The upper stage exploded minutes after launch from South Texas, leading the company to declare the uncrewed vessel a "loss" in the seventh test flight of the heavy-lift spacecraft.

The Starship's upper stage successfully lit all six Raptor engines and performed its ascent burn to space. Also, a pair of mechanical arms on the launch tower, called "chopsticks" by the company, grabbed the Starship's returning fuel booster stage at 6 minutes, 56 seconds after launch.

A similar incident of the upper stage occurred on the second test launch of the Starship last year.

NASA is paying SpaceX to develop a variant of the Starship upper stage to carry astronauts to the moon in 2027.

The grounding doesn't affect Space X's launch of satellites aboard a Falcon 9 from Texas and Florida.

In a statement, SpaceX said "initial data indicates a fire developed in the aft section of the ship, leading to a rapid unscheduled disassembly."

The FAA made the announcement Friday:

"The FAA is requiring SpaceX to perform a mishap investigation into the loss of the Starship vehicle during launch operations on Jan. 16. There are no reports of public injury, and the FAA is working with SpaceX and appropriate authorities to confirm reports of public property damage on Turks and Caicos.

The FAA had said it "briefly slowed aircraft outside the area where space vehicle debris was falling or stopped aircraft at their departure location. Several aircraft requested to divert due to low fuel levels while holding outside impacted areas.

The FAA activated a Debris Response Area, which is done "only if the space vehicle experiences an anomaly with debris falling outside of the identified closed aircraft hazard areas."

On Thursday, the FAA also ordered SpaceX rival Blue Origin to perform a mishap investigation of the NG-1 mission that launched from Cape Canaveral Space Force Station in Florida that day.

The rocket launch was successful, but the first landing attempt of the first-stage booster on the cargo ship failed.

"Our goal is to fly New Glenn again this spring," the company said in email to Spectrum News. "Our mission was a success - our lone objective was to reach orbit while noting that landing our booster, 'So You're Telling Me There's a Chance,' hundreds of miles offshore would be a bonus."

Blue Origin scrubbed New Glenn rocket's maiden launch early Monday morning after encountering a "vehicle subsystem issue."

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