European Aerospace Giants Join Forces In Bid To Challenge SpaceX Dominance

Airbus, Leonardo, and Thales have agreed to merge their satellite divisions, forging a powerful European joint venture with the explicit aim of taking on Elon Musk’s SpaceX. After months of negotiations, these leading aerospace groups will bring together a workforce of 25,000, projecting annual revenues of €6.5 billion based on 2024 figures. Headquartered in Toulouse, the company intends to be operational as soon as 2027, drawing inspiration from past successful European defence collaborations such as the MBDA missile consortium.

The structure of the deal sees Airbus holding a 35 percent stake, with Leonardo and Thales each owning 32.5 percent. The partners are promising that each country involved will retain its existing capabilities, in order to address sovereign concerns, with no site closures planned. Executives from the three companies point to widespread disruption in the satellite sector, primarily attributed to the advances achieved by SpaceX, as a major factor in this bold venture. Increased governmental investment in space programmes by the United States and China has also highlighted the need for European competitiveness.

Much of the urgency behind the move lies in the market’s shift from geostationary satellites, traditionally a European stronghold, towards low-Earth orbit satellites—the domain where SpaceX’s Starlink has established dominance. Starlink now controls a network of approximately 8,500 satellites, reshaping the sector and forcing rivals to adapt or combine resources. Europe’s previous struggles to break into the low-Earth orbit segment contributed to significant restructuring for both Airbus and Thales Alenia Space, with corresponding job losses acting as a catalyst for deeper cooperation.

Under the arrangement, Airbus will contribute its space systems and digital businesses, whilst Leonardo and Thales will bring their combined stakes in Thales Alenia Space and Telespazio. The optics division of Thales will also be wrapped into the new entity. Project leaders expect operational savings in the mid-triple-digit millions of euros within five years of completion. Shares in all three companies have responded positively to the announcement, suggesting renewed market confidence in Europe’s strategic direction.

The announcement comes after years of frustrated attempts to create a pan-European aerospace champion. Previous efforts faltered due to national interest and an unwillingness among governments to relinquish independent control over satellite capabilities, a critical factor for national security. Recent developments in US and Chinese space prowess have tipped the balance, making consolidation unavoidable for future competitiveness. While the joint company will not handle space launch operations—leaving Arianespace, the current European launch provider, outside the arrangement—leaders believe the move will focus Europe’s resources on innovation and industry scale in the rapidly changing satellite telecommunications landscape.

With this merger, the European aerospace sector signals a willingness to prioritise industrial scale, cut costs, and accelerate research and development. Space technology remains a symbol of political power and economic potential. The coming years will reveal whether this new coalition has found the formula needed to challenge America’s swift progress and restore Europe’s place as a global space contender.