Airbus Group and Safran are set to create a 50-50 joint venture, to combine their work on space launcher activites as Europe looks to reduce costs of its future rockets in order to remain competitive.

This JV will combine expertise in the launcher systems from Airbus Group with propulsion systems from Safran.

The initiative leverages the preparatory activities carried out over the past two years under the guidance of the European Space Agency (ESA) and the French Space Agency CNES, in line with the rules set by the ESA ministerial conference in November 2012.

The current industrial initiative intends to further develop and accelerate entry-into-service of the Ariane 5 ME launcher, an enhanced variant of Ariane 5, including an improved upper stage based on the Vinci engine.

"The current industrial initiative intends to further develop and accelerate entry-into-service of the Ariane 5 ME launcher."

It also proposes to develop the Ariane 6 launcher in a jointly agreed configuration, able to fulfil various missions as expressed by ESA, the National Space Agencies, Arianespace and satellite operators.

Airbus Group and Safran have been complementary partners in the launcher business, with a row of successful Ariane launches for more than a decade.

Speaking about the development, Airbus Group chief executive officer Tom Enders said: "Our agreement with Safran is the starting point of an exciting journey towards a more integrated, more efficient and hence more profitable launcher business in Europe."

Safran chairman and chief executive officer Jean-Paul Herteman said: "This new joint entity will be a major worldwide player in the launcher domain, with the aim to benefit from growth and better serve institutional as well as commercial customers."

During the first phase, Airbus Group and Safran would create a joint programme company in order to contribute their respective civil programme contracts, as well as key participations related to civil launcher activities.

Subsequently, the companies will contribute industrial assets in order to create a fully-fledged jointly owned competitive company.

The signing of the transaction’ first phaseand an initial start of JV operations are expected before the year-end.

Defence Technology