Investing.com – Europe's space sector is facing a turbulent period marked by project delays, cost overruns and rising competition from global players.
Airbus, an industry leader, has absorbed €1.5 billion in charges into its satellite division over the past two years, while Thales (EPA:) Alenia Space is expected to post losses in 2024. Launch service providers are also under pressure; The Avio Vega C rocket is still grounded after failing in 2022, and the Ariane 6 rocket, already delayed by four years, has only managed one flight since its debut in July 2024.
The European satellite industry has been further stressed by the emergence of low-Earth orbit constellations, which have disrupted the traditional demand for geostationary satellites.
“Space is clearly becoming more strategic, both in terms of business connections, but also in defense,” the Bank of America analyst said, amid the rapid progress of SpaceX, Blue Origin, and emerging space programs in China, India and Japan. SpaceX has conducted 134 Falcon rocket launches in 2024, with a 96% success rate for booster landings.
Bank of America cited concerns about Europe's fragmented supply chain, inflationary pressures, and implementation risks that could derail the project before a crucial design review in 2028.
European space companies are increasingly considering mergers to remain competitive. Airbus CEO Guillaume Faury recently hinted at potential partnerships, in line with a year-long campaign for a unified approach. Bank of America analysts believe that Europe must adopt a global mindset, echoing the success of SpaceX's vertically integrated model.
