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Avio Navigates Lull in Launches by Leveraging Defense Business

Avio, the renowned aerospace manufacturer, has unveiled its strategic shift towards defense propulsion projects to counterbalance the stagnant pace of its space launch operations. The company’s recent financial report for the first quarter of 2024 showcases a notable surge in net revenues, reaching 78.8 million euros ($85 million), compared to 59.8 million euros in the same period last year. This growth is attributed primarily to the expansion of its defense propulsion business.

Boosted by Defense Contracts

Avio’s endeavors in defense propulsion have yielded significant returns, with revenues from defense projects soaring from 7 million euros in Q1 2023 to an impressive 15 million euros in Q1 2024. Furthermore, other technology development projects have also witnessed a substantial revenue spike, increasing from 3 million to 14 million euros during the same timeframe.

Shifting Priorities

Giulio Ranzo, CEO of Avio, emphasized the evolving significance of defense propulsion within the company’s portfolio. The surge in defense orders, totaling 80 million euros in the first quarter alone, underscores the pivotal role this sector plays in Avio’s revenue stream. Ranzo highlighted the shift in focus as a response to the current lull in space propulsion projects, particularly attributed to delays in the Ariane 6 program.

Addressing Production Challenges

Avio faces production challenges, notably with the P120 solid motor utilized in the first stage of the Vega C and Ariane 6 rockets. Delays in the Ariane 6 program have led to inventory constraints, hindering P120 motor production. However, with the imminent commencement of Ariane 6 launches, production is projected to increase steadily, reaching 15 motors annually by 2025 and escalating further thereafter.

Forward Momentum and Challenges

While Avio anticipates the first Ariane 6 launch window in mid-June to late July, uncertainties loom regarding potential last-minute issues inherent in launching a new system. Moreover, the company is gearing up for a crucial test of the redesigned Zefiro-40 motor, a key component in the Vega C’s second stage, to rectify previous launch setbacks.

Transition in Launch Services

Amidst these developments, Avio is poised to assume the role of Vega C launch service provider, transitioning from Arianespace. Negotiations are underway with ESA and Arianespace to ensure a seamless handover, with Avio establishing a dedicated organization to manage launch services. This transition is anticipated to bolster Avio’s revenue streams in the medium term.

Avio’s strategic maneuvering underscores its resilience in navigating the dynamics of the aerospace industry, leveraging defense contracts to mitigate challenges and chart a path toward sustained growth and innovation.


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