Airbus, Thales plan to combine some space activities: report

European aerospace majors Airbus and Thales are reported to be planning to combine some of their space-based activities, with a focus on satellite operations,

Reports citing industry sources said on Monday that the two European groups are looking to consolidate activities amidst increasing competition in satellite services.

Increasing demand for broadband services has  boosted demand for smaller, cheaper low orbit satellites while denting the demand for  large geostationary satellites.

Anglo-French satellite communications group Eutelsat OneWeb, Luxembourg-based satellite network provider SES and Elon Musk’s Starlink have emerged as global providers of satellite-based broadband services. 

Thales Alenia Space and Airbus are Europe’s largest manufacturers of communication satellites that are also used for navigation and surveillance. Thales Alena is 33 per cent owned by Italian defence major Leonardo.

A merger of the two would create a pan-European alliance for space-based activities. But that wolud require approval from French, German and Italian governments, and could face regulatory hurdles.

Airbus and Thales had explored similar tie-ups in the recent past, most recently in 2019. 

The French, German and Italian governments would need to approve an alliance, as would the European Commission. The current volatile political situation in France would also probably prove a stumbling block, according to one of the people. 

 A merger is important for both Airbus and Thales as both are under pressure to stem losses at their respective space businesses.

Airbus last month reported a €900 million charge related to its space systems business in the first half of the year. The company also had proposed to “evaluate all strategic options” for stabilising the business. 

Similarly, Thales has pointed to a possible reduction of some 1,300 jobs because of a fall in demand for telecom satellites.