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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

Summary: 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. 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. 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.