Are we going to see a big bang in the satellite sector in Europe? Thales and Airbus, the two largest European satellite manufacturers, are reportedly in talks to merge. This is what is announced The gallery on its website on July 15. When questioned by L’Usine Nouvelle, the two rivals did not want to comment on the subject. However, market conditions seem favorable for such a rapprochement.
So much so that the Italian group Leonardo, Thales’ partner in the joint venture Thales Alenia Space, could join them. According to Reuters, Roberto Cingolani, CEO of the Leonardo group, said he was in favor of rapprochements in the space sector in Europe. “We are very active in the emergence of large European alliances (…) we are now working hard with Thales and Airbus on new strategic visions in space,” he said during a hearing on July 16 in the lower house of the Italian parliament.
A crisis that is expected to last
All these players have been hit hard by the crisis in the space sector. Last June, Airbus announced a provision of 900 million euros linked to its space branch when it revised its 2024 financial objectives. The manufacturer made no secret of the fact that all of its activities (telecommunications, navigation, observation, etc.) were affected. A few months earlier, in March, it was Thales Alenia Space that acknowledged having difficulties in the space segment. The joint company between Thales (67%) and Leonardo (33%) then announced 1,300 job cuts, including around 1,000 employees in France over 2024 and 2025. Employment is all the more fragile since the manufacture of the latest generation geostationary satellites requires 2.5 times less labor than current satellites.
Both players are mainly suffering from the slowdown in the market for geostationary orbit telecommunications satellites. “The market for geostationary telecommunications satellites has been halved. Previously, more than twenty satellites were sold per year compared to around ten or even fifteen today, explains Pacôme Revillon, CEO of Novaspace. This raises the question of the minimum critical size of demand to maintain industrial chains.”
And the crisis could last, no recovery is in sight, according to the expert. According to him, traditional players are also suffering from the rise of low-orbit telecommunications constellations, such as Starlink owned by Space X. Elon Musk’s company that operates the satellites, manufactures them itself and no longer uses external manufacturers. Amazon with its future Kuiper constellation, will operate on the same model.
Major customers also affected
At the same time, satellite manufacturers are facing significant R&D investments. They are forced to invest in a new generation of satellites capable of reconfiguring themselves in orbit. And the least we can say is that they are struggling. Thales Alenia Space and Airbus are struggling to develop the design and industrialization of their solutions. They are behind schedule on their commercial commitments and sometimes have to compensate for the failures of their suppliers.
By relying on alliances to get through the sector crisis, manufacturers would in fact be following their major customers, telecommunications satellite operators. At the end of June, Intelsat and SES announced their merger to better compete with Starlink and Kuiper. The European space sector is in full swing and is counting on mergers to get out of the crisis.
Source: www.usinenouvelle.com
