UK risks losing key role in European space industry over satellite contract, says Airbus boss

Skynet 6 is the contract to manufacture the UK’s next military communications satellites. The system will replace Skynet 5, which Airbus operates. These satellites are important because they will carry the British armed forces’ most sensitive communications through to 2042. The decision therefore affects national security as well as industrial policy.

The satellites are described as sovereign, meaning the UK wants control over the capability built for its armed forces. Airbus currently operates Skynet 5, while Lockheed Martin is proposing a British subsidiary with a UK design authority and chief engineer. The system must also withstand counterspace threats, including radio jamming, hacking and direct physical attacks.

The government has delayed choosing between the bids. Some sources believe the Ministry of Defence prefers Lockheed Martin, but no final decision has been made. Burnham and Chancellor John Healey will make the final decision after considering cost and capability.

The Skynet 6 manufacturing contract is worth £2.4bn. Its scale makes the decision important beyond the satellites themselves. It could influence Britain’s military-space capability, regional investment and the future of Airbus’s UK operations. The contract is being judged on financial terms and the capabilities each company offers.

Airbus’s UK satellite operations employ 600 people at sites in Stevenage and Portsmouth. Senior industry figures have claimed those sites might not remain viable without the next Skynet contract, although closure is not certain. Lockheed Martin’s proposed north-east investment would create 500 high-skilled jobs, according to regional mayor Kim McGuinness.

The Lockheed bid also promises a new manufacturing facility in Durham and £100m of investment. These figures describe possible outcomes, not a final result. The government has not announced its choice, and the article does not say whether all the proposed jobs would be created immediately.

Airbus and Lockheed Martin are competing because the UK needs a manufacturer for Skynet 6, the successor to the Airbus-operated Skynet 5 system. The winner would help deliver satellites carrying Britain’s most sensitive military communications until 2042. The choice also affects jobs, facilities, supply chains and Britain’s position in European military space.

Airbus is arguing that losing the contract could weaken its UK satellite operations. Lockheed Martin is offering a different industrial proposition: a new facility in Durham, a UK design authority and a UK chief engineer. It says its British subsidiary would control satellites built in the UK and develop a regional supplier ecosystem.

The competition has become politically charged. North-east politicians support the Lockheed bid because of its proposed factory and jobs. Airbus chief executive Guillaume Faury has lobbied the prime minister, warning about long-term European consequences. The Ministry of Defence may prefer Lockheed, but no final decision has been made.

In this contest, a sovereign space capability means the UK would have a nationally controlled military satellite system. The article links sovereignty to British facilities, British technical leadership and control over satellites carrying the armed forces’ most sensitive communications. It does not provide a formal definition, but Lockheed Martin says its UK subsidiary would control satellites built in Britain.

Control could matter during a crisis because military communications must remain available when political relationships are strained. The article points to Ukraine’s complaint that access to Elon Musk’s Starlink network was restricted, apparently at the US government’s behest. That episode intensified questions about whether the UK can rely on US-controlled space services.

Both bids must be considered for capability as well as price. A related government document warns that satellites face jamming, hacking and direct physical attacks. The article does not say which bid would resist those threats better.

Airbus says the contract could determine whether its UK satellite operations remain viable. Senior industry figures have previously claimed that losing Skynet 6 might lead Airbus to close its Stevenage and Portsmouth sites, where 600 people work. Airbus also warns that Britain could lose a long-term role in European military satellite communications.

The wider context is Project Bromo, a planned merger involving the space subsidiaries of Airbus, Thales and Leonardo. The companies want to create a single European champion large enough to rival leading US firms. Faury is understood to have warned that a weaker Airbus UK operation could prevent Britain becoming the merged group’s European hub.

These outcomes are warnings, not confirmed consequences. The government has delayed its choice, and the article says some sources think Lockheed’s bid is preferred. Burnham and John Healey must still weigh price, capability, regional investment and strategic effects before deciding.

The article does not say that a new Lockheed Martin factory would automatically replace Airbus’s existing operations. Lockheed’s proposal is for a new manufacturing facility in Durham, while Airbus already has satellite sites in Stevenage and Portsmouth. In principle, those are different facilities and investments. However, the government has not said whether both would receive enough work to remain viable.

The key mechanism is contract allocation. Airbus currently operates Skynet 5 and says losing the next Skynet contract could threaten its UK satellite business. Senior industry figures have claimed that Airbus might close its two sites, which employ 600 people. Lockheed’s bid promises a new UK ecosystem, £100m of investment and 500 high-skilled jobs.

The current reality is unsettled. No final decision has been made, and the article gives no plan for supporting both companies. Burnham and John Healey will consider the bids’ costs and capabilities, alongside their industrial consequences.

Military communications satellites connect armed forces with secure communications over long distances. They carry signals between users and ground systems, helping forces exchange information when ordinary links are unavailable. The article focuses on Skynet’s role in carrying the British armed forces’ most sensitive communications, rather than explaining the engineering in detail.

The basic mechanism is straightforward: a transmitter sends a signal to a satellite, and the satellite relays it onward to an intended receiver. Radio jamming can overwhelm or interfere with the signal. Hacking can target connected systems or satellite operations. A direct physical attack could damage or destroy the spacecraft. These examples come from a government document for a related system.

The document describes such capabilities as “counterspace” threats. The article does not identify a specific attacker or say which bid offers stronger protection. It does show why the next system’s resilience and control matter when the satellites may carry sensitive communications until 2042.