Successes in 2014 Prompt Airbus To Reduce Space Layoffs

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PARIS — Airbus Defence and Space on Jan. 20 said its space division’s success in 2014 will allow the company to spare about 600 jobs that had been scheduled to disappear as part of a drive for savings in the search for higher operating margins.

The company also said it had received “lots of interest” from prospective buyers of its Vizada mobile satellite communications services division, whose nonmilitary activities have been put up for sale.

Airbus said its planned partnership with the European Space Agency to develop a business to speed data from Earth observation satellites and unmanned aerial vehicles to users via laser optical links is stalled because its government partners have not signed a commitment to purchase the data as anchor customers.

Airbus Defence and Space was created in July 2014 from three Airbus divisions focusing on space technology, military aircraft and defense electronics.

The parent Airbus company said it would keep the space and defense business, but only if it streamlined its activities and reduced its focus to space systems, tactical missiles and military aircraft. The newly consolidated division plans to shutter 23 production sites and reduce its 38,000-strong workforce by 5,300 posts by 2017. Eight facilities were closed in 2014, and the company’s head count was reduced by about 1,000.

Of these 5,300 jobs to be eliminated, nearly 2,500 were in the space division. Airbus is a major satellite builder and is prime contractor for the Ariane 5 heavy-lift rocket as well as France’s M-51 strategic missile.

But with the success of the company’s satellite division and the prospects for more work on launch vehicles with the new Ariane 6 heavy-lift rocket entering the development phase, the company will ease its planned cuts by 600 positions, said Francois Auque, the head of Airbus’ space division.

In a briefing here, Auque said the company’s new product lines for Earth observation and telecommunications satellites had registered successes on the export markets in 2014, including Airbus’ win of a Peruvian optical reconnaissance satellite contract and is first-ever telecommunications satellite award from direct-broadcast satellite television EchoStar Corp. of Englewood, Colorado.

Airbus’ 2014 wins include two electric-propulsion satellites, for SES of Luxembourg and Eutelsat of Paris. The company expects to sign, by this spring, a contract with Eutelsat for the first Eutelsat Quantum satellite design, which is a step toward software-defined satellite payloads that can be configured from the ground.

In total, Airbus booked firm orders last year for four telecommunications satellites, plus an undisclosed telecommunications payload; and 10 Earth observation satellites including two optical reconnaissance satellites for the United Arab Emirates in a contract originally signed in 2013 but re-signed in 2014.

Airbus also contracted with the Korea Aerospace Research Institute to build the radar instrument for South Korea’s Kompsat-6 radar Earth observation satellite.

EDRS. Credit: ESA
EDRS. Credit: ESA

Auque confirmed recent statements by ESA that the EDRS-C laser data-relay satellite, which Airbus ordered from OHB AG of Bremen, Germany, as part of an Airbus-ESA partnership, may not be built unless ESA and the European Commission agree to a service level agreement involving use of the system.

The agreement would commit the government agencies to purchase from Airbus a minimum volume of EDRS laser-delivered Earth images coming from the European Commission’s Copernicus environment-monitoring program and its Sentinel series of satellites.

“The program is not certain,” Auque said. “It is a public-private partnership between the European Space Agency and industry in which industry invests and, in return, ESA must assure a minimum usage, and we also sell to third parties. To assure this minimal use, ESA needs a budget, a part of which is to be furnished by the European Commission. As of today this financing has not been confirmed. I still hope we can find an agreement.”

Auque said he remains a believer in EDRS, whose goal is to have at least three satellites spread out along the geostationary arc 36,000 kilometers over the equator to receive, by laser links, images from low-orbiting Earth observations satellites and to speed their delivery to ground users. Relaying data from unmanned aerial vehicles is also part of the business plan.

Auque also said the Vizada telecommunications service business, especially in maritime satellite communications where it resells Inmarsat mobile satellite capacity, is “extremely profitable,” but that its nonmilitary business no longer is viewed as core to Airbus.

“We don’t need Vizada to deliver commercial capacity to military customers,” Auque said. “So we’ll sell Vizada — I hope for more than we paid for it.”

Airbus purchased Vizada in late 2011 for $960 million, saying that the acquisition would report $660 million in 2011 revenue and $95 million in EBITDA, or earnings before interest, taxes, depreciation and amortization.