PM reviews £2.4bn Skynet satellite contract as Airbus and Lockheed make competing jobs pledges

Prime Minister Andy Burnham is reportedly reviewing the Ministry of Defence‘s proposed selection of a contractor for the £2.4 billion Skynet military satellite programme as Airbus and Lockheed Martin compete to deliver the UK’s next generation of military communications satellites.

Sky News reported on 5 November, citing four defence industry sources, that the MoD had provisionally favoured Lockheed Martin over Airbus for the Skynet 6 Wideband Satellite System (WSS) contract. The contract covers two new military communications satellites.

However the MoD has emphasised that the competition remains open and no final decision has been made.

“This is an ongoing procurement process, and no final decisions have been made,” a ministry spokesperson told Sky News.

The reported review follows concerns about the potential impact on established UK satellite manufacturing operations, alongside competing proposals for investment, employment and technological development.

Airbus warns of impact on UK jobs

Airbus and its predecessor companies have been involved in the UK’s military satellite communications programmes for decades. The company’s UK operations have developed and manufactured successive generations of Skynet satellites.

The company has warned that up to 3,000 highly skilled UK jobs could be at risk if it does not secure the latest Skynet contract, according to Sky News.

On 6 November, trade union Unite called on the government to award the contract to Airbus, highlighting the company’s established manufacturing facilities and technical expertise.

Unite said the programme supports approximately 3,000 skilled jobs in Stevenage and Portsmouth, alongside a further 18,000 jobs across the wider UK supply chain.

Unite general secretary Sharon Graham said: “Ministers keep say buying British will be the default. Skynet 6 is the first real chance this government has to prove it. Now it needs to get on with it.

“Our members at Airbus and its supply chain have built the MoD’s military satellites for over 20 years. You cannot justify throwing away all those good highly skilled jobs on the back of a promise which may never even materialise to deliver fewer jobs at some point in the future.”

Airbus declined to comment when approached by Sky News.

Lockheed Martin proposes new UK satellite manufacturing facilities

Lockheed Martin has proposed establishing satellite manufacturing facilities in the North East of England if its bid is successful.

According to Sky News, the company’s proposal includes a new factory on Tyneside, with an estimated 500 direct jobs and 2,000 indirect jobs.

A Lockheed Martin spokesperson told the broadcaster that the company could not comment on the ongoing procurement but outlined its proposed UK manufacturing arrangements.

“Lockheed Martin UK, a British company, will establish facilities to develop an ecosystem alongside our regional partners in the North East of England to provide the UK with a sovereign space capability,” the spokesperson said.

The company said its plans would create employment and supply chain opportunities, alongside potential exports, and include a UK Design Authority and UK Chief Engineer.

MoD confirms UK manufacturing requirements for Skynet 6

The competition has also prompted discussion about the UK’s ability to maintain sovereign control over its military satellite communications.

The MoD has confirmed that specific manufacturing and technical activities must remain in Britain regardless of which company wins.

In a Parliamentary written answer on 3 November, Defence Minister Luke Pollard outlined three requirements for the successful bidder.

These include maintaining a UK-based system design authority, undertaking satellite assembly, integration and testing in secure UK facilities, and sourcing a specified minimum number of key subsystems from UK suppliers.

The requirements are intended to protect critical technical expertise and maintain domestic industrial capabilities.

Skynet decision has implications for UK defence supply chains

The competition comes as the government seeks to strengthen domestic defence manufacturing, develop specialist skills and expand opportunities for British suppliers.

For the UK space industry, the contract represents a significant opportunity to support advanced satellite engineering, manufacturing and associated supply chains.

An Airbus award would continue the company’s established role in delivering British military communications satellites and support its existing industrial operations.

A Lockheed Martin award would introduce a new prime contractor to this element of the programme, alongside proposed investment in satellite manufacturing facilities in North East England.

The outcome will determine how future industrial activity is distributed across the UK’s space sector, although the precise economic and employment effects of either proposal have not been publicly established.

What is the Skynet 6 programme?

The Skynet programme provides secure satellite communications for the UK Armed Forces and allied military operations.

The system supports communications between military headquarters, ships, aircraft and deployed personnel, including operations beyond the reach of conventional terrestrial networks.

The Skynet 6 programme is intended to replace and enhance existing military satellite communications capabilities, providing services into the 2040s.

Airbus was awarded a contract worth more than £500 million in July 2020 to develop and manufacture the Skynet 6A satellite. That contract also covers associated ground systems and technology development.

Skynet 6A is separate from the WSS procurement currently under consideration.

The MoD launched the WSS procurement process in May 2023. Airbus Defence and Space UK and Lockheed Martin UK subsequently submitted bids.

Following two rounds of engagement with the companies, the MoD issued its second and final invitation to negotiate on 8 August 2025.

The procurement covers geostationary military communications satellites equipped with X-band and military Ka-band payloads, together with associated ground infrastructure and launch operations.

Sky News reported that a decision on the WSS contract could be made within two weeks of its 5 November report.