Airbus is exploring potential mergers for its space business as it faces significant financial challenges. During an earnings call on October 30, CEO Guillaume Faury indicated the company is evaluating options to consolidate specific segments of its Defence and Space division rather than merging the entire unit.
Faury highlighted the diversity of Airbus's satellite activities, which include communications, exploration, and science missions. He noted that while the ideal solution would encompass all segments, smaller-scale options could also be viable.
Speculation about a merger with Thales Alenia has circulated since summer, driven by declining orders for commercial GEO communications satellites. In June, Airbus reported a €900 million ($980 million) charge related to its Space Systems business and announced plans to reduce its Defence and Space workforce by up to 2,500 jobs by mid-2026.
Faury emphasized the importance of self-improvement, advocating for a disciplined approach to project bidding and realigning the space business for profitability. He acknowledged potential for consolidation within Europe, aiming to enhance competitiveness against non-European entities.
Concerns about the health of the European space sector have prompted responses from government bodies, including the European Space Agency (ESA). At an ESA Council meeting concluding on October 24, officials proposed increasing downpayments on new contracts to support struggling companies.
ESA Director General Josef Aschbacher remarked on the industry's pressure but refrained from commenting on the Airbus-Thales discussions, noting they are in preliminary stages. Airbus did not announce any new charges beyond the previously disclosed figures but is reviewing an unnamed space program that may lead to additional charges by year-end.
Faury described the ongoing review as a comprehensive assessment of the program, including supplier evaluations, with completion expected by the end of the year. CFO Thomas Toepfer confirmed progress but acknowledged the complexity of the analysis, which has delayed interim results.