The work focusses on the use of multidisciplinary optimization to design a cost optimized airborne nanosatellite launch vehicle capable of bringing a 10 kg payload into low earth orbit (LEO). Piggyback or shared launch options currently available for nanosatellites are relatively low cost (~45,000 €/kg) but have as serious disadvantage a limited mission flexibility due to a limited range in attainable orbits and the launch schedule being connected to that of its fellow passengers. An alternative option, providing increased mission flexibility, is through the use of a dedicated launch vehicle, be it at a higher launch cost. An interesting option to limit the increase in launch cost is by air-launch to orbit using an already existing aircraft as carrier vehicle, i.e. first stage. This is considered beneficial especially for small launch vehicles as many potential carrier vehicles are available and because of the relatively high drag loss that is associated with ground-launch to orbit for small launch vehicles. The work presented here addresses the use of multidisciplinary optimization (MDO) methods to the design of solid rocket propelled launch vehicles, thereby taking into account both air- and ground-launch as well as the addition of lifting devices (use of wings). The method combines both vehicle and trajectory design in a sequential approach. Analysis modules included address issues concerning vehicle geometry, aerodynamics, solid rocket propulsion and vehicle mass, size and cost. The tools developed have been used to design a low-cost, solid propelled vehicle that is launched from an F-16 aircraft. Main design variables are release altitude, -velocity and -flight path angle as well as number of rocket stages, stage thrust and stage burn time. The results show an optimized, three stage launch vehicle that fits within the contours of the F-16’s 370 gallon external fuel tank and with a gross take-off mass that is up to 70% lower than that of a comparable 10-kg to LEO ground launched vehicle. The vehicle’s launch costs are estimated at 1.9 million euro per launch based on a total of 120 launches over a period of 20 years. This is a 30% reduction as compared to the cost of a comparable 10-kg to orbit optimized ground launched vehicle.