In 2004, a team led by Rutan won a $10-million purse called the X Prize to send someone into space twice in a week without government money.
"Burt helped break preconceptions on what commercial enterprises can do in spaceflight," said Elon Musk, founder and chief executive of the private rocket venture Space Exploration Technologies Corp., or SpaceX. "He's a tremendous inspiration."
Rutan had come up with a novel idea: Instead of trying to launch a rocket directly into space, a carrier craft, which resembles a flying catamaran, lifted a rocket plane to an altitude of 50,000 feet. At that point, the rocket plane, dubbed SpaceShipOne, separated and blasted off to about 325,000 feet, or 60 miles, above the Earth's surface.
At that suborbital altitude, the pilot experienced weightlessness and could see the curvature of the Earth.
The prizewinning spacecraft, SpaceShipOne, caught the eye of billionaire Branson. He started Virgin Galactic, the space travel company that hopes to operate suborbital trips by next year with paying customers. So far it has reservations and deposits from about 500 people.
Rutan had hoped to be on the first Virgin Galactic flight into space, but he is retiring before flight testing on the aircraft is complete.
"If I were a young guy with no health problems, things might be different," he said.
Scaled Composites, with about 350 employees, is now owned by Century City-based aerospace giant Northrop Grumman Corp., but Rutan has run it like a small business.
Northrop Grumman CEO Wesley G. Bush saluted Rutan on his retirement, saying he has been a "pioneer and visionary" who has "provided inspiration to many younger engineers and scientists."
In recent years, Rutan has been plagued by heart issues. In 2008, he stepped down as company president and gave up day-to-day responsibilities after undergoing open-heart surgery. Douglas B. Shane, a longtime employee, succeeded him as company president.
Rutan said he has one more "Rutan-design aircraft" to unveil. After that, he looks forward to at least one year without any distractions. And after that, he might write his memoirs.
"I've never not known what I was going to do in the next month," Rutan said, indicating that rest and relaxation will be good for him. "I always felt that the best chapter in life is the next one."