A landmark proposal to merge the space operations of Airbus, Thales, and Leonardo into a new European aerospace giant is facing a lengthy delay, with implementation unlikely before 2028 — a timeline that is sparking concern across the continent’s aerospace and defense sectors. According to a report by the Financial Times, the proposed merger is intended to create a unified powerhouse with annual revenues of approximately €5 billion, but the complexity of the deal and the intense political and regulatory scrutiny involved mean that progress will be slow.
The merger plan, initially floated last year, envisions consolidating the satellite manufacturing, space systems, and services arms of the three companies into a joint venture. However, multiple sources close to the talks told the Financial Times that even if the companies reach agreement by the end of 2025, the regulatory process could delay the launch of the new enterprise until 2028.
“If you are optimistic, the merger could go faster but it is very complex,” one individual with knowledge of the discussions told the FT.
The delay comes at a critical time for Europe’s space sector, which is struggling to keep pace with the rapid innovations led by Elon Musk’s SpaceX. The U.S. company’s Starlink satellite network has disrupted global satellite markets, capturing over 5 million customers and expanding aggressively into aviation, maritime, and defense segments. Its growing dominance underscores Europe’s urgent need for a more agile and competitive space industry.
The merger would also touch on issues of sovereignty and employment, with over 20,000 jobs across France, Germany, Italy, the UK, and beyond potentially affected. France and Germany, in particular, are grappling with the implications for national industrial strategies. German stakeholders are concerned that the combination of Airbus and Thales’s space divisions could marginalize local companies and shift more power to France.
Adding to the friction, a French parliamentary report published in May warned lawmakers to oppose any merger that might inadvertently strengthen German competitors through forced asset sales. The report also highlighted the vulnerability of Europe’s satellite sector, which has seen steep declines in demand for traditional geostationary telecom satellites, a space where European players once held strong positions.
Industry executives told the FT that the three-year delay to consolidate operations was unacceptable, especially as SpaceX continues to outpace European efforts. Airbus has already absorbed more than €2 billion in losses from underperforming space contracts since 2023 and announced 2,000 job cuts. Thales Alenia Space, a joint venture majority-owned by Thales and minority-held by Leonardo, has shed nearly 1,300 jobs in the last two years.
“Elon Musk came close to destroying the European space industry,” said Sash Tusa, an analyst at Agency Partners, highlighting the existential pressure facing traditional players.
Despite concerns, supporters of the merger argue it is a necessary step toward establishing a robust, sovereign industrial base in an increasingly strategic sector. The MBDA missile consortium — a successful joint venture between Airbus, Leonardo, and BAE Systems — is often cited as a model, though insiders acknowledge that achieving similar integration in the space domain will be far more difficult and time-consuming.
“Typically, industries merge when they’re in trouble,” said OHB chief executive Marco Fuchs, questioning the timing of the merger when European space budgets are finally poised for expansion. The EU’s €800 million defense fund and increased German investment have created a rare moment of fiscal opportunity.
Even so, several satellite customers and industry insiders have expressed alarm at the prospect of diminished competition. With fewer manufacturers and service providers in the market, costs for projects like Europe’s Iris2 satellite broadband initiative could rise.
In April, Airbus CEO Guillaume Faury described the project as “a work in progress,” and emphasized that the companies are actively engaging with stakeholders to outline the potential benefits. Insiders also suggested the initial merger phase may avoid major job cuts or national specializations to smooth political acceptance.
But critics warn that without streamlining overlapping capabilities, the financial savings may be minimal. “If you are keeping all the industrial capabilities, then the savings are in the back office. That won’t be anywhere near sufficient,” said Carissa Christensen, CEO of space consultancy Bryce Tech.
Still, some believe the long road to integration is worth pursuing. “It will be very long and difficult but it has to be done,” said an executive familiar with MBDA’s formation. “This is the time to increase the budget and to have a more ambitious plan for space. Europe has to take this opportunity.”
