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Europe’s Airbus, Thales, Leonardo Near Satellite Merger to Rival Starlink

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Europe’s leading aerospace groups Airbus, Thales, and Leonardo are finalizing a long-awaited merger of their satellite manufacturing operations, aimed at creating a continental space champion capable of competing with Elon Musk’s Starlink, people familiar with the talks told Reuters.

While the official announcement, initially expected Wednesday, was delayed by legal and financial fine-tuning, insiders said the deal remains on track, with only minor details causing the hold-up. “The announcement is ready,” said one source. “It’s industrially, technically, and financially complicated, but the framework is intact.”

Under the plan — known internally as “Projet Bromo” — the three companies will combine their satellite assets into a joint holding company, each owning roughly one-third after balancing payments. The new entity will require up to two years to finalize, pending regulatory approval, and could face scrutiny from EU competition authorities that previously blocked similar ventures.

The merger would make the group the largest global manufacturer of geostationary satellites, overtaking Maxar, Northrop Grumman, and Lockheed Martin, according to data from Quilty Space. However, analysts note that the geostationary satellite market has been shrinking due to the rise of low-Earth orbit constellations, led by SpaceX’s Starlink and Amazon’s Project Kuiper.

“Europe had a commanding lead in geostationary satellite manufacturing,” said Caleb Henry, research director at Quilty Space. “But this market has shrunk considerably in the face of these new titans of industry.”

The merger is seen as a strategic lifeline for Europe’s fragmented satellite industry, which has struggled to stay competitive amid rapid shifts in global space technology and soaring demand for low-orbit broadband systems.

Although corporate governance details — such as who will chair or lead the merged group — remain unsettled, sources said all three companies are committed to cooperation, driven by falling market share and rising losses in their satellite divisions.

If completed, the merger would mark the most significant consolidation in Europe’s aerospace industry in decades, signaling a coordinated effort to reclaim technological leadership in the new era of commercial space.

Elon Musk’s SpaceX Looks to Strengthen Its Presence in Italy Through Starlink Expansion

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Elon Musk’s aerospace company, SpaceX, is making a push to enhance its presence in Italy by expanding its satellite broadband venture, Starlink. The country is currently exploring potential agreements with Starlink, and Musk recently expressed readiness to provide Italy with “the most secure and advanced connectivity.”

Musk’s relationship with Italian Prime Minister Giorgia Meloni has grown stronger, with Meloni cultivating ties with the billionaire, who is closely aligned with U.S. President-elect Donald Trump. Starlink, a subsidiary of SpaceX, operates 6,700 active satellites in low-Earth orbit, maintaining a commanding position in the satellite sector, controlling nearly two-thirds of all active satellites globally. The service currently serves over four million customers worldwide, including around 55,000 in Italy, the third-largest economy in the Eurozone.

Italy is considering two major projects involving Starlink services:

  1. Secure Communications for Government and Diplomats
    Italy is looking to leverage Starlink’s space-based communications for secure transmissions among government officials, diplomats, and military personnel operating in sensitive regions, such as across the Mediterranean. The potential agreement, worth 1.5 billion euros ($1.6 billion) over five years, has been in discussion for several months and was publicly confirmed by Italy’s Foreign Minister Antonio Tajani last October. This satellite system could serve as a more immediate solution compared to the EU’s IRIS2 satellite network, which faces delays and cost overruns.
  2. Bridging the Digital Divide in Remote Areas
    The Italian government is also considering using Starlink to increase internet access in the country’s most underserved and remote regions. With the slow progress of state-funded fiber roll-out programs, Starlink could provide a viable alternative to boost high-speed internet access. The government is preparing to conduct tests later this month to assess the feasibility of using Starlink’s services.

Additionally, Telespazio, a joint venture between Italy’s Leonardo and France’s Thales, has integrated Starlink services into its existing satellite network. The deal, signed in June, aims to commercialize Starlink’s broadband services in Italy.

 

Airbus, Thales, and Leonardo Plan New European Satellite Venture Amid Industry Challenges

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INTRODUCTION:
European aerospace giants Airbus, Thales, and Leonardo are reportedly in discussions to establish a joint satellite venture, codenamed “Project Bromo.” This ambitious initiative aims to challenge Elon Musk’s Starlink network and reshape Europe’s satellite sector, which has struggled with losses and competitive pressures from low-cost satellites in low Earth orbit (LEO).

KEY DETAILS

  1. Project Bromo – A European Satellite Champion:
    • The venture, modeled on missile maker MBDA, envisions a standalone entity combining satellite assets rather than a traditional acquisition structure.
    • This collaborative effort seeks to leverage the strengths of the three companies to create a scalable and competitive European satellite enterprise.
    • Leonardo CEO Roberto Cingolani confirmed discussions about adopting the MBDA model but noted governance structures may vary.
  2. Strategic Drivers:
    • Europe’s leading satellite makers, traditionally focused on high-complexity geostationary orbit spacecraft, are adapting to the rapid rise of smaller, cost-efficient satellites in LEO.
    • Cingolani emphasized that satellites could account for 75% of the space economy in the future, highlighting the need for Europe to stay competitive in this evolving market.
  3. Job Cuts Across the Industry:
    • Parallel to the satellite initiative, Airbus plans to cut up to 2,500 jobs in its Defence and Space division, representing 7% of its workforce, by mid-2026.
    • Thales has announced plans to reduce 1,300 space-related positions as part of restructuring efforts.
    • Most Airbus cuts are expected in its €2 billion space systems business, with reductions likely in France, Germany, the UK, and Spain.
  4. Historical Challenges:
    • The European space industry has long discussed restructuring but has faced delays due to competition concerns and governance complexities.
    • Despite previous attempts, including Airbus’ 2001 pledge to restructure the space industry after forming MBDA, substantial progress has been elusive.
  5. Timeline and Implications:
    • Project Bromo is still in early stages and could take years to materialize.
    • If successful, the joint venture would provide Europe with a robust satellite manufacturing entity capable of competing with global players like Starlink.

MARKET AND COMPETITION

  • Global Satellite Trends: The space economy is shifting toward LEO satellites, driven by demand for affordable, scalable solutions for global internet connectivity and communication.
  • Challenges from Starlink: SpaceX’s Starlink dominates the LEO market with its extensive satellite network, presenting a formidable challenge to European firms.
  • European Collaboration: The MBDA-inspired model may allow for better resource pooling and coordinated competition, reducing fragmentation in the European satellite market.

CONCLUSION

Project Bromo represents a significant step toward strengthening Europe’s position in the satellite industry. However, its success depends on overcoming technical and governance hurdles and aligning the diverse interests of Airbus, Thales, and Leonardo. Simultaneously, widespread job cuts underscore the challenges facing the European space sector as it navigates competitive pressures and structural realignments.