LONDON - British defence company BAE Systems has high hopes for its space business after acquiring UK-based In-Space Missions on Tuesday, giving it the ability to design, launch and operate complete satellites.

"It (space) will be a big opportunity for us," Chief Executive Charles Woodburn told Reuters on the sidelines of a defence trade show.

BAE already works for space agencies and provides space products, primarily through its U.S.-based business. Adding In-Space gives it new satellite capabilities which it sees as key to defence missions of the future.

Woodburn said In-Space's low earth orbit satellites were new to the group and would in the coming years offer military customers enhanced surveillance.

"The idea of having almost a dedicated space capability that goes with Carrier Strike even 10 years ago you couldn't dream of doing, and now it's a possibility," he said, referring to Britain's aircraft carrier and its accompanying naval escorts and submarine.

He said low earth orbit satellites meant the cost of providing the capability was not prohibitive, and he expected it to become a reality for military customers in the next decade.

Chief Technology Officer Ben Hudson said BAE had further plans to expand its space capabilities after the satellite deal.

"We are working on other things, both internally in the company and also potentially working with our customers," he said.

For military customers, having the supporting infrastructure capability offered by space means connecting up all their operations across air, sea, land and cyber, and is in high demand.

"We see a real pull from the UK Ministry of Defence, and our global customers, in Australia, in the Middle East and in America, for more space-based capabilities," Hudson said.

In-Space is a southern England-based company with about 30 employees. The price of the acquisition was not disclosed but was said to be not material at the group level.

(Reporting by Sarah Young Editing by Paul Sandle and Mark Potter) ((; +44 20 7542 1109; Reuters Messaging: