The United States Federal Aviation Administration (FAA) grounded SpaceX's Starship and ordered an investigation into the spacecraft's disintegration during its latest test mission on Thursday. The incident occurred over the Caribbean, causing a fiery cascade of debris.

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The rocket's upper stage dramatically broke up and disintegrated over the Caribbean after launching from Texas on Thursday, forcing airline flights to alter course to avoid falling debris.

What did the FAA say? 

Authorities in the Turks and Caicos Islands diverted all flights from their airspace and warned residents not to touch fallen debris due to potential hazards.

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Read more | SpaceX's Starship explodes mid-flight, upper stage lost, says company

The federal agency in a statement said, "The FAA is requiring SpaceX to perform a mishap investigation into the loss of the Starship vehicle during launch operations on Jan. 16."

SpaceX will need to identify any corrective actions, which the FAA will review before determining if the launch vehicle can return to flight. Alternatively, the company may seek an early return to flight by demonstrating sufficient safety measures and confirming the mishap posed no public risk.

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The government of the Turks and Caicos Islands met with UK Space Agency experts and reiterated warnings to residents to avoid fallen debris. They advised residents to take photographs of the objects without touching them, emphasising that "Space debris remains the property of the spacecraft owner."

The FAA confirmed it had activated a "debris response area" to briefly slow aircraft outside the area where debris was falling, or stop aircraft from leaving their departure locations.

It added that several aircraft asked to divert due to low fuel levels while being held outside the affected area.

Musk expresses confidence despite concerns over safety

The incident raises new questions about both the safety of the rapidly increasing number of commercial space launches or at least the air traffic disruption being caused by them.

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It also is the latest incident highlighting the conflicts that Elon Musk's new role in the Trump administration will bring. He will have the remit to recommend changes, and potentially budget cuts, to government agencies including the FAA. That tension could hamper investigations like the one announced Friday.

Musk, who is preparing to travel to Washington to participate in Trump's inauguration, expressed confidence even as of Thursday night that SpaceX would resolve questions about the explosion quickly and restart test flights.

"Nothing so far suggests pushing the next launch past next month," Musk wrote on his social media site, X.

Musk also made fun of the spectacle the explosion created, as the debris fell toward Turks and Caicos Islands. "Success is uncertain, but entertainment is guaranteed!" atop a video of the fiery debris falling toward Earth.

What is Starship?

Starship is the biggest, most powerful rocket ever built, and is key to Musk's ambitions of colonising Mars.

Thursday's uncrewed launch was Starship's seventh test mission, and the first involving a taller, upgraded version of the rocket.

The Starship upper stage, two metres (6.56 ft) taller than previous versions, was a "new generation ship with significant upgrades", SpaceX said before the test.

It was due to make a controlled splashdown in the Indian Ocean roughly an hour after its launch from Boca Chica, Texas.

The Starship test launch on Thursday came hours after the first flight of the Blue Origin New Glenn rocket system, backed by Amazon boss Jeff Bezos.

It was a huge step forward for Bezos and his company which has spent years getting to the point of sending a rocket into orbit.

Bezos and Musk both want to dominate the space vehicle market.

(With inputs from agencies)