The British government is poised to decide on a major contract for the next generation of military satellite communications under the SkyNet 6 programme, with bids from European aerospace firm Airbus and American defence giant Lockheed Martin. The contract, valued at up to £2 billion, aims to provide secure satellite communications capabilities for the UK armed forces into the 2040s. The decision is viewed as a key test of the government’s commitment to maintaining sovereign defence capabilities and supporting domestic industry.
SkyNet, operational since the 1960s, is the UK’s core military satellite communication system. Airbus, which has managed the programme since 1974, supports approximately 2,500 jobs at sites in Stevenage and Portsmouth, along with an extended supply chain employing an estimated 18,000 people. The company has argued that retaining the contract is essential for preserving the UK’s position as a centre for military space technology and safeguarding a strategic industrial base.
Lockheed Martin, meanwhile, has proposed developing a new manufacturing facility in northeast England, promising around 2,000 jobs, over 400 directly linked to the SkyNet programme. The American firm has emphasized its intention to establish the UK as an export hub for future space programmes, identifying around $15 billion in potential export opportunities. Lockheed Martin also maintains that the design authority for the satellites would reside in the UK, though critics have questioned how “sovereign” such an arrangement would be, given the reliance on US intellectual property and technology.
The decision has sparked debate over the broader implications for UK defence industrial sovereignty. Trade unions and several Labour MPs have urged the government to prioritize domestic industrial capability and ensure the contract goes to Airbus to protect jobs and maintain independence in critical military infrastructure. Sharon Graham, general secretary of the Unite union, highlighted the government’s pledge to “buy British” in defence procurement, while MP Kevin Bonavia emphasized the importance of retaining skills and supply chains underpinning a sovereign space capability.
Conversely, some industry experts argue that closer ties with Lockheed Martin could deepen UK access to advanced US space technology and military integration, which could be advantageous amid evolving global security challenges. Observers note that choosing Lockheed might strengthen the UK’s relationship with the US military’s expanding space capabilities, a factor that weighs into the evaluation alongside industrial policy considerations.
The Royal Aeronautical Society, through its head of research Professor Keith Hayward, has cautioned that awarding the contract to a US prime contractor carries risks, particularly given what it describes as a “volatile and inconsistent US administration.” Hayward warned of a “hollowing out” of the UK defence industrial base and described Airbus Skynet 6 as “the better option for maintaining a key element of the nation’s sovereign capability.” He expressed concerns that losing the contract could force Airbus Defence and Space to scale back UK investment, undermining the UK’s standing in the space sector.
The Ministry of Defence has emphasized that both bidders are being rigorously evaluated, with requirements stipulating that satellites be assembled, integrated, and tested in the UK, with the design authority based domestically and critical components sourced from the UK. Final offers, submitted late last year, are set to expire by mid-November, though reports indicate the contract decision has been delayed amid ongoing deliberations.
The outcome of the SkyNet 6 contract will mark one of the first significant defence spending decisions under Defence Secretary Wes Streeting, in a period when the UK has pledged to bolster its military capabilities. The decision comes against the backdrop of heightened emphasis on space-based communications in European security, underscored by the war in Ukraine and increased reliance on satellite intelligence.