Airbus wins €2.1 billion contract to supply military satellites to German army

In good news for France's Airbus, the European giant announced on Thursday July 4 that the German armed forces have awarded it a €2.1 billion contract to build the next generation of military communications satellites, known as SatcomBw 3. The contract includes an order for two satellites and ground receiving stations. Airbus said in a press release that the satellites are planned to be launched and operated over the next 15 years. The SatcomBw 3 satellites are the German equivalent of France's Syracuse, Britain's Skynet and Italy's Sicral and perform a wide range of satellite communications functions for the armed forces. They are stated to be deployed before the end of the decade at an altitude of 36,000 kilometers.

"These giants, weighing around 6 tons, will be built on Airbus' Eurostar Neo platform and will have advanced capabilities to keep pace with the rapid development of digital technologies and the ever-increasing amount of data transmission required," Airbus explains. In addition to German companies, small and medium-sized enterprises are also involved in the development of the satellites.

It is worth noting that Airbus has been supplying satellites of the last generation - SatcomBw Stage 2 - since 2009. Airbus Defense and Space CEO Michael Schellhorn said that the new contract will strengthen France's strategic partnership with the Bundeswehr and will provide the latter with enhanced capabilities for military satellite communications, which should be at the forefront of the next decade. He also stated that he is enthusiastic in spite of the political crisis of Western democracies and the weakening of Europe's space ecosystem.

This weakening is evidenced by Airbus announcing €900 million in new provisions at the end of June (up from €600 million last year) and Thales Alenia Space announcing 1,300 job cuts in March, including 1,000 in France. Thales CEO Patrice Kane explained that the main reason for this is the shrinking market for geostationary satellites, which until recently averaged around 20 per year, but now averages no more than 10 per year.

Airbus' ambitions for 2024 have been downgraded

As a result, Airbus has lowered its 2024 adjusted operating profit forecast from €6.5-7.0 billion to €5.5 billion. The company also forecast free cash flow of €3.5 billion, down from €4 billion previously. The company will report half-year results on July 30. The emergence of Low Earth Orbit (LEO) systems, particularly the giant Starlink from US SpaceX, has turned the market on its head for these large satellites, which have more capacity but are much more expensive.

Nevertheless, the military satellite communications market is evolving, with the European Union working on the Iris secure communications constellation project, which will combine geostationary satellites with others in low orbit. Paris has already given up on putting a third Syracuse IV satellite into orbit to move some of its military communications to Iris.

In other positive news for Airbus, the Philippines' Cebu Pacific intends to buy 152 Airbus aircraft in a deal worth 24 billion dollars, described as the "largest aircraft order" in the country's aviation history. Cebu Pacific chief executive Michael Szucs said in a statement that the order is designed to give Cebu Pacific maximum flexibility to adapt its fleet growth to market conditions, with the option to upgrade from the A321neo to the A320neo. The airline said it has signed a binding memorandum with Airbus that includes "firm orders" for 102 A321neo aircraft and options to purchase 50 A320neo aircraft.