The Airbus space program lacks the necessary scale to successfully compete against US rivals and a merger with Thales and Leonardo is a possibility, according to CEO Guillaume Faury.
Speaking while delivering the aerospace manufacturer’s 2024 full year results on February 20, 2025, Faury said a merger would give the Europeans greater scale and speed.
“We are in a situation where some US players are disrupting the ecosystem at scale with new technologies and constellations,” he said. ‘In Europe, we have technologies, in some cases even better ones, but we are missing the scale that we need to be competitive in this new environment. We want to create the scale.”
Airbus posted AUD494 million in charges against its space program for the fourth quarter of 2024, taking charges for the full year to AUD2.6 billion. The charges are mostly connected with the loss-making OneSat programme of reprogrammable satellites.
Review of Airbus space program complete
In the past year, Airbus has completed a review of its space program. Among other things, Airbus is involved in developing the European service module for NASA’s Artemis Moon missions. It is also involved with the JUICE Jupiter mission and is helping develop the successor to the International Space Station.
Airbus also has a long history manufacturing Earth observation and communication satellites. But the company has previously said it has consistently failed to properly factor in technological risks when bidding for business
Now the review is complete, Faury said he doesn’t anticipate any further charges in 2025. He says Airbus is now “more selective on our biddings and more prudent on the risk profile of our contracts.”
But Faury also said Europe needed to step up its game and compete more strongly against the US, especially SpaceX.
“We’re really at a critical moment where we need to operate at scale, and that comes with creating consolidations that could look a bit monopolistic in Europe but, when you look at the world, it’s still small players compared to the giants we see in the US and in China.”
Merger talks underway
Faury says preliminary and non-binding merger talks with Thales and Leonardo are underway. He says any merger could be modelled on the MBDA European missile project that Airbus, BAe Systems and Leonardo have stakes in. MBDA is a major missile manufacturer.
The Airbus CEO said such an outcome would give Airbus “a significant share with others in a business that can prosper, that can grow, that can invest and can be successful on a global scale.”
However, any merger would need approval from European Union antitrust authorities. But Faury is hopeful that will happen given any merged entity would compete globally rather than just within Europe.
“Our view is that the market for space that we should be looking at as Europeans is the global market, and it is important that Europe is competitive not only within Europe but is competitive on a global scale,” he said.
Meanwhile, Airbus has hinted that it may also need to shrink its space and defence workforce by around 2,500 over the next couple of years.
