François Lombard, Senior Vice President Intelligence, Airbus Defence and Space, and Philippe Pham, Senior Vice President Earth Observation & Science, Airbus Space Systems in an interview, discuss the opportunities and challenges ahead, space sustainability imperative, and the new space race.
What’s new with Airbus? What are your plans?
Philippe Pham (PP): We intend to further build on Pléiades Neo’s unique capacity – to expand it to our customers in data and infrastructure. We want to make the system widely shared, particularly in the high-resolution arena. Two Pléiades Neo 30cm satellites are already in orbit. The next two are ready for their launch planned for Dec 20th. We are also building revisit capability with another small constellation. Four of them will be deployed sometime in early 2024. These small sats will unlock more capabilities – 30 and 50 centimeters of high-resolution image quality. It will allow us to complement our capabilities and offerings in the marketplace. We also intend to further build on the second constellation.
François Lombard (FL): From the service side, all the classical products related to mapping are available in the market. We are also putting the products like Pléiades Neo HD15 for more intensified information and better visual rendering. We are seeing beyond the data and the availability of the images. For us, it’s the start of the journey of getting a lot of imagery products in the market. We are the only company to have radar, optical, and AI capabilities in one place. With our partners, we offer a full spectrum of sensors in an integrated way.
The global space industry could generate $1.1 trillion or more in revenue by 2040. What factors are driving this space economy?
FL: There is a lot of potential in the services. Whether it’s observation services or telecommunications services, there’s a full breadth of how to use the data and the space infrastructure for different means, whether governmental or commercial.
In the downstream, I see more small companies, startups, and even universities, starting to use a combination of data to create the services of tomorrow. I see space being part of a more significant value chain. Companies like Microsoft and Google are using more and more of this data, which shows that we are on an interesting train that could be beyond space.
PP: Personally, I am still doubting this value. We are not yet there, not even in the middle but on the growth path. Even if there are initiatives, they will have to find their marketplace. Deployment of system capabilities will both take time and money. It’s not an easy game.
We have seen a lot of collaboration in the past few years. Instead of competing, companies are collaborating. Are these collaborations going to last, or it’s just another hype? Secondly, the small sats and the startups do they present any competition? The startups seem to bring up new kinds of innovation.
FL: I’ll start with partnerships. That’s been a strong word over the last few years, especially with the market opening to new sensors, investments, and ideas. There comes a situation where you cannot do everything and be good at everything. Now, the reality is that partnerships are always tricky. Until you have found a suitable business model where partners have a good sharing of value, good payback, and everybody has the interest to continue the partnership over time, that’s not easy.
I think there’s a lot of potential in the partnerships related to sensors. For example, some years ago, we invested in HawkEye 360, an RF monitoring company. They are a good team. The idea was to combine their capabilities with optical and SAR imagery.
PP: On the infrastructure side, it’s pretty similar in terms of seeking complementarities where either a company is bringing specific capacity, new performance, or technology, which can happen from the instrument or satellite platform point of view and also on the ground segment. In particular, I’ll mention new technologies like cloud platforms and analytics – complementary capabilities that we don’t have. We try to find a balance and strengthen our portfolio through collaborations and partnerships.
Do you think an aggregator business model will work for the space industry?
FL: Yes, we call it a digital exchange platform. Many companies have tried it recently. We have also invested in a third-party platform, a company called UP42. It is pushing and testing the boundaries of this model. The idea is to give access to the capabilities, data, and analytics. I believe it will work, but let’s face it, it’s early days. It will expand over time, and we need to test and see what’s meaningful, how it works with value creation payback, and so on.
Customer demands are constantly increasing. Can we make data applications ready and accessible to all the needs of the customers?
FL: I will make it simple, either the customer needs quick and fresh access to the data, or sometimes you need to deploy infrastructure for him, connect to his networks, etc., which requires a lot of investment and technology. That’s the classical model. Then, the customers ask for complex products, mapping and processing capabilities, 3D models, etc. The more we move to this part of the market, the more the potential and the diversity of needs increase.
Then there are customized services and value-added services. Here the image is only one piece of the puzzle; you also need the capability to offer an end-to-end service to the client. This is a world that goes in many directions.
We focus on the areas where we are strong and continue to push on this market with our partners. For instance, Preligens, an AI company, monitors hundreds of sites and sends alerts if something is happening, which is worth checking; here, we are customizing a specific service. The question always comes, do you take a partner to take care of that, or do you do it internally? It’s a trade-off we have to make regularly.
Can commercial and free data go hand in hand?
PP: One has to pay for the investments. Satellites, launches, maintenance, operations, imagery – it’s taxpayer money. The investment has to be recovered somewhere in a limited timeframe. The Copernicus climate monitoring data for Europe is an operating model. Each European yearly gives 10 Euros to make it fly for a particular duration. Free data, at least for Airbus, is not our model.
FL: I agree with Philippe. Either it’s the government paying with the tax money, and people are getting it for free, or it’s the private industry, or it’s a mix. But somebody paid, and there’s no free data. Whatever we do, even with the new space approach. You need to launch, maintain in orbit, and process on the ground, which is a significant investment.
What are the new applications of earth observation data?
FL: There’s not one month without a new idea or a new sector trying geospatial data, so I wouldn’t dare to tell you where it’s going. There was an effect of Covid on many industries which were starting to test and push this data. The reality is that some sectors, like civil institutional mapping capacitor, forestry, agriculture, and governmental applications, were pretty mature and stable. In contrast, some areas, such as oil and gas, suffered. Geospatial data is useful primarily as part of a more extensive data set.
The challenge is to find the right speed and customization with other data and services, tap into the right market and scale it up. I think there will be things happening in the insurance and finance sector related to the digital giants. They need geolocation data. I think all that will continue to generate new business models and offerings, but it takes time and sometimes goes up and down.
PP: I think in climate and environment monitoring, there will be additional requirements – to better comply with regulations – to prove that you took action towards sustainability.
With the changing global security scenario and the space race. What kind of future do you see?
FL: There is indeed a stronger trend of space being involved in geopolitical and security topics. It was mentioned in France publicly and through the Ministry of Defense that we need to defend some of the assets.
When you see all the tension in the world and space is really in the middle, it is a very powerful medium for security in gathering and transferring intelligence. I don’t think the space race will stop. I think it will continue to accelerate. Whether it’s the US, big countries in Asia, or the European Union, everybody is investing and preparing for the next steps wherein space has become the center.
PP: I think it’s driving in two directions from the infrastructure side. First, in Europe, we are now conscious of our previous dependency; it’s a wake-up call. We need to be autonomous and rely on the core values that we share as countries. Then, let’s ensure we master what is necessary for a controlled way within a set of like-minded and friendly countries. Second, as François mentioned, when you look at the investment and the drivers, space is still highly driven by defense.
When Elon Musk says he will transport a few guys from New York to Sydney, there may also be transport troops to Afghanistan. Similarly, when talking about launch capabilities or earth observation satellites, it aims to increase our capabilities in defense partially. Space is a dual and strong stream of investment.
Space sustainability is a growing problem in front of us. Your comments?
PP: Space sustainability is on top of our agenda in the production line and on the ground. France is one of the first countries to have a Loi Sur Les opérations spatiales, which takes care of space debris. It is a strong regulation. For example, if we launch from Kourou,- in French Guiana, we must reenter the atmosphere for a particular duration to clean space. We must consider the preservation of batteries, solar rays, electric propulsion, tanking, etc. We are committed to doing it as per the law, meaning that if it’s not, then we can be penalized.
We are one of the few countries to do that, and we would like our fellow countries and the rest of the world to be cleaner and adopt such practices. In my view, there should be some regulation for orbit. Considering Kuiper, Starlink, etc., we don’t know who and how many constellations will be in orbit in the next five years. The key countries have no firm commitment to making space clean and sustainable. At least, we are pushing France and Europe to have regulation and apply it as soon as possible. We are very conscious of tackling this topic.
What are the challenges in front of the European space industry?
FL: I fully recognize the efforts in Europe to work on new programs and generate a budget. I think from the service side of space, where I’m exposed to international competition, we see the US and Asia spending vast amounts of money on infrastructure acquisition and service acquisition.
In Europe, comparatively, there’s less money; we need to be wise if we want to not only survive but grow the business and the capabilities – that’s a challenge. There’s an imbalance; for example, some contracts, especially in the US, are amazingly enormous compared to what we see in Europe.
The second issue is that we are still scattered in Europe. Lots of countries, lots of legal regulations, and lots of national budgets. We have teams everywhere to help us in Europe, more or less, but they follow different regulations. To put that all together to build products and services for the rest of the world, it’s a complex process and environment to work in. The last challenge I would like to point out is fewer private investments in the sector.
PP: Well, there’s a clear vision for the European space sector – next steps and ambitions. But we are lacking speed in terms of execution. For example, our institutions are not ready when we move from an infrastructure approach to a service-level approach.
The fact that the national ambitions have also grown stronger in recent years is eating up part of the common budget that could have been shared for improvement in terms of virtualization and common implementation and having a more robust industrial set up across Europe.
The national programs sometimes have overlaps or divergences, which wastes efficiency. Also, there are so many different institutions at the European Commission – you’ve got ESA, EUSPA, and EUMETSAT; all have a separate contractual framework.
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