By Eimi Yamamitsu

TOKYO, April 7 (Reuters) – The bankruptcy filing by
Richard Branson’s Virgin Orbit Holdings Inc has dealt a
blow to Japan’s hopes of building a domestic space industry,
with plans for a Kyushu-based spaceport designed to attract
tourism on hold for lack of funding.

Oita prefecture, home to Japan’s largest number of hot
springs, partnered with Virgin Orbit in 2020 to create its first
Asian spaceport at Oita Airport using a Boeing 747 for
horizontal rocket launches.

Founded by British billionaire Branson, Virgin Orbit had
marketed itself as a military and intelligence satellite launch
platform for the U.S. and its allies, including Japan, at a time
when both Washington and Tokyo see China’s rise as a space power
as a concern.

The original aim was to launch small satellites from Oita as
early as last year, but that never occurred, in another setback
in Japan’s attempt to become a player in the crowded market for
commercial satellite launches after two recent rocket launch

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 on Tuesday.

ANA, owed $1.65 million, had been a key partner for the Oita
spaceport, entering a provisional deal with Virgin Orbit in 2021
for 20 flights of its LauncherOne rocket there. ANA said it was
hopeful Virgin Orbit, which has said it is seeking a buyer,
would be able to restructure and resume business.

Fukuoka-based iQPS had paid a $5.2 million deposit to launch
its small, lightweight constellation satellites weighing under
100 kilograms (220 pounds), representing a major portion of the
$17.2 million Series A funding it had raised in 2017.

“We were disappointed when we heard the announcement as we
had hoped the situation would improve,” iQPS said of the
bankruptcy filing. “We pray that Virgin Orbit will resume their
business for the development of the global space industry.”


Oita prefecture had estimated the spaceport, similar to
Virgin Orbit’s Cornwall, England facility, would produce
economic benefits worth about 10.2 billion yen ($77.4 million)
in the region over the five years from the initial launch.

With expectations of about 240,000 tourists visiting the
site, local businesses created alien-related souvenirs, from
alien passports to “E.T.” bicycles.

Locals are still hopeful that a spaceport will eventually
emerge. “It is possible that some other company will buy Virgin
Orbit. Also, there are other companies and competitors besides
Virgin Orbit that are considering horizontal launches, so Oita
still has many options to reenter into a contract with them,”
said Kunio Ikari, an economics lecturer at Oita University.
Oita prefecture said that its efforts to attract a spaceport
remains unchanged, while declining to comment on Virgin Orbit or
the current status of the project. Oita Airport also declined to

While Japan has big ambitions for space – Tokyo has said it
hopes to put one of its astronauts on the lunar surface in the
latter half of the 2020s – it has also had some other recent

Japan’s medium-lift H3 rocket failed in March following an
aborted launch the month before, in a blow to its efforts to cut
the cost of accessing space and compete against Elon Musk’s

The Japanese space agency’s solid-fuel Epsilon rocket, which
was set to carry iQPS’ small satellites, also failed after
launch in October.

After the unsuccessful launches, some experts are urging
Japan to shift the focus of its space industry.

“Japan is concentrating too much on launches,” said Jun
Nagashima, cyber and space expert and adviser at Nakasone Peace
Institute. “With SpaceX coming out with affordable rockets that
can be used repeatedly, it would be better for Japan to compete
in different activities and areas in space.”
($1 = 131.7900 yen)

(Reporting by Eimi Yamamitsu and Nobuhiro Kubo; Additional
reporting by Kantaro Komiya; Editing by Jamie Freed)


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