Virgin Orbit bankruptcy casts shadow over Japan's space dreams

The bankruptcy filing of Richard Branson's Virgin Orbit has dealt a significant blow to Japan's plans of building a domestic space industry, including the Kyushu-based spaceport designed to attract tourism.

Oita prefecture had partnered with Virgin Orbit in 2020 to create its first Asian spaceport at Oita Airport using a Boeing 747 for horizontal rocket launches. However, the original plan to launch small satellites from Oita as early as last year never occurred, leading to another setback in Japan's attempt to become a player in the crowded market for commercial satellite launches after two recent rocket launch failures.

Two Japanese companies, ANA Holdings unit All Nippon Airways Trading Co and little-known Japanese satellite development start-up iQPS Inc, emerged among the top six creditors when Virgin Orbit filed for Chapter 11 bankruptcy protection. ANA, owed $1.65 million, had entered into a provisional deal with Virgin Orbit in 2021 for 20 flights of its LauncherOne rocket at the Oita spaceport. Fukuoka-based iQPS had paid a $5.2 million deposit to launch its small, lightweight constellation satellites weighing around 100 kilograms.

Oita prefecture had estimated that the spaceport would produce economic benefits worth about $97 million dollars in the region over the five years from the initial launch, attracting around 240,000 tourists. Local businesses created alien-related souvenirs, from alien passports to "E.T." bicycles, in anticipation of the spaceport's opening. Locals are still hopeful that a spaceport will eventually emerge, and an economics lecturer at Oita University noted that there are other companies and competitors besides Virgin Orbit that are considering horizontal launches, so Oita still has many options to re-enter into a contract with them.

While Japan has big ambitions for space, recent setbacks such as the failed medium-lift H3 rocket in March and the solid-fuel Epsilon rocket in October have some experts urging Japan to shift the focus of its space industry. Cyber and space expert Jun Nagashima suggested that Japan is concentrating too much on launches and that it would be better for Japan to compete in different activities and areas in space, especially with SpaceX coming out with affordable rockets that can be used repeatedly.

Despite the challenges, Japan's hopes of building a domestic space industry and attracting tourists to its spaceports remain intact, and the country will likely continue to pursue new opportunities and partnerships in the rapidly evolving space sector.

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