Brownsville, Texas - The latest failure suffered by Elon Musk's SpaceX led to disruption at airports all over the East Coast on Thursday.

SpaceX lost the upper stage of its massive Starship rocket in a fiery explosion for the second time in a row, even as the booster was successfully caught in its orbital test.

Dramatic footage circulating online showed red-hot debris raining down over the Bahamas.

The fallout immediately impacted US airspace.

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The Federal Aviation Administration (FAA) briefly activated a "debris response area," delaying flights from airports stretching from Newark and Philadelphia to Miami.

The agency confirmed SpaceX will be required to conduct an investigation before it can fly again. Its latest test was waved through despite probes into the previous failure being incomplete.

SpaceX said in a statement that an "energetic event in the aft portion of Starship" had "resulted in the loss of several Raptor engines."

"This in turn led to... ultimately a loss of communications with Starship," it said, adding there were "no toxic materials present in the debris."

"We will conduct a thorough investigation, in coordination with the FAA, and implement corrective actions."

During Joe Biden's presidency, Musk frequently clashed with the FAA, accusing it of over-regulating SpaceX over safety and environmental concerns.

Now, as Trump's chief ally in dismantling the US administrative state along with programs that tens of millions depend on, the far-right billionaire faces scrutiny over his influence on federal agencies overseeing his companies.

According to Bloomberg News, a SpaceX engineer recently visited FAA headquarters, warning employees their jobs were at risk if they did not begin work on a program to deploy thousands of the company's Starlink satellite terminals in support of the national airspace system.

SpaceX has denied the allegations, stating "recent media reports about SpaceX and the FAA are false."