Commercial Space: FAA Should Examine How to Appropriately Regulate Space Support Vehicles
Published: 2016-11-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the commercial space transportation industry has grown significantly in the last decade, a related industry has emerged that plans to complement the commercial space industry by using vehicles called space support vehicles to conduct space-related activities, but not launch into space.
The U.S. Commercial Space Launch Competitiveness Act of 2015 includes a provision for GAO to review the uses for space support vehicles and services and any barriers to their use. This report addresses stakeholder views on (1) potential uses for space support vehicles, (2) challenges that companies may face when attempting to use these vehicles, and (3) how these vehicles should be regulated. GAO reviewed prior GAO and industry reports, relevant laws and regulations, and interviewed officials on two proposals for regulating space support vehicles. GAO interviewed officials at FAA and the National Aeronautics and Space Administration and 37 legal experts and stakeholders from industry organizations, launch companies, space support companies, and spaceports—identified by agency and industry officials.
section_title: What GAO Found
paragraphs: Company officials GAO interviewed identified potential uses for “space support vehicles”—which include a variety of aircraft from high-performance jets to balloons and the aircraft portion of a hybrid launch systems (a vehicle that contains elements of both an aircraft and a rocket-powered launch vehicle)—but the size of the market for these uses is unclear. Company officials said they plan to use space support vehicles to train spaceflight participants and to conduct research in reduced gravity environments. For example, some company officials said they would like to use high-performance jets to train future spaceflight participants by exposing them to physiological and psychological effects encountered in spaceflight. Other company officials said they would like to use space support vehicles to research how objects or people react in reduced gravity environments. It is difficult to know the size of the market for spaceflight training and research as GAO found no studies on these markets. However, stakeholders said they expect interest in research to increase.
Some company officials said the Federal Aviation Administration's (FAA) regulatory framework presents a market challenge because companies cannot get FAA approval to use the aircraft they would like to use to carry passengers or cargo for compensation, thus limiting their ability to operate in the market. FAA's Office of Aviation Safety (AVS) regulates aircraft that companies would like to use as space support vehicles by issuing standard and experimental certificates that help ensure safety. While officials from two companies GAO interviewed have received standard aircraft certification for their space support vehicle, others said the standard certification process is lengthy and not designed for the type of vehicles they would like to use, such as unique, single-production aircraft or retired military jets. In addition, FAA regulations do not allow companies to receive compensation for carrying people or property on an aircraft operating under an experimental certificate. As a result, some of the companies we interviewed have training operations in other countries where they can receive payment for the activity. Further, FAA's Office of Commercial Space Transportation (AST)—the office that regulates commercial space activities—is only authorized to regulate commercial space activities, such as launches, focusing on the safety of third parties. According to FAA officials, a statutory or regulatory change would be needed to allow companies to use space support vehicles that do not meet AVS's standard certification requirements for compensation.
Stakeholders GAO interviewed have mixed views on how FAA should regulate space support vehicles; some companies believe the current regulatory approach is appropriate, while others believe the system should be changed in the face of new technology and commercial space development. While FAA has taken steps to assess the licensing and permitting process for hybrid launch vehicles, it has not assessed whether space support vehicles are needed and if it should propose changes that would accommodate all aircraft that could be used as space support vehicles. Thus, some U.S. company officials said they are delaying investments in space support vehicles, and therefore, it is uncertain if they will be able to use them to meet the future needs of the commercial space transportation industry.
section_title: What GAO Recommends
paragraphs: The Secretary of the Department of Transportation (DOT) should direct the FAA Administrator to fully examine and document whether the FAA's current regulatory framework is appropriate for space support vehicles and, if not, suggest legislative or regulatory changes, or both, as applicable. DOT provided technical comments; however, it did not comment on the recommendation at this time.

section_title: Letter
paragraphs: The U.S. commercial space industry has seen significant development in  the past decade, generating hundreds of millions of dollars in revenue by  launching satellites and other payloads into space while working toward  developing space tourism. More recently, a related industry has emerged  that is planning to complement the commercial space industry primarily  by using a variety of aircraft, from high-performance jets to balloons and  hybrid launch vehicles, to conduct space-related activities but not launch  into space. For example, these companies plan to use aircraft to test  equipment bound for the international space station, conduct microgravity  research, and train future space flight participants (or tourists) hoping to  ride in future commercial launch vehicles.
Due to an interest in identifying the best way to regulate and at the same  time develop a space support industry, the U.S. Commercial Space  Launch Competitiveness Act includes a provision for us to look at the  use of space support services and vehicles and any barriers to their use.  There is, however, neither a regulatory nor a statutory definition nor an  agreed-upon industry definition of space support services or space  support vehicles. We use the term “space support vehicles” to refer to  aircraft used in support of commercial space activities, but not as part of a  launch. This report discusses stakeholders’ views on: potential uses for space support vehicles in the commercial space  challenges companies face as they attempt to use space support  vehicles, and approaches for regulating space support vehicles.
To address all of the objectives, we interviewed commercial space- industry stakeholders, including officials from the Federal Aviation  Administration’s (FAA) Offices of Commercial Space Transportation and  Aviation Safety and the Congressional Research Service as well as 37  commercial space-industry stakeholders, including representatives of 13  launch companies, 9 space support service providers, and 5  spaceports. We attended a Commercial Space Transportation Advisory  Committee (COMSTAC) meeting and interviewed industry organizations  including the Commercial Spaceflight Federation and the Aerospace  Industries Association. We also conducted a site visit to Florida, which we  selected based on the location of commercial space companies, and met  with officials from Space Florida, a spaceport, and a space support- service provider. We identified stakeholders by asking for a list of  potential stakeholders from FAA’s Office of Commercial Space  Transportation and the Commercial Spaceflight Federation as well by  identifying stakeholders from our previous work on commercial space. We  contacted these stakeholders and identified additional stakeholders  through a snowball technique in which stakeholders identified additional  contacts during interviews. We approached all companies and individuals  on the list and scheduled interviews with interviewees who responded.  The results of these interviews are non-generalizable. For a full list of  stakeholders we interviewed, see appendix I.
To identify the commercial space industry’s potential uses for space  support vehicles, we also reviewed prior GAO reports on commercial  space issues, FAA’s Annual Compendium of Commercial Space  Transportation, a National Research Council report requested by the  National Aeronautics and Space Administration (NASA) related to  astronaut training, and industry reports on the commercial space  market. We interviewed officials from NASA to learn about astronauts’  training techniques that would inform spaceflight participants’ training  techniques. To identify challenges that companies face when attempting  to use space support vehicles, we reviewed relevant laws and regulations  and interviewed three individuals who teach at institutions of higher  education and whom we interviewed through an Internet search on  academic space-law programs and from prior work to obtain perspectives  on the legal issues involved with space support vehicles. To obtain  stakeholder views on how space support vehicles should be regulated,  we interviewed FAA officials on their developing proposal on the  regulation of hybrid launch vehicles used in non-launch and non-reentry  activities and Commercial Space Federation officials on their thoughts on  the regulation of space support vehicles. We also reviewed the Standards  for Internal Control in the Federal Government to identify how internal  control systems should address changing conditions and compared  pertinent standards with FAA’s efforts to adapt its regulations to changing  technology and business plans in the commercial space support sector.
We conducted this performance audit from February 2016 through  November 2016 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Although little is known about the emerging space support vehicle  industry, the U.S. commercial space-launch industry generated $617  million in revenue in 2015 and has experienced significant growth in the  past half-decade. FAA reported that its licensed launches have increased  60 percent and industry revenue has increased 471 percent since 2012.  We’ve previously reported that the industry has experienced growth in the  number and complexity of launches and growth in demand for space  launches. Furthermore, the industry is developing new types of reusable  launch vehicles, which could reduce launch costs.
Components of the U.S. commercial space transportation industry  include:
Launch Companies: These companies launch satellites or other  payloads into space. Their clients include governments, other  companies, and individuals. Currently, the industry is launching non- human payloads using rockets and has yet to launch space flight  participants. At the same time, some launch companies are  developing hybrid launch systems, which contain elements of both  aircraft and rocket-powered vehicles. Companies we interviewed  plan to use these vehicles—which take off as an aircraft and then  launch the spacecraft once reaching a certain altitude—to launch non- human payloads and to transport spaceflight participants to space.  For example, WhiteKnightTwo plans to carry Virgin Galactic’s  SpaceShipTwo aircraft to an altitude of 50,000 feet where it will air  launch SpaceShipTwo and the participants on board into space.  According to representatives of launch companies we interviewed,  while most of launch companies’ current activities are focused on  launches, they may also use the aircraft component of a hybrid launch  system for non-launch activities. For example, Virgin Galactic has also  considered using WhiteKnightTwo to carry scientific payloads into  conditions that would simulate spaceflight.
Spaceports: Spaceports are FAA-licensed launch or reentry sites  used for commercial space launches and reentries that are developed  by private companies and/or states. Spaceports can be co-located  with federal sites or commercial or general aviation airports.  Spaceports generally include launch pads and runways as well as  other infrastructure, such as hangar space, and services, such as  emergency services to be used by commercial space companies. As  of June 2016, there were 10 FAA-licensed nonfederal launch sites.
Space Support Companies: This category includes companies whose  business plans focus on training future spaceflight participants. This  training simulates conditions encountered in space and can either be  accomplished on the ground using pools and centrifuges or in the air  using aircraft, hence the interest of companies in the commercial  space support vehicle industry. In addition to training, space support  companies offer or plan to offer other services, such as carrying  scientific payloads for micro gravity experiments and repositioning  cargo from one location to another through the air.
FAA’s Office of Aviation Safety (AVS) oversees civil aviation activities in  the United States. Thus, it regulates aircraft that may be used for space  support activities. AVS is responsible for certifying the airworthiness of  aircraft, pilots, mechanics, and others whose work affects the safety of  those aircraft. When certifying aircraft, AVS inspectors review aircraft  engines, propellers, parts, and equipment, including avionics, to provide a  reasonable expectation of safety. In addition, AVS is responsible for  certifying all operational and maintenance enterprises in domestic civil  aviation. In fiscal year 2016, AVS had 7,246 full-time equivalent (FTE)  employees and a budget of $1.26 billion.
The Office of Commercial Space Transportation (AST) is the office within  the FAA responsible for overseeing and coordinating the conduct of  commercial launch and reentry operations and issuing and transferring  licenses and permits authorizing such activities. Unlike AVS, AST has a  dual mandate to (1) protect the public health and safety (people not  participating in the launch, i.e., third parties), the safety of property, and  national security and foreign policy interests of the United States during  commercial launch and reentry activities and (2) encourage, facilitate, and  promote U.S. commercial space transportation. The Commercial Space  Launch Amendments Act of 2004 instructed the Department of  Transportation (DOT) to promote the continuous improvement of the  safety of launch vehicles designed to carry humans. Prior to launch,  space flight participants must provide written consent to participate. In  fiscal year 2016, AST had 92 FTE employees and a budget of $17.8  million.
section_title: Stakeholders Identified Potential Uses for Space Support Vehicles, but the Size of the Market Is Unclear
subsections: section_title: Industry Stakeholders Discussed Uses for Space Support Vehicles— Spaceflight Participant Training and Research
subsections: section_title: Spaceflight Participant Training
paragraphs: Stakeholders identified spaceflight participant training as one potential  use for space support vehicles. FAA regulations require only minimal  training for spaceflight participation. Specifically, operators are required to  train each space flight participant how to respond to emergency  situations, such as smoke, fire, and the loss of cabin pressure.  However, some companies are interested in providing training beyond the  minimal requirements to potential space flight participants.
Stakeholders we interviewed disagreed on the best way to train future  spaceflight participants. Some industry stakeholders (13 of 37) told us  that future space flight participants will need to receive training in high- performance aircraft. Specifically, 4 of 9 space support companies, 3 of  13 launch companies, 2 of 5 spaceports, and 4 of 10 other stakeholders  argued that it is necessary for customers to fully understand what they will  experience and the only way to replicate this is through training in high- performance jets. Stakeholders explained that factors that can be  simulated in high performance jets but not through other means include  the stress of a confined environment and exposure to the physiological  and psychological effects of spaceflight. Further, four stakeholders said  this training is necessary to become acquainted with g-forces involved  with spaceflight and that space support vehicles are best able to provide  this training. NASA officials also stated that familiarization with and  experiencing high-g environments while performing time critical  communication is important preparation for spaceflight participants.  See  figure 2 for examples of space support vehicles, including high- performance jets (on left) and the modified Boeing 727 (on right). In  addition, six stakeholders explained that due to the high cost of  spaceflight, getting this experience would be important for someone who  is considering space tourism. However, as discussed below this training  currently is not available in the U.S.
On the other hand, 13 stakeholders report training can be accomplished  through currently allowed means, including standard certified aircraft and  ground based training. Five of 9 space support companies, 5 of 13 launch  companies, and 3 of 10 other stakeholders reported that it is critical to  expose future spaceflight participants to the conditions they will encounter  in space, but these conditions can be replicated through means other  than high-performance jets. Two space support companies said they  provide ground-based training through centrifuges, pools, and instruction  in space-related topics such as the physiological and psychological  effects of space travel. One launch company reported to us that  spaceflight participants will only need to know how they will react to  microgravity but will not need to know how to accomplish tasks in  microgravity. According to some stakeholders, this acclimation to  microgravity can be accomplished through parabolic flight, centrifuges,  and pools. One company is currently offering a microgravity experience  in a Boeing 727 with an interior that has been modified to accommodate  passengers to this activity, and another company has considered entering  this market with a similar aircraft. Two of 13 launch companies reported  they do not anticipate a high training burden for future customers and  thus would probably not utilize aircraft training or centrifuges.
The remaining 12 of the 37 stakeholders we interviewed did not comment  on this issue.
Further, stakeholders representing spaceports have proposed that  spaceports are the proper place to host spaceflight participant training.  Spaceport stakeholders we interviewed said that spaceports provide  runways, launch pads, hangars, and other services such as emergency  response services for commercial space-transportation companies. As  mentioned above, representatives of two of the five spaceports we spoke  to thought space flight training should be provided in high-performance  jets. Two stakeholders we interviewed at spaceports also expressed  interest in hosting companies that provide spaceflight participant training  and see it as a potential source of new revenue, either now or when the  tourism industry evolves and sends customers into space. One spaceport  operator we interviewed sees spaceflight participant training as  economically beneficial for the communities surrounding spaceports.
section_title: Research on the Effects of Zero Gravity
paragraphs: In addition to spaceflight participant training, some stakeholders we spoke  to identified microgravity research as a potential use for space support  vehicles. Microgravity research uses reduced gravity to understand how  objects or people will react in reduced gravity environments (such as  orbit). Microgravity can be provided through parabolic flights. NASA  officials told us microgravity flights are used to test equipment that will be  sent into orbit, including for example exercise equipment and 3D printers.  According to FAA, one company currently conducts microgravity research  using a Boeing 727 with a standard airworthiness certificate. Other  companies have proposed using retired military aircraft to fly scientific  payloads for researchers.
section_title: Data on the Size of the Space Support Market Is Virtually Non Existent Spaceflight Participant Training
paragraphs: It is difficult to determine the size of the market for the use of space  support vehicles for training because we have found no publicly available  studies on the size of the spaceflight participant training market, and  companies we interviewed told us they have not conducted their own  market analysis. However, companies within the industry provided a wide  range of estimates of the size of a potential training market. Estimates of  the training market reported by stakeholders are often dependent on the  size of the overall space tourism market and the training burden launch  companies anticipate for their customers. One industry study that found  that there are around 8,000 individuals with the money and inclination to  take a space tourism flight by 2022. However, it’s not clear how many of  these 8,000 individuals would choose to purchase training from training  providers, and the number would likely depend on whether launch  companies require training for passengers, how intensive the training will  be, and whether they will contract for this training or offer it in house.  Further, studies of the tourism market that we identified are dated and  may not reflect current industry conditions.
subsections: section_title: Research
paragraphs: According to stakeholders we interviewed, there are no studies available  on the research market; however, they said that research is a growing  segment of the space support market. One stakeholder reported that the  research market is the most robust commercial space market that  currently exists. It is unclear how many aircraft operators are currently  supplying aircraft services for research, but five stakeholders we  interviewed expressed interest in using their aircraft to carry scientific  payloads for researchers. Based on our interviews, the main customers  for this service include universities, the government, and private sector  organizations.
section_title: FAA’s Current Statutory and Regulatory Framework Limits Market Development
subsections: section_title: FAA’s Standard Aircraft Certification Process Is Intended to Ensure Passenger Safety; However, Companies Said They Face Challenges Because the Process is Lengthy and Costly
paragraphs: Two of the companies that we interviewed obtained standard aircraft  certification from FAA for aircraft that could be classified as space support  vehicles. However, as representatives from one company explained, the  certification process was lengthy and expensive. One of the companies  received certification to operate parabolic flights using a retrofitted Boeing  727. These flights provide a weightlessness experience that could be  used for spaceflight participant training (see fig 3). A company  representative told us that the certification process took 18 months and  cost millions of dollars. The other company uses a certified aircraft to  move its rocket that would be used in a launch from one place to another.  While two companies were able to obtain standard aircraft certification for  what could be considered space support vehicles, other stakeholders said  that the aircraft certification process may not be economically feasible for  companies due to the cost of meeting the requirements. For example,  representatives of one company said they have considered acquiring a  high-performance jet for spaceflight participant training, but that the  market for spaceflight participant training would not support the  investment needed to purchase the aircraft and go through the current  AVS certification process.
In addition, FAA’s standard aircraft-certification process is not well suited  for the types of aircraft that space support companies would like to use.  As mentioned earlier, AVS regulates the safety of aircraft by certifying  aircraft to provide a reasonable expectation of safety. According to FAA  officials, aircraft manufacturers are typically set up to work with FAA on  the certification process, which is an on-going process as the aircraft are  designed and built. The process is not designed for single-production  aircraft like those launch companies are developing or retired military jets  that companies would like to use for spaceflight participant training.  Further, if an aircraft with a standard airworthiness certificate is modified  or used for another purpose than its original purpose, including for space  support, FAA regulations for the standard aircraft certification process  require documentation of all modifications that demonstrates that these  modifications comply with applicable regulations.
section_title: Companies Are Prohibited from Receiving Compensation under Experimental Certificates
paragraphs: AVS allows certain aircraft to fly under an experimental certificate, but  companies are prohibited from operating these aircraft for carrying  persons or property for compensation and hire—meaning companies  cannot receive money for carrying passengers or cargo. Operators can  apply for experimental certificates for unique aircraft that have not been  approved under the AVS certification process. Experimental certificates  can be issued for:  showing compliance with regulations; exhibition (such as air shows or movie production); air racing; and  conducting market surveys.
FAA has provided experimental certificates for some vehicles that could  be used for space support services. For example, experimental  certificates have been issued for aircraft that are part of a hybrid launch  vehicle system for testing and further aircraft development. However,  because current regulations do not allow the owners of these  experimentally certified vehicles to carry persons or property for  compensation, companies are not allowed to use experimentally certified  aircraft for space flight participant training or to transport cargo on a  hybrid launch system.
The restriction on using experimentally certified aircraft to carry persons  or property for compensation has limited some companies’ ability to  operate in the space-support services market. Three stakeholders we  interviewed said they would like to operate space support vehicles, but  are having a difficult time securing funding from investors because of  market uncertainty and not knowing if they will be allowed to operate  them. In addition, some of the companies we interviewed have training  operations in other countries because they are not allowed to operate  specific aircraft in the United States under current laws and regulations.  Further, one company we interviewed has a spaceflight-participant  training program that received a safety approval from AST but does not  own a vehicle for the training. Company representatives said that they do  not want to invest in a space support vehicle until they know if they will be  allowed to operate it.
Allowing companies to use experimentally certified aircraft for  compensation or hire would require a regulatory change. Some of the  stakeholders that we interviewed said that a Letter of Deviation Authority  (LODA) from an experimental certification may be an option to be able to  operate for compensation or hire, but FAA officials we interviewed said  that LODAs only apply to pilot training and cannot be used for spaceflight  participant training.
section_title: Experimental Permits Only Apply to Launches
paragraphs: As described previously, AST issues licenses and permits for commercial  space launches. This process includes issuing experimental permits for  the development of hybrid vehicles that are connected with a launch  activity. When the aircraft component of a hybrid launch vehicle is used in  non-launch operations, companies must go through AVS’s certification  process to obtain an experimental certificate and operate under aviation  regulations. When hybrid launch vehicles are being developed for launch  activities, companies operate under commercial space regulations, and  FAA may issue an experimental permit or a license. Similar to  experimental certificates, companies with experimental permits are  prohibited from carrying property or human beings for compensation and  hire, according to statute. While companies can perform activities, such  as conducting test flights, they may not use hybrid launch vehicles to  receive compensation for carrying persons or property. For example,  companies would not be able to receive compensation for carrying a  researcher. When issuing experimental permits, AST’s process focuses  on minimizing risks to ensure the safety of third parties. As discussed  below, FAA is developing a report that would help address this issue  specifically for hybrid launch vehicles used in non-launch non-reentry  operations.
section_title: Stakeholders Have Mixed Views on the Appropriate Approach for Regulating Space Support Vehicles; FAA Has Taken Some Steps to Assess Its Regulatory Framework Some Options for Regulating Space Support Vehicles Would Require Statutory or Regulatory Changes
paragraphs: Through our discussions with FAA and interviews with stakeholders, we  identified potential options for regulating space support vehicles (see  table 1). One of these options is to keep in place the current process  using standard airworthiness certificates for regulating aircraft that  companies would like to use for space support vehicles. Other options  would require statutory and/or regulatory changes to allow for the  operation of space support vehicles. Each of these regulatory options  raises issues to be considered.
subsections: section_title: Options and Related Considerations for Regulating Space Support Vehicles
paragraphs: When asked what changes, if any, should be made to FAA’s current  regulatory process to oversee aircraft that might provide support services  for the commercial space transportation industry, stakeholders had mixed  views. Twenty-five of the 37 stakeholders expressed some opinion about  changing the regulatory process. While 11 of these 25 stakeholders did  not see a problem with the current approach for space support vehicles,  14 of 25 expressed an interest in a change.
Eleven of the 25 stakeholders who expressed an opinion said that the  current regulatory process under AVS is the best approach for regulating  space support vehicles. These stakeholders prefer the currently  regulatory approach for the following reasons:
They said that the AVS certification process could best protect  participants and third parties from potential safety risks. They said that  the technical expertise for ensuring that aircraft are safe for  participants is within AVS.
Some of the proposed space support activities—such as using retired  military jets to provide spaceflight participant training—are not  legitimate space activities but are in fact recreational aviation activities  and should therefore be regulated along with other aviation activities.
Some stakeholders said that the current AVS system is preferable  because AST is overburdened, and its staff needs to focus on other  commercial space activities, such as issuing launch licenses.
Some stakeholders would like these activities to remain under AVS to  keep them separate from commercial space launch activities,  especially in the public eye. For example, three stakeholders we  interviewed were worried that a crash involving a space support  vehicle might negatively impact the entire commercial space  transportation industry. Two stakeholders expressed concern that  moving space support vehicles to AST would place these activities  under the informed consent regime. Thus, accidents might impact  the safety numbers and mar the image and thus of attractiveness of  the future commercial space tourism industry.
Other stakeholders we interviewed believe that AST would be a  preferable FAA office to provide regulatory oversight to AVS. Specifically,  6 of the 25 stakeholders that expressed an opinion said that space  support vehicles should be regulated under AST, citing the following  reasons:
Two stakeholders interviewed said that AST staff are familiar with the  commercial space transportation industry and are therefore in the best  position to determine if a certain vehicle is necessary for commercial  space transportation activities.
Five stakeholders interviewed said that they are already working with  AST for other purposes, such as obtaining launch licenses, and would  prefer to continue working with one office to streamline the process.
Two of the stakeholders who preferred AST cited the office’s statutory  informed-consent regime, which instead of prohibiting certain  commercial space transportation activities, ensures that participants  are made aware of the activity’s potential risks.
In addition, some stakeholders were interested in a combined approach.  Specifically, 6 of the 13 launch companies that we interviewed said that  all space support vehicles should be regulated by AVS, except hybrid  launch vehicles, which they would prefer to be regulated by AST. See  discussion below on FAA’s proposal on the regulation of the aircraft  portion of a hybrid launch system, when it is operating as a space support  vehicle. Two stakeholders said that companies should have the choice to  work with AVS or AST.
Further, the Commercial Spaceflight Federation (CSF) has been  discussing with its membership how space support vehicles should be  regulated. CSF’s discussion is focusing primarily on the use of  experimental aircraft, such as former military jets, for compensation and  hire. CSF representatives indicated that some of its members’ view is that  Congress should direct the Administrator of FAA to authorize spaceflight  training flights through rulemaking, but these flights should remain under  AVS. However, they noted that if a company has gone through the  current difficult certification process for a certain capability, such as using  a standard certified aircraft to provide periods of microgravity through a  series of parabolic maneuvers, then companies should not need to use  an exemption to replicate this service. Further, to help minimize safety  risks if space support vehicle flights were to be authorized, these  representatives said that they should begin and end at a spaceport. In  addition, passengers should be notified that the aircraft are not certified  as safe under AVS’s aircraft rules and are not licensed as space  transportation—essentially an informed consent regime. According to  CSF representatives, a benefit of this approach is that it should enable  new capabilities that cannot exist within the current legal and regulatory  framework while helping minimize safety risks.
section_title: FAA Is Assessing the Licensing and Permitting Process for Some Space Support Vehicles
paragraphs: According to FAA officials, the commercial space transportation industry  is evolving and AST and AVS have worked with companies individually to  determine how they can legally operate within the current regulatory  system. However, FAA officials acknowledge that this issue is potentially  growing as more companies try to figure out how to cost-effectively  provide what they see as a potential market—supporting commercial  space transportation. Federal internal control standards state that  conditions affecting an agency, such as FAA, and its environment  continually change and that these changing conditions often prompt new  risks or changes to existing risks that need to be assessed. FAA has  taken steps to assess the licensing and permitting process for hybrid  launch vehicles; however, it has not assessed whether space support  vehicles are needed to meet the potential research, training, and other  needs of the commercial space transportation industry, and if it should  propose changes that would accommodate all aircraft that could be used  as space support vehicles.
FAA officials said that their views on non-launch and non-reentry  operations of hybrid launch vehicles will be expressed in their report that  was mandated under the U.S. Commercial Space Launch  Competitiveness Act. However, this report only focuses on one type of  vehicle—hybrid launch vehicles. As we described previously, hybrid  launch systems contain elements of both aircraft and rocket-powered  vehicles. These vehicles take off horizontally and then launch the  spacecraft once reaching a certain altitude. Currently, the portion of a  hybrid launch system that can operate like an aircraft is regulated as aircraft by AVS through experimental certificates when it is not engaged  in a launch.
While the U.S. Commercial Space Launch Competitiveness Act required  FAA to report on approaches for streamlining the licensing and permitting  process of non-launch, non-reentry operations of hybrid launch vehicles  related to space transportation, it did not require FAA to develop a  proposed regulatory framework. Although Congress did not require FAA  to develop a regulatory framework for vehicles that could be used in  support of space activities, federal internal control standards state that  federal agencies should identify, analyze, and respond to significant  changes that could impact the internal control system—the mechanism by  which an entity’s oversight provides reasonable assurance that the  agency’s objectives will be achieved. Further, they state that conditions  affecting an agency, such as FAA, and its environment continually  change and that these changing conditions often prompt new risks or  changes to existing risks that need to be assessed and addressed. While  FAA has taken steps to handle the safety issues of these vehicles on an  individual basis and is assessing approaches for streamlining the  licensing and permitting process of hybrid launch vehicles, it has not  examined how its regulatory framework should change, if at all, to  address the potential growth and related risks in the use of space support  vehicles. Thus, some stakeholders we spoke to are delaying investments  in space support vehicles.
section_title: Conclusions
paragraphs: The U.S. commercial space-transportation industry has seen significant  development in the past decade. As the industry evolves, companies are  considering how to provide additional services to support the industry’s  needs. While some companies are using certified aircraft to provide  space support services such as spaceflight participant training, other  companies would like to use vehicles such as retired military jets and  hybrid launch vehicles to provide such services. FAA’s current regulatory  framework applies to aircraft; however, the aircraft that some companies  would like to use to provide space support services do not fit into this  framework. As stakeholders recognized, a change in regulatory regimes  may impact safety and streamline the regulatory process. For example,  while FAA’s current regulations help ensure passenger safety, they also prevent some companies from providing space support services. While  FAA has started considering this issue, especially for hybrid launch  systems, it has not determined if space support vehicles are needed to  meet the potential research, training, and other needs of the commercial  space industry nor fully examined its current regulations as they relate to  space support vehicles and determined and documented the results of its  assessment. Since FAA has not conducted a comprehensive assessment  of how space support activities fit under its aviation or commercial space  transportation regulatory regimes, officials from some U.S. companies  told us they are delaying investments in space support vehicles. As a  result, it is uncertain if companies will be able to use space support  vehicles for potentially useful spaceflight participant training and research  services to meet the future needs of the commercial space-transportation  industry.
section_title: Recommendation
paragraphs: To respond to changes in the aviation and commercial space- transportation industries, we recommend that the Secretary of  Transportation direct the FAA Administrator to fully examine and  document whether the current regulatory framework is appropriate for  aircraft that could be considered space support vehicles, and if not,  suggest legislation or develop regulatory changes, or both, as applicable.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Transportation for  review and comment. DOT is not providing comments on the  recommendation at this time, but will provide a detailed response to the  recommendation within 60 days of the final report’s issuance. DOT  provided technical comments, which we incorporated into the report, as  appropriate.
In addition, to verify information, we provided a draft of this report to  NASA for review and comment. NASA provided technical comments,  which we incorporated into the report, as appropriate.
We are sending copies of this report to the Secretary of Transportation,  the Administrator of the FAA, and the Administrator of NASA, as well as  appropriate congressional committees and other interested parties. In  addition this report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-2834 or 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 key contributions to  this report are listed in appendix II.
section_title: Appendix I: Commercial Space Transportation Industry Stakeholders Interviewed
section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Cathy Colwell (Assistant  Director), Stephanie Purcell (Analyst in Charge), Namita Bhatia- Sabharwal, Dave Hooper, Sara Ann Moessbauer, Amy Rosewarne, and  Travis Schwartz made key contributions to this report.