TOULOUSE, 27 March - Airbus, the European aerospace giant, revealed that it is engaged in discussions with several European nations regarding new defense and space orders. This announcement, made during a company event in Toulouse, France, comes as the continent experiences a notable surge in defense spending, coupled with improving supply chains for Airbus’s core jetliner business. Senior executives, including Airbus Defense and Space CEO Michael Schoellhorn and Christian Scherer, CEO of the company’s civil aircraft division, provided insights into the ongoing talks and the broader implications for the aerospace industry. The timing of these negotiations aligns with a period of heightened geopolitical tensions and shifting economic dynamics, which are driving European governments to bolster their military and space capabilities.
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The increase in defense budgets across Europe is a key factor behind Airbus’s current negotiations. In recent years, nations have ramped up investments in military assets, spurred by concerns over regional security and a desire for greater strategic autonomy. Airbus, a leader in both commercial aviation and defense systems, is well-positioned to capitalize on this trend. Schoellhorn emphasized that the company anticipates significant growth in its space and air business, though he refrained from providing specific figures. He noted that European countries are particularly interested in acquiring space assets, including satellites, as alternatives to existing systems like Elon Musk’s Starlink network, which has dominated low Earth orbit communications. Additionally, there is demand for aerospace assets such as strategic airlift capabilities, which are critical for military logistics and rapid response operations.
Airbus’s defense and space division has faced challenges in recent years, including substantial financial losses tied to satellite programs. In 2024 alone, the company recorded charges of nearly $1 billion due to cost overruns and delays in projects like the OneSat telecommunications satellite initiative. These setbacks prompted a strategic overhaul, with Airbus announcing plans to cut up to 2,500 jobs in the division by mid-2026—a move aimed at streamlining operations and restoring financial stability. Despite these difficulties, the current spending surge offers a lifeline. Improved supply chains for its jetliner business, which accounts for over 70% of Airbus’s revenue, are also easing pressure on the company, allowing it to redirect resources toward defense and space opportunities.
The talks with European nations reflect broader industry trends, including efforts to reduce reliance on non-European suppliers and compete with emerging players in the space sector. Airbus is not alone in navigating this landscape; competitors like Thales and Leonardo are also exploring consolidations to strengthen their positions against U.S.-based firms and disruptive newcomers. Meanwhile, trade tensions, including potential U.S. tariffs on aerospace products, loom as a concern. Schceivinger cautioned that such measures could harm the industry, though he stressed it was premature to assess their full impact. For now, Airbus is focused on securing contracts that could solidify its role as a cornerstone of Europe’s defense and space ambitions, leveraging its expertise in military aircraft, satellites, and launch systems to meet the continent’s evolving needs.