Hawaii Lawmakers Explore Space Industry, Target Hilo as Operations Hub

Lawmakers signaled this month that Hilo International Airport could become a Pacific operations hub for commercial launches, advancing measures that would fund hangar construction and clear financing pathways for a California firm, Fenix Space Inc. The Legislature moved the bills forward after initial committee hearings on Feb. 23, 2026, according to session reporting and HTDC listings.

Fenix’s proposal envisions a low-cost launch concept using a "winged booster ship towed high into the sky by plane," an image the company supplied to lawmakers showing a winged booster vehicle high above the ocean. A source identified only as Lee told Hawaii lawmakers that "Hilo also is being considered for Fenix operations due to its combination of geography, airspace, infrastructure and workforce potential." In a separate statement Lee added, "Hawaii’s latitude on the globe significantly boosts payload performance to low inclination orbits compared to mainland sites" and that "other important factors include uncongested airspace and flights over the ocean that eliminate risks to populated areas."

Legislative action includes two distinct financing avenues reported to be under consideration. The Hawai‘i Technology Development Corporation lists SB2693 in its 2026 legislative efforts and describes the measure as authorizing "$15 million in general obligation bonds to finance the planning, design, and construction of a 50,000 square foot aerospace hangar and related facilities at Hilo International Airport," requiring matching federal and private contributions and directing the Department of Transportation to expend the appropriation. Separately, reporting in committee hearings described a measure "to let the firm sell up to $40 million in low-interest bonds" for related development; the excerpts do not identify a bill number for the firm-issued bond authorization and do not confirm whether the $40 million instrument is distinct from SB2693.

Private investment interest has surfaced alongside the state proposals. "In September, Alaska-based investment firm Alaska Capital LLC announced that it signed a letter of intent to invest $30 million in Fenix in conjunction with accessing airports and launch facilities in Kodiak, Anchorage, Fairbanks and the Aleutian Islands," the reporting states. The September reference in the excerpts does not include a year.

HTDC frames the effort as part of a broader aerospace strategy. HTDC language on the program reads: "Accelerating Aerospace. Advancing Hawai’i," and states it is "leading the advancement of aerospace technology and establishing a statewide innovation corridor that positions Hawai‘i as a globally competitive hub for emerging markets in next-gen aviation and space." HTDC lists pre-development work on rocket launch technologies, UAS, hydrogen-powered aircraft, eVTOL platforms and other areas tied to an envisioned "Aerospace Port."

Local workforce and education pieces are already in place. University of Hawaiʻi at Hilo "launched its Space Sciences and Engineering Initiative a year ago to produce homegrown engineers and technicians," with a stated goal of preparing candidates for "500 jobs at observatories on Maunakea and Maui’s Haleakalā" and building a new Maker Space coordinated by PISCES. A Hilo Hawaii excerpt records that "The proposed project at Hilo International Airport has the potential to attract new ventures, support existing com-panies, and create high-quality jobs, clustered strategically in a concentrated geographic area," he said.

The push follows past fits and starts in island aerospace development: a Kau spaceport effort in the late 1980s and early 1990s failed, and the Legislature abolished the state Office of Aerospace Development in 2021, after which "some of the office’s work shifted to the HTDC led by Lam," the reporting notes. Thirteen House and Senate members in 2024 formed the bipartisan Aviation and Space Caucus chaired by Rep. Kanani Souza (R, Kapolei-Makakilo), and the caucus has introduced one or two bills in each of the last three years.

SB2693 requires a report to the Legislature prior to the 2028 Regular Session, and the measures that "recently advanced after initial committee hearings" will next face committee votes, matching-fund negotiations and federal permitting hurdles, including FAA airspace approvals and environmental review. The exact identity and title of the quoted "Lee," the role of "Lam," the year of the Alaska Capital LLC September letter of intent, and whether the $40 million firm bond authorization is the same or separate from SB2693 remain unresolved in the public excerpts and will determine whether Hilo becomes the island’s first viable commercial launch operations base.