WASHINGTON -- The European Space Agency (ESA) is proposing measures to bolster a space industry facing significant challenges, particularly in light of recent job cuts at Airbus Defence and Space. During a media briefing following an ESA Council session on October 24, ESA officials outlined potential changes aimed at supporting companies impacted by a downturn in the commercial market.
ESA Director General Josef Aschbacher noted, "In general, industry is under pressure and, as ESA, we very carefully look into the situation. We will propose some measures to support some of the pressures we have seen on the side of industry to make sure our implementation of programs is going well." Airbus Defence and Space has reported substantial losses, including a nearly $1 billion charge on space programs in June, and announced plans to cut 2,500 jobs by mid-2026.
To provide relief, ESA is considering increasing downpayments on new contracts from the current range of 10-15% to as much as 35%, depending on the project's nature. Additionally, the agency may allow companies to submit "partial deliverables" for payment at contract milestones, which could improve cash flow for struggling firms.
These proposals emerge amid discussions between Airbus and Thales Alenia Space regarding a potential merger of their commercial space businesses, both of which have been adversely affected by decreased demand for geostationary communications satellites. Aschbacher emphasized that profitability issues stem from the commercial sector rather than ESA contracts, but acknowledged the broader implications for the industry ecosystem.
While he refrained from commenting on the merger specifics, he indicated that such a deal could have significant ramifications for ESA. A potential boost for the companies could arise from contracts to develop elements of the IRIS² secure connectivity constellation for the European Union. Although Airbus and Thales withdrew from the SpaceRISE consortium, they plan to engage as contractors.
ESA's director of connectivity and secure communications, Laurent Jaffart, confirmed that the European Commission received a final offer from SpaceRISE in early September and is awaiting further updates regarding the constellation's potential award, with ESA collaborating closely with the Commission on the evaluation process.