Airbus Hires Morgan Stanley To Fastrack Solar Drone Program Spinoff

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Airbus SE EADSF EADSY weighed spinning off its high-altitude drone program Zephyr to accomplish standalone telecom and earth observation business likely to start commercial operations by 2024.
The European aerospace and defense group roped in Morgan Stanley MS to seek external partners to help accelerate the commercialization of the crewless, solar-powered Zephyr aircraft, which operates at the edge of space, Financial Times reports.
Samer Halawi, in charge of the Airbus program, said the Zephyr was "now at a final design stage." The company was "ready to monetize this aircraft" and build a "full business" around it, he added.
Zephyr uses solar panels to fly and recharge its batteries and engineers from the defense group Qinetiq initially designed it.
The Zephyr has a wingspan of 25m but weighs just 75kg.
Zephyr can fly at an altitude of around 70,000 feet at the edge of space in the stratosphere above weather and commercial planes but below conventional satellites.
The business, which will operate under the brand name "Aalto," negotiated with various commercial customers and potential strategic partners.
Airbus aimed to maintain ownership in Aalto, where the Zephyr program resides, but explore external investment to drive the company's objectives.
The high-flying, solar-powered drones beat conventional satellite performance, including lower costs and greater flexibility.
Zephyr plans to set up "Aalto ports" globally at 5 or 6 locations, including in the U.S. and the Middle East.
Zephyr currently has ten aircraft at its site in Farnborough in the U.K.
Popular tech companies aborted their drone projects in 2022 in response to macro headwinds.
Last year companies like Snap Inc SNAP aborted the development of its Pixy flying selfie camera less than four months after launching the product publicly.
In 2022, Meta Platforms, Inc META quietly reabsorbed the resources of its "Connectivity" division.
Price Action: EADSF shares closed at $129.31 on Friday.
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