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The rear mounted engine of HOTOL meant that the vehicle possessed intrinsically poor in-flight stability; early attempts to resolve this problem had ended up sacrificing much of HOTOL's payload potential, which in turn contributed to the failure of the overall project.Skylon's solution to the issue was to position its engines at the end of its wings, which located them further forward and much closer to the vehicle's longitudinal centre of mass, thereby resolving the instability problem.
Speaking in June 2011, REL estimated that it would require ultimately $12 billion to achieve an operational configuration, which was then estimated to be achieved around 2020, pendant on funding.On 10 July 2012, REL announced that the second of three series of tests has been completed successfully, and the final series of tests would begin the following month after the testing facilities had been upgraded to allow testing of −150 °C (−238 °F) temperatures.On , REL stated that a preproduction prototype of the Skylon could be flying by 2016, and the proposed route would be a suborbital flight between the Guiana Space Centre near Kourou in French Guiana and the North European Aerospace Test Range, located in northern Sweden.Aerospace publication Flight International observed that HOTOL and other competing spaceplane programmes were "over-ambitious" and that development on such launch systems would involve more research and slower progress than previously envisioned.which it named Skylon after the Skylon structure that had inspired Alan Bond at the Festival of Britain exhibition.Skylon was a clean sheet redesign based on lessons learned during development of HOTOL, the new concept again utilised dual-mode propulsion system, using engines that could combust hydrogen with the external air during atmospheric flight; but again SABRE was a clean sheet redesign based on lessons learned during development of HOTOL's RB545 engine Early on, Skylon was promoted by the company to the ESA for its Future European Space Transportation Investigations Programme (FESTIP) initiative, as well as seeking out both government or commercial investment in order to finance the vehicle's development.
REL has also sought to form ties with other company with the aim of producing an international consortium of interested firms to participate in the Skylon programme.
However, several officials have emerged as proponents and advocated for the official backing of the Skylon programme.
Speaking in 2009, the former UK Minister for Science and Innovation, Lord Drayson, stated of REL: During February 2009, following on from a series of extended discussions with the British National Space Centre (which later became the UK Space Agency), it was announced that a major funding agreement had been established between the British National Space Centre, ESA and REL, committing €1 million ($1.28 million) for the purpose of producing a demonstration engine for the Skylon programme by 2011.
REL intends ultimately to operate as a for-profit commercial enterprise which, upon the completion of development, shall manufacture Skylon vehicles for multiple international customers who shall operate their fleets directly, while being provided with support from REL.
According to the company, its business plan is to sell vehicles for $1 billion each, for which it has forecast a market for at least 30 Skylons, while recurring costs of just $10 million per flight are predicted to be incurred by operators.
It could carry 17 tonnes (37,000 lb) of cargo to an equatorial low Earth orbit (LEO); up to 11 tonnes (24,000 lb) to the International Space Station, almost 45% more than the capacity of the European Space Agency's Automated Transfer Vehicle;) The relatively light vehicle would then re-enter the atmosphere and land on a runway, being protected from the conditions of re-entry by a ceramic composite skin.