Traditionally, air-launched missiles are powered by a turbojet engine, rocket motor or a ramjet engine. A novel concept that may offer advantages over these concepts is the Air Turbo Rocket (ATR), which is a combined cycle engine, featuring a cycle where the turbine is isolated from the core engine flow entirely and powered by a separate gas generator. This paper is aimed at assessing the suitability of the solid propellant ATR as power source for a tactical air-launched missile. The ATR cycle is designed to achieve optimum performance, and a suitable solid propellant is selected. In addition, a turbojet and a solid rocket motor are designed for the same requirements, and the performances of these three engine concepts are compared. The ATR offers high thrust to weight and thrust to frontal area weight ratios, throttleability, and a wide speed-altitude operating envelope. The calculations suggest that, provided that the afterburning cooling issues can be solved, it would be reasonable to design the ATR such that a stoichiometric fuel/air mixture is obtained in the afterburner. For the Mach number range evaluated here, the ATR may offer advantages over the turbojet and the solid propellant rocket motor.