By Tim Hepher and Giulia Segreti
PARIS/ROME (Reuters) -Europe’s Airbus, Thales (EPA:) and Leonardo are exploring plans to create a new joint space company as they look to compete with Elon Musk’s Starlink.
“Project Bromo,” named after an Indonesian volcano, envisions a standalone European satellite champion modeled on rocket maker MBDA, owned by Airbus, Leonardo and BAE Systems (LON:), three people familiar with the matter said.
So far, Europe’s leading satellite makers have said only that they plan to work together to create greater scale in a sector marred by heavy losses as the rapid growth of Musk’s Starlink network dominates low Earth orbit.
Although still in their early stages, talks are far enough along to get a codename within Airbus and a preferred structure with a new company that combines satellite assets, rather than one partner buying assets from the rest, the officials said. people.
Leonardo CEO Roberto Cingolani told Reuters that the talks involved several technical discussions and confirmed that the envisaged structure would be based on the MBDA model.
“It is; it’s difficult that it could be anything else,” he said on the sidelines of an event in Rome.
Airbus and Thales declined to comment.
The merger proposals are separate from the job cuts announced this week and could take years to implement, a source said. But together they represent a multi-speed effort to whip Europe’s struggling space sector into shape to face the competition.
Europe’s top satellite manufacturers have traditionally focused on complex spacecraft in geostationary orbit, but have been hit by the arrival of cheap small satellites in low Earth orbit. Cingolani said satellites would make up 75% of the space economy.
REDUCTION OF WORK
Talks to reform the long-term structure of the sector come as thousands of Airbus workers await details of job cuts in aerospace and defense, which will be presented to unions on Wednesday and Thursday.
Airbus said in October it would cut up to 2,500 jobs, or 7% of its Defense and Aerospace division, by mid-2026.
Thales, which has two existing alliances with Leonardo in satellites and services, is in talks with unions over plans to cut 1,300 space-related jobs.
The bulk of Airbus’ job cuts are expected to come in the €2 billion aerospace systems sector, reflecting the €1.5 billion in recent costs, industry sources said.
Airbus has the most aerospace activities in France. It is also likely that the headquarters of the defense and aerospace divisions in Germany will be scaled back, while Britain is concerned about the future of at least one factory. Spain is under pressure in defence.
The four countries founded Airbus more than fifty years ago and the share of any cost savings is a politically sensitive topic.
Airbus has said the cuts are expected to be achieved through voluntary arrangements.
The emerging bromance between space companies through “Project Bromo” and their vision of a European satellite champion is expected to last longer, after years of stalled efforts.
MBDA was founded in 2001 through the merger of the Anglo-French Matra BAe Dynamics, the French Aerospatiale Matra Missiles and the missile activities of the Anglo-Italian Alenia Marconi Systems.
It is owned by groups descended from its founders – Airbus, BAE and Leonardo – with the first two having the most control.
Just months after helping create the world’s second-largest rocket maker, Airbus’ then-parent company EADS vowed to pursue “the necessary restructuring” of the space industry.
More than two decades later, European satellite companies have so far failed to overcome competitive concerns and other hurdles, despite sporadic talks during that period.
“The MBDA model is being discussed, but the technicalities of governance may be different,” Cingolani said.
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