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Airbus, Safran Plan Satellite-Launch Technology Venture

June 16 (Bloomberg) -- Airbus Group NV and Safran SA plan to create a joint venture to speed development of satellite-launch vehicles while limiting costs as competition increases from across the Atlantic.

The two companies, already the two largest industrial partners in pan-European space-rocket manufacturer Arianespace, expect to combine work on some contracts in the new venture by the end of this year, Airbus and Safran said today in a statement, without specifying financial details.

Airbus Chief Executive Officer Tom Enders has said that Arianespace must cut costs to remain competitive against the likes of U.S. billionaire Elon Musk’s Space Exploration Technologies, or Space-X. The Hawthorne, California-based manufacturer showed itself as a competitor in 2012 when it became the first private company to dock an unmanned supply ship at the International Space Station. It’s now pushing to compete in the Pentagon’s $68 billion satellite-launch market.

Toulouse, France-based Airbus, the maker of the double-decker A380 superjumbo, owns about a third of Arianespace. Paris-based Safran, which helps make the world’s most popular commercial-aircraft engine, holds about 10.6 percent of the rocket maker, according to the Arianespace Website.

Arianespace is preparing successors to the current Ariane 5 rocket. An interim version, the Ariane 5 ME, is planned for production in 2018, and to be followed by a version dubbed the Ariane 6.

Airbus’s rocket-building operations and Safran’s launcher-engine unit will work together by the end of this year on projects in the new venture’s first phase, the companies said. At a later, undefined point, the industrial assets would be pooled to create a company.

France, including the government’s space-research arm, controls 50 percent of Arianespace, with German and Italian entities owning smaller stakes.

To contact the reporter on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net Tom Lavell

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