Italy's Leonardo working with Thales, Airbus on new space strategy

ROME (Reuters) -Leonardo is working with France's Thales and Airbus on a joint strategy for the space sector, the head of the Italian aerospace and defence group said on Tuesday.

"We are strongly active in catalysing large European alliances... now we are working hard with Thales and Airbus on new strategic visions in space," Chief Executive Roberto Cingolani said during a hearing in Italy's lower house of parliament, without giving further details.

His comments come amid reports of Airbus and Thales exploring a tie-up of some space activities, with preliminary talks focusing on their overlapping satellite activities. A tie-up could be between Airbus and Thales Alenia Space, which is a 67%-33% joint venture between Thales and Leonardo.

Leonardo had declined to comment on the reports. Besides EU approval, any alliance or merger negotiations between Airbus and Thales Alenia Space would need the backing of the French and Italian governments.

Leonardo and Thales also have a satellite services joint venture, Telespazio.

Airbus and Thales Alenia Space are Europe's largest makers of satellites for telecommunications, navigation and surveillance.

Demand for their geostationary satellites is increasingly under pressure as traditional manufacturers face competition from massive constellations of expendable satellites in low Earth orbit, like the Starlink network of Elon Musk's SpaceX.

In its 2024-28 industrial plan, Leonardo said it would leverage opportunities in space, a sector it sees as key for defence in years to come and with room for further growth given it generated just under 4% of the company's annual core profit in 2023.

(Reporting by Giulia Segreti, editing by Alvise Armellini and Susan Fenton)