"The ULA Vulcan program has performed unsatisfactorily this past year." That was the headline from a House Armed Services Committee Subcommittee on Strategic Forces hearing on United Launch Alliance's (ULA) performance in space launch last week.
As Ars Technica reports, Major General Stephen G. Purdy, acting assistant secretary of the Air Force for Space Acquisition and Integration, took ULA, a joint venture between Boeing (BA 0.38%) and Lockheed Martin (LMT 0.36%), to task for causing "delays to the launch of four national security missions." The space company has launched its new Vulcan rocket twice and finally won certification to fly national security missions in March after the Space Force generously overlooked the fact that, during the rocket's October 2024 certification flight, one of its engine nozzles fell off.
Image source: United Launch Alliance.
Yet despite Space Force doing this favor, ULA has failed to get Vulcan ready to launch even once since receiving certification two months ago. Granted, I personally expect ULA to get its problems fixed and resume Vulcan flights shortly. (With Atlas V due for imminent retirement, it kind of has to!) But ULA had better get a move on.
Because over on the other side of the ocean, one of ULA's biggest competitors, aerospace and space giant Airbus (EADSY 3.08%), is already starting to up its game in space.
Airbus' space business is flying high
Airbus' struggles in space are well-known. The company's new Ariane 6 rocket took nearly a decade to develop. By the time it was ready for flight, it ended up costing far more than planned for each launch. Growing pains are far from unknown in the space business, however, and it looks like the European aerospace company is finally finding its footing in space.
Revenue at the company's space division, part of Airbus Defense and Space (ADS), fell 18% from 2021 to 2023 before bouncing back 10% in 2024. As 2025 gets underway, it seems to be gaining momentum. According to a new report from Payload Space, space revenue at ADS grew 28% in the first quarter of 2025. Assuming this is correct, it would mean Airbus' space business is growing more than twice as fast as ADS generally, where revenue grew only 11% in Q1. Profitability is likely to improve as well after the company took $2 billion in charges over the past two years and laid off 2,500 workers to reduce its operating costs.
Contract wins are rolling in: $157 million to build two synthetic aperture radar defense satellites for Britain; $2.5 billion more to build a pair of large communications satellites for the German military; and a big contract with Eutelsat to build 100 satellites for that company's OneWeb broadband internet satellite constellation.
On top of all this, Airbus CEO Guillaume M.J.D Faury made a cryptic comment in the company's post-earnings conference call last month: "We continue ... looking at different scenarios to create scale in the European space business." Payload and others believe this could be a reference to an Airbus plan to merge its satellite business with those of fellow European defense companies Thales and Leonardo to create a European "champion" that could compete with SpaceX and Starlink.
What all this means for Boeing and Lockheed Martin
Just because Airbus is gunning primarily for SpaceX, though, doesn't mean ULA should feel safe. In rockets, Airbus CEO Faury said it's his "priority" now to "ramp up" Ariane 6 launches at the same time as ULA's own Vulcan rocket program seems stalled.
In at least one regard, this would appear to put Airbus in a head-to-head competition with ULA. Amazon (AMZN -1.38%), after all, has awarded contracts to both companies to assist it in launching its Project Kuiper internet satellites into orbit. Time is of the essence in that effort, with a July 30, 2026, Federal Communications Commission (FCC) deadline looming. Whichever space company ramps its rocket launch cadence first may capture a larger share of the Amazon work.
Even bigger picture, ULA CEO Tory Bruno has made it a primary objective to diversify ULA's revenue base by having Vulcan split its launches roughly 50-50 between U.S. government and commercial missions. Historically, ULA has been almost exclusively a U.S. government launcher, but this diversification initiative puts ULA in direct competition with Airbus -- at the same time as ULA is already competing with SpaceX, the 800-lb. gorilla in commercial space launches.
All things considered, it's a bad time for ULA to be making its current biggest customer, Space Force, mad at it. Investors looking to avoid further Boeing drama might want to take a look at Airbus stock instead.
At 29 times trailing earnings, I won't argue Airbus stock is "cheap," necessarily. But with analysts forecasting 24% long-term annual earnings growth and space revenues already growing faster than that, Airbus stock just might be cheap enough to buy as an alternative to Boeing stock.
