A thermodynamic assessment on space transportation systems and propulsion is proposed. Propulsion system is formulated as thermodynamic cycle independent of specific engine configurations. A thermodynamic cycle that enables space transportation systems to gain orbital energy indicates guidelines for flight path, vehicle shape, propulsion system and it provides references to compare among different type space transportation systems. This assessment is useful in a conceptual design to evaluate effectiveness of various space transportation systems. The example suggests that design flexibility of space transportation system with air-breathing propulsion is limited in spite of its high specific impulse.