The shift from satellites in geostationary orbit (about 22,250 miles above Earth), an area that Europe has traditionally led, to low-earth orbit (100 miles to 1,200 miles above Earth), which has been championed by SpaceX\u2019s Starlink among others, has been another driver behind the merger. <\/p>\n
![\"SpaceX](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/\/3520e47c-9454-4dc3-bbc5-4e47b2b876f1.jpg\")
<\/p>\n
The European joint venture will compete with Elon Musk\u2019s SpaceX<\/p>\n
JOE BURBANK\/ORLANDO SENTINEL\/TRIBUNE NEWS SERVICE\/GETTY IMAGES<\/p>\n
Geostationary satellites orbit the Earth far higher than low-earth satellites, meaning they stay fixed above a single point on the Earth. The first geostationary satellite was placed in orbit in 1964 and was used to transmit live coverage of the summer Olympics from Japan to the United States. <\/p>\n
Low-earth orbit satellites were first launched in the 1950s, but it was not until recently that they were able to challenge the effectiveness of geostationary alternatives. <\/p>\n
Europe has generally struggled to compete in the low-earth orbit sector. Both Airbus and Thales Alenia Space, a joint venture by Thales and Leonardo that makes satellites and related equipment, have had to restructure their space businesses in recent years, with heavy job losses. These restructurings have been an important driver behind merger talks, which have been discussed since 2019.<\/p>\n
While the concept of a European tie-up has been floated for years, the idea gained traction last year when top European Union<\/a> officials called for a \u201cparadigm shift\u201d to keep the region competitive.<\/p>\n \u2022 Royal Navy sailors to use Elon Musk\u2019s Starlink to watch TV<\/a><\/p>\n OneWeb<\/a>, one of Europe\u2019s main competitors to Starlink, has seen its revenues rise over the past year, but Eutelsat, its French owner, has struggled to realise value from the service and has been weighed down by its geostationary legacy business. In August, the company reported a \u20ac1.1 billion annual net loss, compared with a \u20ac310 million loss the previous year.<\/p>\n \u201cI think the difference of what we\u2019re talking about here is the pace and the scale of our ambition,\u201d a spokesman for Airbus said. \u201cSo if you really want to grow at the rate that we see the opportunity for, we think we can achieve much more by scaling and collaborating across Europe, more formally than we do currently.\u201d<\/p>\n The new company will develop technologies and solutions for space infrastructure and services. Launch operations into space, an area in which Europe struggles to compete with the US, will not be part of the effort. Arianespace, Europe\u2019s heavy-lift rocket launch company, will not be part of the combination.<\/p>\n Airbus will contribute its space systems and space digital business, while Leonardo and Thales will contribute their shares in Thales Alenia Space and Telespazio, a satellite operator co-owned by the pair. Thales SESO, the company\u2019s optics division, will be part of the new joint venture.<\/p>\n Shares in Leonardo rose by \u20ac0.84, or 1.7 per cent, to \u20ac51.34 in Milan; in Paris Thales was up by \u20ac1.50, or 0.6 per cent, to \u20ac260.70, and Airbus rose by \u20ac1.45, or 0.7 per cent, to \u20ac207.25.<\/p>\n Behind the story<\/p>\n Plans to create a pan-European space champion have been drawn up and dropped several times over the past decade. The model has always been MBDA, the missiles business created in 2001 through the merger of parts of A\u00e9rospatiale, the French defence contractor, Alenia Marconi Systems of Italy and the Anglo-French consortium of Matra BAe Dynamics.<\/p>\n Space has proved more difficult even than cutting-edge defence technology. European governments were reluctant to cede control of the ability to make and deploy satellites and other space equipment, an ability deemed critical to protecting their sovereign interests. Long-running discussions nearly resulted in a deal in 2019, but faltered at the last minute.<\/p>\n This time round, however, the governments\u2019 hands have been forced. Thanks largely to Elon Musk<\/a>\u2019s SpaceX \u2014 with help from other tech billionaires such as Amazon\u2019s Jeff Bezos<\/a> \u2014 America has raced ahead in space technology.<\/p>\n SpaceX\u2019s reusable rockets and frequent launch schedule have made possible the deployment of big satellite constellations. Starlink, a division of SpaceX, has about 8,500 satellites in orbit, while Bezos\u2019s Project Kuiper<\/a> plans to put up more than 3,200 in the next few years. <\/p>\n To keep up, Europe\u2019s space companies need to cut costs and show some commercial nous, rather than being led by domestic requirements. It is hard to say whether the new merged company will be free from such considerations, but it is at least a step in the right direction. <\/p>\n