European majors Airbus, Thales and Leonardo today signed a memorandum of understanding to merge their satellite businesses, a major program aimed at challenging Elon Musk’s Starlink dominance in the space and strengthening Europe’s dominance.

THE “frontline European space pole”thus created, will employ approximately 25,000 employees across Europe with a turnover of €6.5 billion (at the end of 2024) and an order book representing over three years of sales.

It will be operational in 2027if the European Commission gives its green light, underlines Thales.

“Within a global context characterized by increased competition, we need champions of the space sector on a European scale. It is the only means to invest more, to innovate more, to be more competitive and to put the space sector at the service of our strategic autonomy,” reacted Philippe Baptiste, the French Minister of Higher Education, Space and Space and former head of CNES, the French space agency.

The merger plan, named Bromois “excellent news”, French Economy Minister Roland Leschire also expressed his satisfaction, welcoming “the creation of a European champion of satellites” which will allow “to strengthen our European sovereignty”.

“Monopoly”;

The new entity will be based in Toulouse, in southwestern France, where Airbus, Thales Alenia Space and Leonardo already have significant engineering, production and research facilities, a senior Thales official said during a telephone call.

Airbus, Leonardo and Thales will hold respectively 35%, 32.5% and 32.5% of the capital. The business will operate under joint control, with “balanced governance”, according to Leonardo, whose stock rose 2.9% on the Milan stock market after the announcement.

Unions have however warned against the “monopoly” that could be created by such a merger and that job cuts, which are underway in the space divisions of Airbus and Thales, are jeopardizing the maintenance of capabilities.

For the metallurgical union CGT, the reason for this merger is to “create a monopoly that can impose its prices and weaken the power” of France’s CNES and Europe’s ESA space agencies.

In a statement yesterday, Tuesday, the union pointed out that Airbus and Thales Alenia Space already had “a record order book that they would struggle to fulfill”.