MADRID Spanish startup PLD Space has signed an agreement with France's Arianespace to develop joint services to launch small satellites into orbit, the Spanish company said on Tuesday.

The agreement will allow PLD Space, which aims to launch micro-satellites and take a slice of a potential $1 trillion business, to offer its customisable service - which is currently under development - to Arianespace customers, it said.

PLD Space, which hopes to start commercial activity in 2025, plans to make a first suborbital test in the next days or weeks in southern Spain, after having called off a launch at the end of May due to high altitude winds.

The Spanish company plans to gradually increase its capacity to 10 to 12 launches per year by the end of this decade.

Europe's efforts to develop capabilities to send small satellites into space are in focus after a failed orbital rocket launch by Virgin Orbit from Britain in January.

Arianespace, which launches satellites from French Guiana, is majority owned by ArianeGroup, a joint venture between Airbus and Safran.

(Reporting by Emma Pinedo; Editing by Inti Landauro and Mark Potter)