Europe’s space giants face delays as SpaceX races ahead

Plans by Airbus, Thales, and Leonardo to create a European space champion face a near three-year delay, raising concerns over the continent’s ability to compete in a sector being rapidly reshaped by Elon Musk’s SpaceX.

Talks began last year to merge the aerospace giants’ space operations into a joint entity encompassing satellite manufacturing, space systems, and services, Caliber.Az reports, citing foreign media.

The combined company could generate around €5 billion in annual revenues, according to a recent French parliamentary report. However, sources close to the negotiations told the Financial Times that even with an agreement by year-end, regulatory and political hurdles mean the venture likely won’t launch before 2028.

“If you are optimistic, the merger could go faster but it is very complex,” said a source familiar with the talks. Another added, “There may be agreement between the companies but after that the countries have to agree.”

The merger would impact more than 20,000 jobs across France, Germany, Italy, and the UK and faces scrutiny over sovereignty, competition, and technology control. In Germany, opposition is growing amid fears of job losses and potential dominance by French players. A French parliamentary report also advised against the deal if it strengthened German competitors due to forced disposals.

The urgency stems from a dramatic shift in satellite demand caused by SpaceX’s Starlink, which now serves over 5 million customers. Starlink’s rapid expansion into aviation, maritime, and government sectors has disrupted traditional geostationary satellite markets. Only four commercial contracts for such satellites have been awarded globally in 2024 — the lowest in 20 years.

“Musk came close to destroying the European space industry,” said analyst Sash Tusa. Airbus has written down over €2 billion in underperforming space contracts since 2023 and announced 2,000 job cuts. Thales Alenia Space has also slashed nearly 1,300 jobs.

“The merger is just the beginning of the journey,” said Maxime Puteaux of Novaspace. “It should not only be about the product that you are selling and designing, but the way they are making it. How can we make it cheaper, faster.”

“It will be very long and difficult but it has to be done,” concluded an executive familiar with missile-maker MBDA. “Europe has to take this opportunity.”

By Vafa Guliyeva