Europe's Airbus (AIR.PA), Thales (TCFP.PA) and Leonardo (LDOF.MI) are exploring plans to set up a new joint space company as they look to compete with Elon Musk's Starlink.
"Project Bromo", named after an Indonesian volcano, envisages a standalone European satellite champion modelled on missile maker MBDA, which is owned by Airbus, Leonardo and BAE Systems (BAES.L), three people familiar with the matter said.
Until now, Europe's leading satellite makers have said only that they are looking at working together to create greater scale in a sector marred by heavy losses, as the rapid growth of Elon Musk's Starlink network dominates low Earth orbit.
But although still at an early stage, talks have progressed far enough to earn a code-name inside Airbus and a preferred structure with a new company combining satellite assets, rather than one partner buying assets from the rest, the people said.
Leonardo CEO Roberto Cingolani told Reuters the talks involved various technical discussions, and confirmed the intended structure would be based on the MBDA model.
"That's the one, it is hard that it can be anything else," he said on the sidelines of an event in Rome.
Airbus and Thales declined to comment.
The merger proposals are separate from job cuts to be outlined by Airbus this week and could take years to implement, one source said.
But together, they represent a multi-speed effort to bring Europe's struggling space sector into shape to face tough competition.
