Airbus executives report significant progress in revitalizing their struggling space business unit. This follows substantial financial charges in 2023 and 2024. At the Paris Air Show and a subsequent “Business Update” event, executives highlighted signs of improvement. Alain Fauré, head of space systems at Airbus Defence and Space, stated, “In one word, we are stabilizing. Now we are back on track.”
Past challenges stemmed from poor cost and schedule management on satellite programs, attributed to inadequate technology risk assessment and insufficient bid selectivity. This included difficulties with OneSat, a line of software-reconfigurable GEO communications satellites. Fauré acknowledged the challenges, saying, “It was very challenging in terms of development,” but expressed confidence in delivering the first OneSat satellite in 2026, adding, “The team has really turned things around.”
The turnaround strategy focuses on enhancing competitiveness, efficiency, and profitability. Mike Schoellhorn, chief executive of Airbus Defence and Space, echoed this sentiment, stating, “The team is doing an excellent job with new leadership to turn the ship around and turn it into a profitable and growing business.” This includes a workforce reduction of over 2,000 positions, primarily in back-office roles, not involving engineers. Schoellhorn noted that the company is “ahead of the curve” on this initiative.
Concurrently, Airbus is negotiating a potential merger of its space business with Leonardo and Thales Alenia Space. Roberto Cingolani, CEO of Leonardo, anticipates a “go/no-go” decision by July. Schoellhorn confirmed, “We’re currently in the due-diligence phase…That will have to lead to a decision in the second half of the year, yea or nay.” Antitrust reviews could take approximately two years, according to Cingolani and Fauré. Schoellhorn expressed optimism about EU approval, referencing Andrius Kubilius's support for industry consolidation to enhance European military readiness. Kubilius stated, “We participate in a global competition and if Europe wants to be a competitor on a global scale, we need to do something.”
Fauré emphasized the need for consolidation within the fragmented European space sector, highlighting the potential for a “European champion” through the merger. Schoellhorn described the combined entity as a “gamechanger in terms of scale,” allowing Europe to compete with major US players like Lockheed Martin, Northrop Grumman, and Boeing. He further indicated that consolidation remains vital even with reduced concerns about Elon Musk's influence. He stated, “I still think the consolidation in Europe makes a lot of sense and is still needed because we do fight in the world market against very large players, not only SpaceX.”