The impact in Spain of the combined space capabilities of Airbus, Leonardo and Thales
- Indra remains on the sidelines of the merger
- An integration process that is expected to be completed in 2027
- What each partner contributes to the common pot
Whether by chance or design, the fact is that the recent agreement signed between the industrial corporation Airbus, the Italian multinational Leonardo and the French technology company Thales to form a European satellite macro-company coincided on 23 October with the successful launch of the enormous Spanish Spainsat NG-II, weighing more than 6 tonnes, which flew into space aboard Elon Musk's Falcon 9 launcher from Cape Canaveral on the Atlantic coast of Florida.
On that very day, the chief executive of Airbus, 57-year-old Frenchman Guillaume Faury; Roberto Cingolani, 63, of the large Italian aerospace and defence corporation Leonardo; and Patrice Caine, 55, of the large French technology company Thales, were sounding the trumpets of their campaigns to notify the whole world that they were beginning to integrate their respective capabilities and synergies in the field of satellites and associated services, but ruling out the inclusion of launchers.
In light of the above, it is worth asking to what extent the new path taken by Airbus, Leonardo and Thales, which has been widely publicised, will affect the interests of the national industry and the important subsidiaries and manufacturing facilities that the three large companies have in Spain. Firstly, it affects the space systems division of Airbus Defence and Space, which has a large 36,000-square-metre plant in Getafe, some 12 kilometres south of Madrid, employing around 550 technicians and inaugurated on 13 March 2023 by King Felipe VI.
Under the management of Raquel González Sola since last January, the impressive factory houses 22,000 m² of automated and serial manufacturing and assembly of large carbon fibre structures for the European Ariane 6 and Vega-C launchers, as well as payload adapters and separation systems for Mitsubishi Heavy Industries' Japanese H-3 rockets and SpaceX's Falcon 9 rockets in the United States.
However, Airbus ‘does not plan to transfer these capabilities to the new company’, according to a joint statement, says a Spanish space industry executive. Instead, the 14,000 m² dedicated to the development, manufacture and integration of satellites and their on-board equipment, such as scientific instruments and advanced flat and parabolic antennas, will remain.
Airbus also has the Airbus Crisa facilities in Tres Cantos, some 25 kilometres north of Madrid. Its managing director is Fernando Gómez-Carpintero, with more than 500 technicians dedicated to the development and manufacture of sequential electronics for rockets, active antennas, and electric propulsion and power management units for satellites, orbital infrastructures and American Mars vehicles. For the time being and ‘until the final integration, the company will continue to operate independently’.
Indra remains on the sidelines of the merger
The third link in Airbus Defence and Space in Spain is Airbus GeoTech, whose activity focuses on what is known as connected intelligence. Its team is headed by Roser Roca and has no more than 50 people located in Barcelona.
Its focus is on geographic information systems, geospatial digital services, geospatial software development, and 2D and 3D cartography. It also develops topographic maps for the civil and military markets, terrain obstacle databases, and markets images provided by Airbus Earth observation satellites.
GeoTech and the Italian-French company Telespazio (67% Leonardo and 33% Thales) have many areas of common activity in the fields of defence, cartography and the creation of high-resolution maps, planning and monitoring of civil engineering projects. Headquartered in Rome, Telespazio is present in Spain through Telespazio Ibérica, led by Carlos Fernández de la Peña, with its main offices in Madrid and Barcelona, from where it offers services to generate cartographic data and develop IT solutions through the integration of Geographic Information Systems (GIS), telecommunications, and mobile devices.
Thales Alenia Space España is a subsidiary of Thales Alenia Space, a company owned 67% by the French company Thales and 33% by the Italian company Leonardo. Located, like Airbus Crisa, in the Madrid Technology Park in Tres Cantos, it has been headed by Ismael López since May 2024. With a workforce of over 500 technicians, the company specialises in advanced antennas and equipment for communications satellites.
It assumes full responsibility for the development of the Geo-QKD project for the distribution of quantum keys from 36,000 kilometres and also plays a key role in the Sentinel Earth observation satellites of the EU's Copernicus constellation and in the Galileo satellites, known as the European GPS.
What Airbus, Leonardo and Thales have not allowed and have sidelined is Indra Space, a subsidiary of Indra, from getting involved in the new industrial corporation that is in the process of being formed. The arguments put forward by its CEO, José Vicente de los Mozos, with the full support of the Spanish ministries of Defence, Industry, Science and Finance, have not had the desired effect on the powerful Airbus boss, Guillaume Faury, the head of Leonardo, Roberto Cingolani, or the head of Thales, Patrice Caine, who compete and collaborate at the same time for dominance of the space sector in the EU.
An integration process that is expected to be completed in 2027
The capabilities that Indra has put on the table of the tripartite to assert the current potential of its subsidiary Indra Space have been of no use. The triumvirate considers that Indra's purchase of the company Deimos ‘does not add specific weight’ to the group. Deimos is headed by Simone Centouri and specialises in the manufacture and integration of small satellites, such as DRACO for the European Space Agency (ESA), and the development of flight subsystems and control software.
Nor has the recent decision to replace Fernando García Martínez-Peñalver at the helm of Indra Space with Luis Mayo, a veteran of the aerospace and defence sector, been taken into account. Mayo took up his post on 1 October and has been given the mandate to ‘consolidate the company as a unique player in Europe with the capacity to cover the entire value chain of space projects’, from designing extraterrestrial missions, manufacturing satellites, building ground segment facilities, and marketing satellite images.
The management and financial teams of Faury, Cingolani, and Caine, advised by economists and lawyers specialising in mergers and acquisitions from the investment entities Goldman Sachs and Bank of America, have not attached any significant value to the fact that the Spanish technology company is set to ‘finalise the purchase of the Spanish commercial satellite communications operator Hispasat next November’ – which includes control over Hisdesat, the crown jewel – as acknowledged by Indra's chairman, Ángel Escribano, in mid-October.
Even less value has been placed on the recent trials with the IOD-1 and 2 demonstration satellites by Startical, a public-private company which, according to its shareholders, Indra and ENAIRE, ‘has achieved the first real-time voice communication between an aircraft pilot and an air traffic controller using VHF signals transmitted via satellite’. Startical's expectations are to deploy and operate a constellation of 200 satellites in low orbit to become the first company to offer global aeronautical communication and surveillance services.
Despite the rejection, the technology company chaired by Ángel Escribano appears immune to discouragement, at least on the surface, and continues to hope that its revived space subsidiary ‘will find a place to join the tripartite project’. However, Indra's strengths in joining the satellite coalition, however strongly supported by La Moncloa, are no match for those of giants Airbus, Leonardo and Thales, meaning that Indra has ‘very little chance of success’, according to executives familiar with the national and international space sector.
The agreement reached by the three European industrial giants is still the first step in a long and complex process that its protagonists have anticipated will ‘conclude in 2027’, although on a date that has not yet been determined. The aim is to remove from their parent companies the industrial and digital services aspects related to the design, development, manufacture and operation of satellites, so it is clear that the surgery to be performed will also be painful in some cases.
What each partner contributes to the common pot
The only joint statement released by Airbus, Leonardo and Thales places the new European space giant under the same corporate and legal umbrella, and although the official line is that the purpose of the integration is to ‘consolidate Europe's strategic autonomy in space’, as already mentioned, the space launchers aspect is left aside and the focus is on communications, global navigation, Earth observation, scientific research, exploration and defence and security satellites.
What is set to become the European Union's first macro-company for satellites and digital space services will be built on the basis of the manufacturing and testing capabilities and infrastructure of Airbus Space Systems, the largest of which is in Toulouse (France), but also in Friedrichshafen, Ottobrunn/Taufkirchen and Bremen in Germany.
Thales will divest its stake in Thales Alenia Space (67%), whose main factory is in Cannes (France), and will also contribute Telespazio (33%) and the entirety of Thales SESO, which specialises in optical systems for orbiting telescopes and is based in Aix les Milles, near Marseille, France. Leonardo will include its entire Space Division, 33% of Thales Alenia Space and 67% of Telespazio, with factories in Rome, Milan, Turin and L'Aquila.
To allay the concerns of the workforce that may be affected by the integration, the three industrial corporations assure that the resulting macro-company will employ ‘around 25,000 professionals’ in Europe, will be jointly owned by Airbus, Leonardo and Thales, with shareholdings of 35%, 32.5%, and 32.5% respectively, and ‘will operate under joint control, with balanced governance between shareholders’, it clarifies. It also points out the capabilities and infrastructure that are planned to be separated from each of the three parent companies:
The integration between Airbus Space Systems and its alter ego Thales Alenia Space has been on the table for more than a decade. The two major satellite manufacturers were determined to pool their capabilities and reach an agreement to stop competing with each other and face the emergence of new industrial players in China and the United States, with lower costs and manufacturing times. While the major strategic operation sponsored by Paris and Rome continues, Spainsat NG-II – the twin of NG-I, in orbit since last January – is heading towards its final orbital position at 30º West, 36,000 kilometres from Earth.