ESA plans measures to help the European space industry

WASHINGTON – The European Space Agency is proposing steps to support a space industry that has been under pressure lately, while keeping a close eye on one proposed deal.

During a media briefing following the ESA Council meeting on October 24, ESA officials said they were proposing changes such as increasing upfront fees on new contracts to provide a lifeline for companies that are struggling in the broader commercial market.

“The industry as a whole is under pressure and we, as ESA, are studying the situation very carefully,” said ESA Director General Josef Aschbacher. “We will put forward some measures to support some of the pressure that we are seeing from industry to make sure that the implementation of programs goes well.”

Those pressures included major losses at Airbus Defense and Space, which committed nearly $1 billion to space programs in June and announced Oct. 16 it would cut 2,500 jobs by mid-2026. Airbus is expected to release more details in its quarterly earnings report on Oct. 30.

One step, he said, is to increase the amount of upfront fees that ESA pays to companies when signing new contracts. These down payments currently amount to 10-15% of the total contract amount, but Aschbacher said they could increase to 35% depending on the project.

Another measure would be to allow companies to provide “partial deliverables” to pay for contract milestones. These partial results will lead to partial payments, which he said will help companies improve cash flow.

The moves come amid reports that Airbus is in talks with Thales Alenia Space to potentially merge at least part of their commercial space business. Both countries have suffered from falling demand for commercial geostationary communications satellites. Both are also major ESA contractors.

Aschbacher noted at the briefing that the lack of profitability in these companies’ space businesses is due to a lack of commercial work, not their ESA business. “But yes, it extends across the entire ecosystem,” he said, including their subcontractors.

He declined to comment on any merger between the space divisions of Airbus and Thales, but noted that if the deal goes through it would have a “major impact” on ESA. “It’s too early to make any comments because this is the very beginning of the discussion.”

One incentive for these companies could be contracts to create elements of the IRIS² secure communications system for the European Union. Both Airbus and Thales have withdrawn from the SpaceRISE consortium, which is the sole bidder for the constellation, but plans to participate as contractors.

Laurent Jaffard, ESA’s director of communications and secure communications, told a briefing that the European Commission received the final, binding proposal from SpaceRISE in early September. “We are awaiting news from the commission on the potential choice of constellation,” he said, noting that ESA is working “hand in hand” with the European Commission to evaluate the proposal.

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