The sky may no longer be free for the space industry. Rocket companies such as SpaceX and United Launch Alliance (ULA) may soon be required to pay a fee to support FAA oversight and airspace coordination, part of a broader effort to keep pace with the growing launch industry.
A budget reconciliation bill released by Senator Ted Cruz last week proposes that the Federal Aviation Administration (FAA) begin collecting license fees from rocket companies starting next year. The fees collected would go into a trust fund to help the FAA’s Commercial Space Transportation (AST) Administration get more resources needed to manage the growing number of rocket launches as it faces budget cuts for next year.
Today, companies such as SpaceX are required to pay small fees that cover the application process for launch and re-entry licenses issued by the FAA. In return, the FAA clears the airspace for commercial and private flights during rocket launches and reentry. Airlines, on the other hand, pay fees to the FAA that go into the Airport and Airway Trust Fund, which accounts for nearly half of the administration’s annual budget.
The growth of the space industry is putting an additional burden on the FAA, and the authors of the proposed bill believe it’s time for companies to start paying their dues. “You have a group of new users that are not paying anything into the system that are making up an increasing share of operations, and I truly believe that the current structure is not sustainable,” former FAA Administrator Michael Huerta told NPR in a May 2024 interview.
The FAA initially waived fees for space companies to help the industry grow in its early years. Last year, SpaceX launched 134 rockets into orbit, mostly Falcon 9s, and is on track to break its record with 170 launches in 2025. As the clear industry leader, SpaceX dominates the use of airspace over the United States, while other companies such as ULA made a total of five launches in 2024.
SpaceX executives have also been the most vocal in their opposition to the FAA’s lack of resources and its inability to keep up with the growing space sector. In 2023, William Gerstenmaier, SpaceX’s vice president, spoke at a hearing of the Senate Subcommittee on Space and Science, warning that the FAA’s licensing office was in “great distress” and “needs twice the resources it has today.”
Perhaps SpaceX did not expect that funding for these resources would come from the company’s own pocket. The new bill proposes that the FAA charge rocket companies based on the weight of the payload per launch, starting at $0.25 per pound in 2026 and gradually increasing by about $0.10 each year. In 2033, companies will potentially have to pay $1.50 per pound of payload. According to Ars Technica, for SpaceX, the fee for launching a Falcon 9 of Starlink satellites in 2026 will average $9,400. In 2024, SpaceX launched 89 Starlink missions, which would have cost it about $836,600 under the proposed guidelines.
The FAA could use the money as it faces a tight budget for 2026. In the US administration’s cut budget released last month, $42 million was allocated for the AST. The FAA’s total budget request for 2026 is $22 billion, a very small portion of which will be used to expand staffing for launch and reentry licensing. The budget of the FAA’s Office of Commercial Space increased from $27.6 million in 2021 to $42 million in 2024 to account for the growing number of rocket launches. In 2024 and 2025, AST received roughly the same budget, excluding inflation and continued industry growth. The proposed trust fund could help fill the FAA’s budget deficit and allow it to expand its rocket licensing activities.
Space companies are quick to criticize regulatory agencies such as the FAA for slow processes, but now may be the time to pay them to launch their rockets faster.
