Avio scales back reusable-launcher demonstrator programme

Italian rocket manufacturer Avio has officially reduced the scope and funding of its Space Transportation System programme, the company disclosed Nov. 6, 2026.

The original project aimed to develop two rocket demonstrators, a single-stage vehicle and a two-stage version. Avio initially secured €217.5 million in public funding in June 2022 from Italy’s National Recovery and Resilience Plan, the National Complementary Plan and additional state funds. OpenPNRR data shows Avio had spent about €101.1 million, or 46.47 percent of the total STS budget, before it amended the contract.

The single-stage flight demonstrator known as FD1 remains fully integrated despite the revisions. Avio confirmed the vehicle is intact, and ground testing at Sardinia’s Salto di Quirra test range will conclude by the end of 2026. The company is constructing a temporary launch complex at the range, where FD1 will launch.

Technical complexities in developing Avio’s MR10 and MR60 methalox engines, which burn liquid oxygen and methane, drove the reduction in scope and funding. Avio intended the engines to prove technology for future reusable launchers, and Avio cautioned that more technical problems might appear during completion.

In March 2023, Avio won an €181.6 million contract from the Italian government under the National Recovery and Resilience Plan for development of a two-stage demonstrator. In May 2023, the company said it would first develop a single-stage suborbital demonstrator as an intermediate step toward the two-stage vehicle to validate reignitability of its MR10 methalox engine. Avio said it would start testing the IFD1 single-stage reusable demonstrator in the third quarter of 2025, expecting an initial firing test then as the last major step before launch.

Under its PNRR contract, Avio must complete the IFD2 test flight before the end of 2026. IFD2 is the two-stage rocket that Avio’s larger M60 methalox engine will power for the first time, whose development receives €103.7 million in Italian government funding. Lessons from the STS initiative will feed into Avio’s Vega Next rocket planned for introduction beyond 2032.

Separately, ESA and Avio signed a €40 million contract on Sept. 29, 2025, during the International Astronautical Congress in Sydney, to advance development of a reusable upper stage for future rockets. The 24-month agreement focuses on preliminary design and technology maturation and will end with a preliminary design review for both flight and ground segments. ESA space transportation director Toni Tolker-Nielsen and Avio chief commercial officer Marino Fragnito signed the deal.

Europe has never reused an upper stage, the last part of a rocket that delivers a payload to orbit. New Space Economy reported that the ESA-Avio agreement seeks to prove an upper stage can fly in space, return to Earth and fly again. The outlet added that first stages have achieved reuse, but upper stages face far greater difficulty because they reach orbital speeds. Work under the contract covers system requirement assessments, flight and ground segment design, and de-risking of critical technologies.

The stage design resembles a mini-Starship, using flaps for reentry control, heat shields rated for plasma heat up to 1,600°C and landing legs for vertical touchdown. It would mount on an expendable first stage, probably Vega C’s P120C booster, standing roughly 36.5 meters tall. Methane is denser, simpler to store and creates less soot than hypergolics or hydrogen, which aids reuse, and the M10 LOX-methane thruster being developed for Vega E might serve as the upper-stage powerplant.

Vega E is due in 2026 and will swap upper stages for a cryogenic module, potentially lifting low-Earth-orbit payload from 2.3 tons to above 3 tons and reducing costs via reuse. Susie, revealed in 2022, serves as a reusable Ariane 6 upper stage for cargo or crew missions, with model testing underway since 2023.

Following the 24-month effort, a positive preliminary design review may enable full-scale prototyping, initial flights in the early 2030s and integration by 2035. Integration with Vega E or new launchers could support ESA’s Artemis program contributions or independent missions.

Europe is pursuing other reusable-launcher work alongside Avio’s revised programme. ArianeGroup manufactured the Themis T1H reusable first-stage demonstrator under ESA’s Future Launchers Preparatory Programme as prime contractor, and it carries the high-power variable-thrust reusable Prometheus engine, also developed by ArianeGroup. The demonstrator will make its first low-altitude hop in 2026 from the ESRANGE Space Centre in northern Sweden.

The SALTO project brings together 26 EU industry players and targets three low-altitude vertical take-off and landing flights to demonstrate lift-off, landing, recovery, refurbishment and preparation for the next flight. The effort enables maturation of 34 key technologies for reusability spanning aerodynamics, aerothermodynamics, lightweight structures, landing systems, thermal protection, system monitoring, autonomous flight termination, avionics and guidance navigation and control.

The European Commission announced a €20 million call for proposals called Game-Changing Innovation for European Launch Solutions, published Jan. 29, 2026 and open until April 29, 2026, aiming at operational capability by 2035. HaDEA’s space research unit oversees the call, which seeks proposals on disruptive propulsion technologies.

The Commission has invested €120 million for access to space research under Horizon Europe so far, and the Horizon Europe Space R&I Work programme 2026 includes a €23 million topic on reinforcing EU autonomous access to space through an EU-based spaceport. The Commission also funded a €5 million prize for game-changing European launch innovations, awarding five teams for disruptive concepts.

Avio Chief Executive Giulio Ranzo tied the reusable upper-stage work to the company’s liquid oxygen-methane engine experience and Space Rider reentry expertise on Sept. 29, 2025. He described the goal as an advanced, lightweight, performance-efficient solution for next-generation launchers serving customers with higher flight rates and competitive costs.