The European Space Agency (ESA) plans to provide a financial incentive to companies awarded Phase 2 contracts under its LEO Cargo Return Services initiative to use European launch services for their demonstration missions.
Initially announced in May 2023, the LEO Cargo Return Service initiative aims to foster the development of a sovereign European space cargo transport service. In May 2024, the agency awarded Phase 1 contracts to The Exploration Company and Thales Alenia Space. This phase is focused on the maturation of the individual proposals and is expected to run until June 2026.
In early January 2026, the agency announced that it had adjusted the previously proposed scope of the initiative’s Phase 2 and renamed it the Autonomous LEO Accelerated Demo Docking to ISS Node (ALADDIN) initiative. The rescoping focused on adjusting the timeline to ensure that a demonstration mission is executed in the second quarter of 2029, which would be the last possible opportunity to dock with the International Space Station (ISS) before it is decommissioned, and to provide the option for a demonstration mission to future commercial LEO destinations.
On 10 March 2026, ESA held a briefing with industry representatives interested in submitting proposals for the ALADDIN initiative. During the briefing, the agency revealed that it encourages proposals to utilise Ariane 6 or another European launch vehicle for demonstration missions and would offer an incentive of up to €50 million to encourage their use.
This incentive would be in addition to up to €420 million awarded per contract, with ESA planning to award two contracts. The funding will be split into two tranches. Companies will initially receive €200 million, with the remaining €220 million to be allocated only after additional funding is secured during the ESA Ministerial Council meeting in late 2028.
The funding awarded under the two contracts is, however, not intended to cover the entire cost of development, with the agency describing it as co-funding. Companies will be required to privately source a minimum of 40% of the total cost.
ESA intends to sign contracts for the winning bids for demonstration flights to the ISS by August 2026. Contracts for demonstration missions to future commercial LEO destinations are less urgent and, as a result, will only be signed in November 2026.
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