry representatives said that they

would like fewer items to be regulated or a streamlined process for 

obtaining authorization to export launch vehicles. While we have not 

examined the issue of which specific items should be subject to export 

 47FAA’s Airport Improvement Program allocates grants to airports that are part of the 

National Plan of Integrated Airport Systems. Mojave Spaceport is classified as a general 

aviation airport and, thus, is eligible to apply for and receive Airport Improvement Program 

grants. 

48XCOR is developing the Xerus vehicle, which could be used for space tourism as well as 

the launching of small satellites to orbit. Interorbital Systems is designing the Neptune 

launch vehicle, which would launch from the surface of the ocean. 

Page 38 GAO-07-16 Commercial Space Launches
controls, we have examined the export control system and have 

recommended ways to improve its overall efficiency.49

As the commercial space launch industry expands to include the 

transportation of humans as well as satellites and other payloads into 

space and the use of inland as well as coastal launch sites, FAA’s safety 

oversight responsibilities will grow. To carry out these responsibilities and 

address the serious safety implications of the industry’s expansion for 

people both on the ground and in the launch vehicles, FAA will need 

sufficient expertise, either in-house or available from an impartial source, 

to evaluate a range of highly complex launch technologies. Such expertise

may be difficult for FAA to obtain and maintain, given federal funding 

constraints and competition from the industry for qualified aerospace 

engineers. While FAA’s decision not to request additional safety oversight 

resources until the space tourism industry materializes is prudent in light 

of the industry’s uncertain pace of development, FAA also needs to be 

prepared to provide competent safety oversight if and when its workload 

increases in order to continue to provide timely license approvals and 

monitoring. 

Conclusions 

Experience has not yet shown whether FAA’s regulations will be 

appropriate for the space tourism industry, given the differences in the 

operations of launch vehicles and the launch sites used to transport 

humans and payloads into space. FAA’s plan to address these differences 

through case-by-case evaluations of individual launch license applications

is reasonable for an emerging industry with a wide variety of products. A 

DOT commissioned report to be issued to Congress and completed by 

December 2008, which will analyze whether expendable and reusable 

launch vehicles should be regulated differently from each other, could 

provide FAA with information about the suitability of its regulations to 

space tourism. 

FAA is prohibited from regulating crew and passenger safety before 2012,

except in response to incidents that either pose a high risk or result in 

serious or fatal injury. FAA has interpreted this limited authority to allow 

it to regulate crew safety in certain circumstances and has been proactive

in proposing regulations concerning emergency training for crews and 

passengers. However, FAA has not developed safety indicators by which it 

 49GAO-05-468R and GAO-02-203. 

Page 39 GAO-07-16 Commercial Space Launches
would monitor the developing space tourism sector and determine when 

to step in and regulate human space flight. 

Because FAA is a regulatory agency, it is important that its statutory 

responsibility to promote the commercial space launch industry not 

interfere with its safety oversight of the industry. We have no evidence 

that FAA’s promotional activities have conflicted thus far with its safety 

regulatory role, but conflicts could occur as the industry matures. For 

example, such conflicts may have occurred or appeared to occur when 

FAA was responsible for promoting as well as regulating the airline 

industry. Recognizing the potential conflict in the oversight of commercial 

space launches, Congress required DOT to report by December 2008 on 

whether the federal government should separate the promotion of human 

space flight from the regulation of such activity. Furthermore, Commerce 

now has the staff resources to promote the commercial space industry, 

possibly eliminating the need for FAA to play a promotional role. 

If DOT’s 2008 commissioned report on the dual safety and promotion roles 

does not fully address the potential for a conflict of interest, Congress 

should revisit the granting of FAA’s dual mandate for safety and promotion 

and decide whether the elimination of FAA’s promotional role is necessary

to alleviate the potential conflict. 

To prepare for a possible major expansion in its safety oversight 

responsibilities resulting from the emergence of the space tourism 

industry and spaceports, we recommend that the Secretary of 

Transportation direct the FAA Administrator to implement the following 

three recommendations: 

Matter for 

Congressional 

Consideration 

Recommendations for 

Executive Action 

• As part of its strategic planning effort, FAA needs to assess the level of 

expertise and resources that will be needed to oversee the safety of the 

space tourism industry and the new spaceports under various scenarios 

and timetables. In addition, the Office of Commercial Space 

Transportation should develop a formal process for consulting with the 

Office of Aviation Safety about licensing reusable launch vehicles. The 

process should include the criteria under which the consultation takes 

place. 

• To allow the agency to be proactive about safety, rather than responding 

only after a fatality or serious incident occurs, FAA should identify and 

continually monitor space tourism industry safety indicators that might 

Page 40 GAO-07-16 Commercial Space Launches
trigger the need to regulate crew and flight participant safety before 2012. 

As part of this effort, FAA should develop and issue guidance on the 

circumstances under which it would regulate crew and flight participant 

safety before 2012. 

• As long as FAA has a promotional role, it should work with the 

Department of Commerce to develop a memorandum of understanding 

that clearly delineates the two agencies’ respective promotional roles in

line with their statutory obligations and larger agency missions. This 

memorandum of understanding should reflect Commerce’s role as an 

advocate of the industry, with the objective of increasing U.S. 

competitiveness and FAA’s focus on providing a safe environment in 

which the emerging space tourism sector could operate. 

We provided a draft of the report to Commerce, DHS, DOD, DOT, NASA, 

OSTP, State, and USTR. Commerce and NASA provided written comments 

(see apps. V and VI). State, DOD, and DHS had no comments. The four 

agencies that provided comments generally agreed with the findings 

presented in the report and FAA (within DOT) and Commerce agreed with 

the report’s recommendations. FAA, Commerce, OSTP, and USTR 

provided technical corrections, which we incorporated as appropriate. 

In response to the draft report’s discussion of resource challenges, FAA 

stated that it monitors commercial space launch developments to assess 

the impact on agency resources, and that it will request additional 

resources when they can be justified through the annual budget process. 

We agreed that FAA assesses resource requirements annually and added 

this information to the report; however, we have not seen evidence that it

does so on a longer-term, strategic basis. In response to the draft report’s 

discussion of the suitability of FAA’s expendable launch vehicle 

regulations for reusable launch vehicles, FAA explained that the regulation

is not intended to apply to reusable vehicles. We agreed with this comment 

and revised the draft to indicate the specific reusable launch vehicle

regulation to which we were referring. Commerce agreed with our 

recommendation concerning the need for a memorandum of 

understanding between it and DOT that clearly delineates the two 

agencies’ respective promotional roles. In addition, Commerce pointed out 

that the draft report did not reflect the industry advocacy role played by its 

International Trade Administration. We agreed and added that information 

to the report. OSTP stated that the report should include more discussion 

of competition challenges facing the industry. Although we agree that such 

challenges are important and addressed some competitive issues, such as 

Agency Comments 

and Our Evaluation 

Page 41 GAO-07-16 Commercial Space Launches
foreign price competition, a larger study of these issues was beyond the 

scope of the report. Finally, NASA noted that the draft report did not 

reflect the infrastructure support, such as wind tunnels and rocket 

propulsion test stands, that it provides to the commercial space launch 

industry. We agreed that this information should be included and modified 

the text accordingly. 

As agreed with your office, unless you publicly announce the contents of

this report earlier, we plan no further distribution of this report until 5 

days after the date of this letter. At that time, we will send copies of this 

report to interested congressional committees, the Secretary of 

Transportation, the Administrator of FAA, the Secretary of Defense, the 

Secretary of Commerce, the Secretary of State, the Administrator of the 

National Aeronautics and Space Administration, the Secretary of 

Homeland Security, the Assistant Secretary of Homeland Security for the 

Transportation Security Administration, the Director of the White House 

Office of Science and Technology Policy, and the Assistant U.S. Trade 

Representative for Policy Coordination. We will also make copies 

available to others upon request. In addition, the report will be available at 

no cost on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

on (202) 512-2834 or at dillinghamg@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix VII. 

Sincerely yours, 

Gerald L. Dillingham, Ph.D. 

Director, Physical Infrastructure Issues 

Page 42 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and Appendix I: Objective, Scope, and Methodology 

Methodology 

Our objective was to assess the federal role regarding commercial space 

launches and the government’s response to emerging industry trends 

both—domestically and internationally. To accomplish this, we addressed 

the following questions: (1) how well does the Federal Aviation 

Administration (FAA) oversee the safety of commercial space launches? 

(2) To what extent is FAA responding to key emerging issues in the 

commercial space launch industry? (3) What challenges does FAA face in 

regulating and promoting the commercial space launch industry? and (4) 

What are the key competitive issues affecting the U.S. commercial space 

launch industry, and to what extent are the industry and government 

responding to them? 

For background information on the commercial space launch industry, we 

reviewed reports prepared by the Congressional Research Service, FAA, 

the Department of Commerce (Commerce), and other sources to 

determine the composition of the industry and its role in the economy. We 

also obtained data on historical commercial launch activity worldwide, 

including the number of commercial space launches conducted, by 

country, from 1997 through 2005; the types of vehicles used; and the types 

of payloads launched. We did not independently verify this information 

because it was used for background purposes only. In addition, we 

identified the commercial launch infrastructure in the United States and 

observed the commercial launch facilities at Cape Canaveral Air Force 

Station and Vandenberg Air Force Base, which are the two main federal

launch facilities. We also determined the roles and responsibilities of 

various federal agencies involved in commercial space launch activities by

reviewing their respective statutory authorities and interviewing agency

officials. These included officials from FAA, Commerce, the National 

Aeronautics and Space Administration (NASA), the Department of 

Defense (DOD), the Department of State, the Department of Homeland 

Security, the Office of the United States Trade Representative, and the

Office of Science and Technology Policy. 

To determine how well FAA has overseen the safety of commercial space 

launches to date and to what extent it is responding to key emerging 

issues in the commercial space launch industry, we reviewed FAA’s safety 

oversight processes, identified key emerging issues in the commercial 

space launch industry, and reviewed FAA’s response to those issues. We 

reviewed FAA’s safety oversight process by interviewing agency officials 

about their safety oversight activities and reviewed documentation on 

FAA’s licensing and safety monitoring processes, including internal 

guidance and policies, applicable regulations, and memorandums of 

agreement with other federal agencies. Because FAA shares responsibility 

Page 43 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and 

Methodology 

with the Department of the Air Force to conduct safety oversight at the Air 

Force’s launch sites, we interviewed FAA and Air Force officials at Cape 

Canaveral Air Force Station and Vandenberg Air Force Base about their 

interaction and respective responsibilities, and reviewed Air Force launch 

safety requirements. We also interviewed representatives from eight 

commercial space launch companies that had received launch licenses 

from FAA and six launch companies that were consulting with FAA about 

obtaining licenses as of September 2005 about FAA’s licensing process. We 

also interviewed an official heading a working group on reusable launch 

vehicles from the Commercial Space Transportation Advisory Committee, 

which is an industry group that provides advice to FAA on commercial 

launch issues. This official is also a key principal of the Personal 

Spaceflight Federation, which is an industry group. When we found that 

some companies were offering to sell tickets for flights into space, we also 

interviewed two firms that were selling such tickets or were planning to 

sell them about their services and related safety issues. In addition, 

because security is a component of safety, we interviewed officials from 

the Transportation Security Administration about its future role in 

securing new spaceports. 

To further assess how well FAA has overseen the safety of commercial 

space launches and because FAA conducts its safety oversight largely 

through its licensing process, we reviewed its application files for the 

licenses that were in effect in January 2006, which consisted of 13 launch

licenses and five launch-site licenses. In addition, although its license was 

no longer in effect at the time of our review, we reviewed the application 

file for Scaled Composites’ launch of SpaceShipOne because the company 

had received the first license from FAA for a reusable vehicle. We 

reviewed these application files to determine the types of FAA safety 

issues that the agency examined and how it conducted those 

examinations. Because we were evaluating the management of a 

government program, we examined (1) how FAA applied certain 

management controls in its license approval process using our guidelines

for management controls at federal agencies and (2) whether FAA met the 

180-day review criteria established by the 1984 Commercial Space Launch

Act.1

 The management controls included documentation of the review 

process, effective communication, reliability and verification of data, 

 1

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: August 2001); Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999); and the Commercial Space 

Launch Act, Pub. L. No. 98-575 (Oct. 30, 1984).

Page 44 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and 

Methodology 

supervisory review, and documentation of the approval process, which we 

determined from consulting Standards for Internal Control in the Federal 

Government for the elements needed for effective management of the 

licensing approval process. Furthermore, we assessed the extent to which

FAA interacted with other federal agencies participating in an interagency

advisory group on expendable vehicles, which was part of the application 

review process in some cases, by interviewing the interagency group 

members about their interaction with FAA on commercial launch issues. 

In addition, we reviewed FAA’s safety monitoring process by examining its 

most recent compliance-monitoring reports that corresponded to the 

licenses that were in effect as of January 2006,2

 as well as enforcement 

actions taken against commercial launch companies for noncompliance 

with safety issues. Moreover, to obtain an independent perspective on how 

well FAA has conducted launch safety oversight and responded to key 

emerging issues, we interviewed 11 experts from academia and industry 

that we selected with the assistance of the National Academy of Sciences. 

(See table 3 for a list of these experts.) 

Table 3: Experts Providing Input on GAO’s Review 

Expert Organization

Robert Crippen, President, retired Thiokol Propulsion Group 

Donald Cromer, Lt. General and President, retired United States Air Force and Hughes Space and Communications Company 

Henry Hertzfeld, JD, Ph.D., Research Professor The Space Policy Institute, Elliot School of International Affairs, George 

Washington University 

Michael S. Kelly, Vice President, Operations X PRIZE Cup 

Christopher Kunstadter, Vice President XL Insurance 

Molly Macauley, Ph.D., Senior Fellow Resources for the Future, Inc. 

James A. M. Muncy, Principal PoliSpace 

Elon Musk, CEO and CTO SpaceX 

Eligar Sadeh, Ph.D., Assistant Professor of Space 

Studies 

School of Aerospace Sciences, Department of Space Studies, University of 

North Dakota 

J.R. Thompson, Vice Chairman, President and 

Chief Operating Officer 

Orbital Sciences Corporation 

Source: GAO.

Note: One expert asked to remain anonymous. 

 2

In some cases, launch activity had not yet occurred after the licenses were issued; 

therefore, monitoring reports had not yet been prepared. 

Page 45 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and 

Methodology 

We identified key emerging issues through literature reviews and 

interviews with agency officials and industry representatives, including 

associations representing the commercial space launch industry and 

entities that had received launch or launch-site licenses from FAA or were

consulting with FAA about receiving such licenses as of September 2005. 

To assess the extent to which FAA has responded to emerging issues in 

the commercial space launch industry, we interviewed federal government 

officials, including FAA officials and representatives from federal launch

sites and FAA-licensed and proposed spaceports, launch companies, 

industry experts, and trade associations to obtain their views. See table 4 

for a list of the organizations that we interviewed.

Table 4: List of Organizations That GAO Interviewed

Industry category Organization interviewed 

Federal launch sitesaCape Canaveral Air Force Station 

Ronald Reagan Ballistic Missile Test Site 

Vandenberg Air Force Base 

Industry associations Aerospace Industry Association 

American Institute of Aeronautics and Astronautics 

Satellite Industry Association 

Space Frontier Foundation 

Space Transportation Association 

Launch companies Arianespace 

Armadillo Aerospace 

ATK Thiokol, Inc. 

Blue Origin, LLC 

Boeing Launch Services 

Boeing Launch Services, Cape Canaveral Air Force Station

Interorbital Systems 

Kistler Aerospaceb 

Lockheed Martin Corporation, Cape Canaveral Air Force Station 

Rocketplane Limited, LLCb 

Scaled Composites, LLC 

Sea Launch Company, LLC 

SpaceX 

Sprague Astronautics, Inc. 

XCOR Aerospace 

Page 46 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and 

Methodology 

Industry category Organization interviewed 

Spaceports Alaska Aerospace Development Authority 

California Spaceport, Spaceport Systems International 

Florida Space Authority 

Mid-Atlantic Regional Spaceport 

Mojave Spaceport 

Oklahoma Space Industry Development Agency 

Spaceports (proposed) Blue Origin, LLC 

Nevada Test Site Development Corporationc

New Mexico Office for Space Commercialization 

Office of the Governor, Aerospace and Aviation/Gulf Coast Regional Spaceport, Texas 

Office of the Governor, Aerospace and Aviation/South Texas Spaceport 

Office of the Governor, Aerospace and Aviation/West Texas Spaceport 

Spaceport Alabama 

Spaceport Washington 

Wisconsin Spaceport 

Space tourism operators Space Adventures 

Virgin Galactic

Miscellaneous Aerospace Corporation

California Space Authority 

RAND Corporation 

Source: GAO.

a

We did not interview two federal launch sites—White Sands Missile Range and Wallops Flight 

Facility—because they have had no commercial launches since 2000. 

b

In February 2006, Rocketplane and Kistler Aerospace joined to form Rocketplane Kistler. 

c

As of March 2006, the Nevada Test Site Development Corporation told us that it was no longer 

considering developing a spaceport. 

We also reviewed the proposed and issued regulations relating to 

commercial space launches and comments published in the Federal 

Register on those regulations to assess how the agency had responded to 

the emerging issues. 

To determine the challenges that FAA faces in responding to emerging 

issues in the commercial space launch industry, we interviewed FAA 

officials, industry representatives, industry experts, and trade associations

to obtain their views on how FAA would need to respond and the level of

expertise and resources that would be required. This included considering 

the challenges that FAA may face in complying with requirements 

contained in both proposed regulations and under existing law to provide 

Page 47 GAO-07-16 Commercial Space Launches
Appendix I: Objective, Scope, and 

Methodology 

safety oversight over a new industry sector involving reusable launch

vehicles. 

To determine the key competitive issues affecting the U.S commercial 

space launch industry and the extent to which the industry and federal 

government are responding to them, we conducted a literature review that 

included applicable laws affecting industry competitiveness and 

interviewed FAA officials, industry representatives, industry experts, and

trade associations to obtain their views. This included interviewing 

officials from the Office of the U.S. Trade Representative about the U.S. 

government’s past use of bilateral treaties with foreign governments 

regarding the commercial space market and from the Commercial Space 

Transportation Advisory Committee, which is an industry group that 

provides advice to FAA on commercial launch issues, about industry 

concerns regarding insurance and liability matters. We also interviewed 

U.S. commercial space launch companies, including U.S. partners in 

international partnerships. In addition, to obtain the perspective of a 

foreign commercial launch company on international competitive issues, 

we interviewed an official from Arianespace, which is a French 

commercial space launch company. To obtain the perspective of a 

domestic commercial launch company, we interviewed SpaceX. We also 

reviewed regulations affecting the competitiveness of the commercial 

space launch industry, such as the International Traffic in Arms 

Regulations, and reports on competitive issues prepared by the 

Congressional Research Service, FAA, Commerce, Futron, and others. We 

attempted to compare the extent to which countries were providing 

financial assistance to their commercial space launch industries, but we 

were unable to obtain transparent and quantifiable data. We conducted

our review from August 2005 through October 2006 in accordance with 

generally accepted government auditing standards. 

Page 48 GAO-07-16 Commercial Space Launches
Appendix II: E

Commer

conomic Impact of the 

cial Space Industry 

Page 49 GAO-07-16

Appendix II: Economic Impact of the 

Commercial Space Industry 

The commercial space transportation industry as a whole represents a 

significant sector of the U.S. economy. The industry consists of the 

commercial launch industry as well as the industries that commercial 

space enables, such as satellite manufacturing and services, ground 

equipment manufacturing, remote sensing, distribution industries, and 

launch vehicle manufacturing and services (see fig. 7). 

Figure 7: Commercial Space-Related Industries 

Launch vehicle

manufacturing

and services

Satellite

manufacturing

Ground

equipment

manufacturing

Satellite

services

Remote

sensing

Distribution

industries

Includes the construction of U.S. commercial launch vehicles and the provision of U.S. 

commercial launch services.

Includes the sale of all commercial satellites constructed by U.S. satellite manufacturers.

Includes satellite-related hardware, such as gateways and satellite control stations; mobile 

uplink equipment; very small aperture (VSAT) terminals; and consumer electronics used with 

satellite services, such as direct broadcast satellite dishes, telephone booths, and handheld 

telephones.

Includes both end-user services and transponder leasing. End-user services include satellite 

telephony, VSAT services, satellite data services, and direct-to-home television. Satellite data

services include mobile data services, such as asset tracking and high-speed internet services. 

Transponder leasing includes services offered by companies that operate satellites and lease or 

sell satellite transponder capacity on a full-time or occasional-use basis.

Includes the provision of raw satellite data and satellite imagery services. It does not account for 

sales by firms that digitally process imagery and combine it with additional information to create 

maps, databases, or other value-added products.

Represent wholesale and retail trade margins and transit costs incurred as components are 

moved to manufacturing sites. Distribution industries are considered an additional enabled 

industry of commercial space transportation because truck, air, and rail transportation services

are required to move parts to the manufacturing sites and to move launch vehicles and satellites

to launch sites.

Source: FAA.

Industry Sector Description 

 Commercial Space Launches
Appendix II: Economic Impact of the 

Commercial Space Industry 

According to FAA, the commercial space transportation and enabled

industries were responsible for approximately 550,000 total jobs and 

$98 billion in economic activity1

 in the United States in 2004, with the 

satellite services industry, such as direct-to-home television services, 

having the largest economic activity impact (see fig. 8). Of this, launch 

vehicle manufacturing and services had $1.7 billion in economic impact. 

 1

Each measure of economic impact comprises three components—direct impacts, indirect

impacts, and induced impacts. Direct impacts are the expenditures on inputs and labor 

involved in the provision of any final goods or services relating to the industries analyzed; 

indirect impacts involve the purchases made by and labor supplied by the industries that 

provide inputs to the launch and enabled industries; and induced impacts are the

successive rounds of increased household spending that result from the direct and indirect

impacts (e.g., a launch vehicle engineer’s increased spending on household goods and

services). 

Page 50 GAO-07-16 Commercial Space Launches
Appendix II: Economic Impact of the 

Commercial Space Industry 

Figure 8: Distribution of Economic Activity Impacts Resulting from Commercial 

Space Transportation and Enabled Industries, 2004 

0.7%

Remote sensing

32.3%

57.6%

Source: GAO analysis of FAA data.

1.7%

Launch vehicle manufacturing and 

services

3.5%

Satellite manufacturing

4.2%

Distribution industries

Ground equipment manufacturing

Satellite services

Page 51 GAO-07-16 Commercial Space Launches
Appendix III: F

Lice

AA’s Launch and Reentry

nsing Process 

Page 52 GAO-07-16

Appendix III: FAA’s Launch and Reentry 

Licensing Process 

FAA evaluates applications for launch licenses by reviewing the safety, 

environmental, payload, and policy implications of a launch and 

determining the launch company’s insurance liability or financial 

responsibility. Figure 9 illustrates this process. 

Figure 9: FAA’s Launch Licensing Process 

Preapplication

consultation Application License

determination

Compliance

monitoring if

license granted

Safety review

Environmental

review

Payload review

Policy review

Financial

responsibility

determination

Source: GAO presentation of FAA information.

FAA’s safety review includes an analysis of the reliability and functions of 

the vehicle, an assessment of the risk and hazards it poses to public 

property and individuals, and a review of the launch company’s policies

and practices to demonstrate that the operations “pose no unacceptable 

threat to the public.”1

 FAA conducts environmental reviews to fulfill its 

obligations under the National Environmental Policy Act,2

 and FAA 

 1

FAA’s safety review of a license includes the review of data provided by the license 

applicant on the proposed flight path of the launch vehicle and a determination of its

potential risk to the noninvolved public and property. Federal launch sites conduct their

own risk analysis, which FAA reviews. 

2

The issuance of a license is considered to be a major federal action defined under the

National Environment Policy Act, 42 U.S.C. 4332. Therefore, a license applicant must 

comply with requirements stated in the National Environment Policy Act, the Council on 

Environmental Quality Regulations for Implementing the Procedural Provisions of the

National Environment Policy Act, 40 C.F.R. parts 1500-1508, and the FAA’s Procedures for 

Considering Environmental Impacts, FAA Order 1050.1D. 

 Commercial Space Launches
Appendix III: FAA’s Launch and Reentry

Licensing Process 

ensures that proposed commercial space transportation activities present 

“no unacceptable danger to the natural environment.” In addition, FAA 

reviews a proposed payload to determine whether its launch or reentry 

would jeopardize public health and safety, safety of property, U.S. national 

security or foreign policy interests, or international obligations of the 

United States. During the policy review, FAA consults with other federal 

agencies to determine whether the launch license presents any issues 

affecting U.S. national security, foreign policy, or international obligations. 

FAA also determines the amount of liability insurance3

 required to 

compensate third-parties for activities carried out under a license, up to a 

maximum of $500 million or the maximum liability insurance available on 

the world market at a reasonable cost as determined by FAA.

4

 FAA also 

sets insurance requirements for U.S. government range property on the 

basis of its determination of the maximum probable loss that would result 

from licensed launch or reentry activities, not to exceed the lesser of $100 

million or the maximum available on the world market at reasonable cost. 

FAA’s launch-site safety requirements are similar to those for launches of 

vehicles. FAA reviews a launch-site’s application for environmental, 

policy, operations, and safety considerations that include the location of 

the spaceport and its siting of explosives. Applicants also are required to 

address how they will control public access to their sites, which would 

include the use of security personnel, surveillance systems, physical 

barriers, or other means approved during the licensing process. 

 3

Under the 2004 Commercial Space Launch Amendments Act, license holders must provide 

liability insurance to cover their licensed activities. The calculation of the amount of 

insurance required is based on a maximum probable loss determination, which is an 

assessment of the maximum monetary losses likely to be incurred by government and 

third-party personnel and property in the event of a mishap. 

4

This liability insurance is separate from indemnification that FAA provides for commercial 

launches.

Page 53 GAO-07-16 Commercial Space Launches
Appendix IV: Timeline and List of FAA 

Commercial Space Launch Rulemaking and Appendix IV Guidance : Timeline and List of FAA 

Commercial Space Launch Rulemaking and 

Guidance 

Licensing and Safety Requirements for Launch; Final Rule (to amend 14 

C.F.R. parts 413, 415, 417). 71 Fed. Reg. 50508. August 25, 2006 

Experimental Permits for Reusable Suborbital Rockets; Notice of 

Proposed Rulemaking (to amend 14 C.F.R. parts 401, 404, 405, 406, 413, 

420, 431, 437). 71 Fed. Reg. 16251. 

March 31, 2006 

Human Space Flight Requirements for Crew and Space Flight Participants; 

Proposed Rule (to amend 14 C.F.R. parts 401, 431, 435, 440, 450, 460). 70

Fed. Reg. 77262. 

December 29, 2005 

Reusable Launch and Reentry Vehicle System Safety Process, AC 431.35-

2A; Advisory Circular. July 20, 2005 

Safety Approvals; Proposed Rule (to amend 14 C.F.R. part 414). 70 Fed.

Reg. 32912. June 1, 2005 

Miscellaneous Changes to Commercial Space Transportation Regulations;

Proposed Rule (to amend 14 C.F.R. parts 401, 404, 413, 415, 420). 70 Fed. 

Reg. 29164. 

May 19, 2005 

Licensing and Safety Requirements for Launch; Availability of Draft 

Regulatory Language and Notice of Public Meeting (to amend 14 C.F.R. 

parts 415, 417). 70 Fed. Reg. 9885. 

March 1, 2005 

Commercial Space Transportation; Suborbital Rocket Launch; Notice and

Request for Comments. 68 Fed. Reg. 59977. 

October 20, 2003 

Licensing Test Flight Reusable Vehicle Missions, AC 431.35-3; Advisory 

Circular. 

August 15, 2002 

Licensing and Safety Requirements for Launch; Proposed Rule (to amend 

14 C.F.R. parts 413, 415, 417). 67 Fed. Reg. 49456. (This is a supplemental 

Notice of Proposed Rulemaking to the October 25, 2000, Proposed Rule.) 

July 30, 2002 

Civil Penalty Actions in Commercial Space Transportation; Final Rule (14 

C.F.R. parts 405, 406). 66 Fed. Reg. 2176. 

January 10, 2001 

Licensing and Safety Requirements for Launch; Proposed Rule (to amend 

14 C.F.R. parts 413, 415, 417). 65 Fed. Reg. 63921.

October 25, 2000 

Licensing and Safety Requirements for Operation of a Launch Site; Final 

Rule (14 C.F.R. parts 401, 417, 420). 65 Fed. Reg. 62812. 

October 19, 2000 

Page 54 GAO-07-16 Commercial Space Launches
Appendix IV: Timeline and List of FAA 

Commercial Space Launch Rulemaking and 

Guidance 

Commercial Space Transportation Reusable Vehicle and Reentry Licensing 

Regulations; Final Rule (14 C.F.R. parts 400-435). 65 Fed. Reg. 56618. September 19, 2000 

Financial Responsibility Requirements for Licensed Reentry Activities; 

Final Rule (14 C.F.R. part 450). 65 Fed. Reg. 56670. 

September 19, 2000 

Expected Casualty Calculations for Commercial Space Launch and 

Reentry Missions, AC 431.35-1; Advisory Circular. August 30, 2000 

Small-Scale Rockets; Notice of Public Meeting (to solicit comments on 

possible FAA regulation of small-scale rocket launches). 64 Fed. Reg. 

73597. 

December 30, 1999 

August 16, 1999 License Application Procedures, AC 413-1; Advisory Circular. 

Commercial Space Transportation Licensing Regulations; Final Rule (14 

CFR parts 401, 411, 413, 415, 417). 64 Fed. Reg. 19586. April 21, 1999 

November 3, 1998 Part 440 Insurance Conditions, AC 440-1; Advisory Circular. 

Commercial Space Transportation Financial Responsibility Requirements 

for Licensed Launch Activities; Final Rule (14 C.F.R. part 440). 63 Fed. 

Reg. 45592. 

August 26, 1998 

Commercial Space Transportation Licensing Regulations; Final Rule (14 

C.F.R. Ch. III). 53 Fed. Reg. 11004. 

April 4, 1988 

Page 55 GAO-07-16 Commercial Space Launches
Appendix V: Comments from the Department Appendix V of Commerce : Comments from the Department 

of Commerce 

Page 56 GAO-07-16 Commercial Space Launches
Appendix V: Comments from the Department 

of Commerce 

Page 57 GAO-07-16 Commercial Space Launches
Appendix V: Comments from the Department 

of Commerce 

Page 58 GAO-07-16 Commercial Space Launches
Appendix V: Comments from the Department 

of Commerce 

Page 59 GAO-07-16 Commercial Space Launches
Appendix VI: Comments from the National Appendix VI: Comments from the National Aeronautics and Space Administration 

Aeronautics and Space Administration 

Page 60 GAO-07-16 Commercial Space Launches
Appendix VI: Comments from the National 

Aeronautics and Space Administration 

Page 61 GAO-07-16 Commercial Space Launches
Appendix VII: 

A

GAO Contact and Staff 

cknowledgments 

Page 62 GAO-07-16

Appendix VII: GAO Contact and Staff 

Acknowledgments 

Gerald L. Dillingham, Ph.D., (202) 512-2834 or dillinghamg@gao.gov

In addition to the contact named above, Teresa Spisak (Assistant 

Director), Maureen Luna-Long, Bob Homan, Ashley Alley, Elizabeth 

Eisenstadt, Jim Geibel, Dave Hooper, Rosa Leung, Sara Ann Moessbauer, 

Josh Ormond, and Sandra Sokol made key contributions to this report. 

 Commercial Space Launches

GAO Contact 

Staff 

Acknowledgments 

(540111) 
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