Skylon Spaceplane prototypes are expected by 2017 and engine flight test by 2020

 Flight tests of an engine for the UK Skylon spaceplane are expected by 2020 and a prototype engine is expected by 2017. Two Synergetic Air-Breathing Rocket Engines (SABRE) will power the Skylon space plane — a privately funded, single-stage-to-orbit concept vehicle that is 276 feet (84 meters) long. At take-off, the plane will weigh about 303 tons (275,000 kilograms). The two SABREs are located on the tips of the delta wings attached midway down the Skylon’s dart-like fuselage, powering it to deliver up to 33,000-pounds (15,000 kg) into orbit.
The UK government has committed £60 million ($90 million) has been committed to begin building the SABRE prototype.
Reaction Engines’ SABRE development program plans to flight-test the engine using an unmanned aircraft called the Nacelle Test Vehicle. The entire development program will require a consortium of companies, and Reaction Engines has been seeking partners as well as financiers.
SABRE burns hydrogen and oxygen for thrust, acting like a jet for Skylon’s flight through the thick lower atmosphere, taking in oxygen from the atmosphere to combust it with onboard liquid hydrogen. But when the Skylon space planereaches an altitude of 16 miles (26 kilometers) and five times the speed of sound (Mach 5), it switches over to its onboard liquid oxygen tank to reach orbit.
The Skylon reduces the required mass ratio by improving the engine specific impulse by operating in an airbreathing mode in the early stages of the flight – up to around Mach 5.5 and an altitude of 25 kilometres before the engine switches to a pure rocket mode to complete the ascent to orbit. This makes a very significant difference; a pure rocket needs to achieve an equivalent velocity of around 9200 m/sec (7700 m/sec orbital speed and 1500 m/sec in various trajectory losses) whereas the airbreathing absorbs about 1500 m/sec of the orbital speed and 1200 m/sec of the trajectory losses so the pure rocket phases needs to provide only 6500 m/sec and this increases the minimum mass ratio from 0.13 to 0.21. Even with the extra engine mass required for the airbreathing operation this is a far more achievable target.
The Skylon development is estimated to take 9.5 years (2023 or so) and cost $9.518 Billion (2004 prices). The development program will produce a vehicle with a life of 200 flights, a launch abort probability of 1% and a vehicle loss probability of 0.005%. Assuming a production run of 30 vehicles each vehicle would cost about €565 M. In operation it should be capable of achieving a recurring launch cost of €6.9 M per flight or less.