Maximizing the power density as well as efficiency are two of the main critical aspects for engineers who are designing electrical machines for aerospace applications. Iron losses have a significant impact on the total machine efficiency, thermal state and, eventually, on the final machine design. This impact becomes especially critical for high-frequency machines. Thereby a selection of optimal stator material which allows minimizing the total weight and iron losses is very important. This paper focuses on the comparison of cobalt-iron alloy and high-grade non-oriented silicon steel materials in terms of influence on the starter-generator iron losses and power density. Analytical and finite element models are used for calculation and optimization of the machine parameters. The optimization of starter-generator design is performed by using genetic-algorithm taking into account thermal state and the estimation of passive mass. The results of investigation allows for the selection of an optimal stator material based on the machine efficiency, power density as well as the cost considerations.