Italy is the European Union's third largest space nation, and a founder member of the European Space Agency (ESA) with a budget last year of around €800 million ($992 million) drawn from transport and defence accounts as well as Italian space agency ASI.

Industry, however, must live with the reality of a depressed satellite market, and Finmeccanica signed a memorandum of understanding in June to merge its space activities with those of French telecommunications giant Alcatel. Italian manufacturer Alenia Spazio and operator Telespazio will be combined with Alcatel Space in an overdue consolidation of the European satellite sector.

 Plans call for the French company to hold about 67% of a joint manufacturing operation, Alcatel Alenia Space, and Finmeccanica to hold roughly 67% of a combined satellite operations company, Alcatel Telespazio Services. The space alliance will be overseen by a steering committee chaired by the chief executives of Alcatel and Finmeccanica.

Telespazio has a turnover of around €320 million, compared with around €80 million for Alcatel, but access to the French market, Europe's largest, is notoriously difficult for non-French companies. "We would like to increase our business in France and all over Europe," says Telespazio's chief executive Bruno Saggase. Alenia Spazio may be less happy to be a junior partner in its joint venture, being more evenly matched with Alcatel in terms of sales.

Recently reorganised by Finmeccanica, Alenia Spazio and Telespazio are now in the same division for the first time, creating a clearer separation of roles. There has also been a renewed focus on efficiency. Telespazio is close to completing a reduction in workforce from 1,300 to 1,150, while taking on new projects such as the Cosmo-SkyMed Earth observation constellation and European Union-led Galileo navigation system. Alenia Spazio is boosting efficiency by around 20%.

Finmeccanica has not stopped its march towards consolidation, which may be welcome news to Italy's dwindling band of non-aligned space companies. The largest independent is Tecnospazio, while at the other end of the spectrum is Pisa-based space propulsion company Alta Space. Alta's turnover this year will be just €4 million, but that is a doubling of its 2003 revenue. ESA provides 50% of Alta's revenues.

ASI's president Sergio Vetrella says 53-54% of Italy's space budget goes to ESA, with the remainder spent on Italy's national programme. But many ESA programmes include Italian industry and "in total...about 93% of our budget finds its way back to Italian companies", he says.



Source: Flight International