ESA plans measures to help European space industry

WASHINGTON — The European Space Agency is proposing steps to support a space industry that has been “under pressure” recently while keeping a watchful eye on one proposed deal.

During a media briefing after an ESA Council session Oct. 24, ESA officials said they are proposing changes such as increasing the size of downpayments on new contracts to provide a lifeline to companies that have struggled in the broader commercial market.

“In general, industry is under pressure and, as ESA, we very carefully look into the situation,” said ESA Director General Josef Aschbacher. “We will propose some measures to support some of the pressures we have seen on the side of industry to make sure out implementation of programs is going well.”

Those pressures have included major losses at Airbus Defence and Space, which took a charge of nearly $1 billion on 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 a quarterly earnings announcement Oct. 30.

One move, he said, is to increase the size of downpayments ESA makes to companies when signing new contracts. Those downpayments are currently 10–15% of the overall contract size, but Aschbacher said that could increase to as much as 35% depending on the project.

Another measure is to allow companies to provide “partial deliverables” for payment for contract milestones. Those partial deliverables would result in partial payments, which he said would help with companies’ cash flow.

Those measures come amid reports that Airbus has been in talks with Thales Alenia Space about a potential combination of at least part of their commercial space businesses. Both have suffered from a drop in demand for commercial geostationary communications satellites. Both are also major contractors to ESA.

Aschbacher noted at the briefing that any lack of profitability in those companies’ space business comes from that lack of commercial work and not their ESA business. “But yes, this trickles down into the whole ecosystem,” he said, including their subcontractors.

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

One boost for those companies would be contracts to build elements of the IRIS² secure connectivity constellation for the European Union. Both Airbus and Thales withdrew from the SpaceRISE consortium that is the sole bidder for the constellation but plan to participate as contractors.

Laurent Jaffart, ESA’s director of connectivity and secure communications, said at the briefing the European Commission received a final, binding offer from SpaceRISE in early September. “We are waiting some news from the commission side on a potential award of the constellation,” he said, noting that ESA was working “hand in hand” with the European Commission on the evaluation of the proposal.