Italian aerospace company Avio has signed a €40 million ($43 million) contract with the European Space Agency to develop technologies for a reusable upper rocket stage, marking a key step in Europe’s push for sustainable launch systems.
The 24-month deal was inked at the International Astronautical Congress in Sydney. ESA’s Director of Space Transportation, Toni Tolker-Nielsen, and Avio’s Chief Commercial Officer, Marino Fragnito, attended the signing.
The program will define the requirements, system design and technologies for a demonstrator capable of returning safely to Earth and flying again. Work will address both flight and ground segments and conclude with a preliminary integrated design.
ESA’s Long-Term Space Transport Vision
ESA views the project as part of a broader strategy to develop high-frequency launchers, supported by an orbital industrial ecosystem. Officials say this ecosystem could serve as a logistics hub in space, similar to how airports or rail stations operate on Earth.
“The importance of this contract is two-fold,” said Tolker-Nielsen. “It addresses short-term technological criticalities while preparing Europe’s long-term space future.”
He noted that while Europe has demonstrated recovery of launch hardware, a reusable orbital upper stage capable of delivering payloads could be a “game-changer.”
Avio to Leverage Propulsion Expertise
Avio will apply its expertise in liquid propulsion, particularly methane and liquid oxygen systems, as well as the know-how gained from the Space Rider re-entry vehicle. The company aims to design a lightweight, high-performance solution for next-generation rockets.
Chief Executive Giulio Ranzo said Avio is “proud to contribute to the development of a reusable upper stage,” adding that the project will help deliver “higher launch frequency and more competitive costs.”
Coordinated ESA-Industry Effort
ESA and Avio coordinated closely to align the project with national and European investments. Giorgio Tumino, ESA’s Chief Technical Advisor for Space Transportation, said the initiative builds on advances in liquid propulsion, re-entry and reusability.
He added that it complements ongoing efforts to de-risk reusable lower stages, supporting scenarios such as upgrades to the Vega rocket family and the development of new fully reusable launch systems.
Strengthening Europe’s Position
Avio, which employs about 1,500 people across Italy, France, the United States and French Guiana, produces propulsion systems and serves as the launch services provider for the Vega rocket.
With this deal, Avio strengthens its position as a central player in Europe’s space transportation ambitions. The project highlights Europe’s efforts to enhance innovation, sustainability and competitiveness in the global space industry.
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