The race to be the first private company to send up paying travelers into space in its own spacecraft has gone one notch higher, with another company, Xcor Aerospace from California, jumping into the fray.

A release by Xcor said its spacecraft would carry its first passengers around 2010, at the same time that Virgin Galactic, a company owned by Richard Branson, sends its own spacecraft on its first space flight. The difference would be the size, as the Virgin Galactic ship is much larger than the Xcor ship.

The Xcor ship would be called the Lynx. It would be as big as a small airplane, and the version would be able to fly up to 38 miles high. Subsequent version of the ship would be able to fly to a height of 63 miles, the distance from which space supposedly begins. Greason also said that like its competitors, Xcor would also be looking to have in place a craft that can get into the earth’s orbit, at a height of 130 miles.

Speaking at a news conference last week, Xcor CEO Jeff Greason said the company would have a partner that none of the other companies in the fray would have thought of: the U.S. Air Force. The reason for the Air Force’s interest in the Lynx is not tourism-related, apparently.

The space shuttles that are part of the U.S. Air Force’s fleet are of the same fixed wing model as Xcor’s Lynx. While the Air Force is putting out the shuttles in this field to pasture by 2010, it is apparently still interested in using the technology further. The Lynx could be an ideal model to work on, it seems.

To this end, the US Air Force has already sanctioned a small-business research contract to Xcor to show what its proposed spacecraft can do. Such a contract is usually between $700,000 and $900,000.

Greason said, “As I understand their objective, they want to share in the lessons learned during our program. They want to learn about space vehicles that take less notice and less time to prepare for flight, and that's what we're trying to do.”

“We decided to make it small because we could, and because there is a market for what it will provide -- a front-row seat into space. We fully expect to move into larger and more complex vehicles in the future, and to someday send spacecraft into orbit,” Greason added. Complete re usability is another key element that Xcor is looking at in its craft.

While mentioning that the interest that the US Air Force had shown in his company’s proposed space program was a ‘very validating thing,’ Greason downplayed the role of the U.S. government in financing the operation. Company officials at Xcor said along with the U.S. Air Force, two other agencies, NASA and DARPA, were providing them with technical support.

It may be unusual for the air force to actually hand out a contract to Xcor to develop what is effectively a space-tourism company, but it is not without precedent. Earlier, two companies have received contracts from NASA to work on rockets and crafts that could take cargo and later, possibly astronauts, to the International Space Station (ISS).

The Director of the Center for Defense Information, Theresa Hitchens, may not be too optimistic at times about the government’s initiative of merging commercial and military space mission, but she seems to be in agreement when it comes to the Lynx.

Hitchens said by collaborating with Xcor, the air force would be able to find ways and means of minimizing the risk that orbiting satellites faced and also come up with cost-effective means of launching into space.

According to the Federal Aviation Administration (FAA), the space tourism market would cross the $1 billion mark by 2021. Already, besides Xcor and Virgin Galactic, the lure of commercialized space travel has had over six other companies announce plans to launch their own space ships.

Other companies in the fray when it comes to space tourism are Blue Origin, a company developed by Amazon.com’s Jeff Bezos, Bigelow Aerospace, owned by Robert Bigelow, the hotel tycoon; and SpaceX, owned by Elon Musk, the co-founder of PayPal. Another company called Space Adventurers, based out of Tyson’s Corner, has already sent up five tourists into stage on board Russian-made Soyuz capsules,

A majority of these companies, with plans of sending tourists into space, have the financial backing of business tycoons, a luxury that Xcor does not have. and PayPal co-founder Elon Musk are going ahead with plans to develop rockets and spacecraft that would enable tourists to realize what space travel feels like.