European Aerospace Giants Explore Joint Space Venture

By Tim Hepher and Giulia Segreti

PARIS/ROME (Reuters) – Europe's Airbus, Thales (EPA:TCFP), and Leonardo are exploring plans to establish a new joint space company to compete with Elon Musk's Starlink.

Project Bromo

Named after an Indonesian volcano, "Project Bromo" aims to create a standalone European satellite champion modeled on missile maker MBDA, which is jointly owned by Airbus, Leonardo, and BAE Systems. According to sources familiar with the matter, the discussions have advanced enough to assign a code name and establish a preliminary structure for the new company, which would combine satellite assets instead of having one partner acquire them from the others.

Technical Discussions

Leonardo CEO Roberto Cingolani confirmed to Reuters that talks have involved various technical discussions, affirming that the intended structure would follow the MBDA model.

Both Airbus and Thales have declined to make comments on the situation.

Job Cuts

These merger proposals emerge alongside upcoming job cuts within the industry. Earlier this month, Airbus announced plans to reduce its workforce by up to 2,500 jobs, or 7% of its Defence and Space division, by mid-2026. Thales is also negotiating with unions to cut 1,300 space-related positions. The job cuts are anticipated to mainly affect the €2 billion space systems business at Airbus, which has recently faced losses totaling €1.5 billion.

Industry Challenges

Traditionally, European satellite manufacturers have focused on creating complex spacecraft for geostationary orbit. However, they have struggled due to the influx of inexpensive small satellites in low Earth orbit. Cingolani noted that satellites are poised to comprise 75% of the space economy.

Long-term Vision

Amid discussions to reshape the industry, the proposed European satellite champion through Project Bromo may take years to develop and is viewed as a multi-speed effort to revitalize Europe’s space sector, which has struggled amidst heavy competition.

The original MBDA was established in 2001 and has remained primarily under the control of Airbus and BAE, while Leonardo also retains a stake. More than two decades later, Europe’s satellite companies continue to grapple with competition issues despite ongoing discussions.

"The MBDA model is being discussed, but technicalities of governance could be different," Cingolani concluded.

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