Dassault’s 2016 is perfectly summed up by its chief executive Éric Trappier: “I would prefer that besides the Rafale’s success that we also had more Falcon orders.”
But the French airframer, it seems, cannot have both: either the Rafale multirole fighter is struggling and its Falcon business jets are soaring, so to speak, or the opposite is true.
Last year fell into the latter category: the Rafale continued its recent run of export sales success, netting a 36-unit order from India to add to previous commitments from Egypt and Qatar, while Falcon orders and deliveries continued to struggle.
In fact, Dassault handed over 11 fewer business aircraft than the 60 it forecast at the beginning of 2016, a figure that was revised down to 50 at the half-year point. It took in 21 net orders, which included 12 cancellations for its over-running Falcon 5X programme.
The delay to the 5X, driven entirely by problems with its Safran Silvercrest engines, is concerning in its own right, but more worrying is the continued weakness in the business jet market, particularly at the top end where Dassault’s range sits.
That can be seen in its forecast for 2017: it expects to deliver 45 Falcons, down on both 2016’s total of 49 and the 55 handed over in 2015.
In addition, over the past two years its business jet backlog has shrunk from 91 at the end of 2015 to 63 as of 31 December 2016.
Turnover and net profit have followed this downward trend too: falling to €3.58 billion ($3.81 billion) and €384 million, respectively, from figures of €4.17 billion and €482 million a year earlier.
Trappier predicts an upturn in the business jet market at some point – although he thinks it will not “recover very fast in 2017”. Any improvement will come “little by little”, he says, with the sector beginning to turn “by 2018”.
In the interim, the softer market is causing all its participants to cut prices to win orders. Trappier points out that as its two biggest rivals – Bombardier and Gulfstream – are based in North America, the lower employment and social costs in those countries offer greater flexibility to trim prices for new jets; “aggressive competition”, he calls it.
“It is more difficult to manufacture aircraft in France at a certain price than it is in the United States,” he says.
To address that cost discrepancy – both in the short and long term – Dassault is streamlining its manufacturing operation.
That does not mean, insists Trappier, that it is closing sub-assembly factories or dramatically reducing headcount, simply that “we wish to specialise our plants, to dedicate them to [specific] purposes”.
“They are historically important sites, but we want to specialise them,” he says.
For example, its facility in Seclin, near Lille in the northeast of France, will now focus on making machined metal parts for both civil and military jets, while its factory in the northern Paris suburb of Argenteuil will build front fuselage sections and integrate Rafale fuselages, among other roles.
Design and engineering functions will remain at its St Cloud headquarters to the west of Paris, but Trappier wants its engineers to spend more time at its Bordeaux-Mérignac final assembly line or Istres flight-test facility.
“Culturally I want to see our teams coming closer to the airplanes,” he says. “I want to have people working together with more co-operation in the places where the planes come from.”
In addition, Trappier is hopeful that he can convince military customers of the folly, in his view, of joining the clamour for the Lockheed Martin F-35. He points out that the development costs for the Joint Strike Fighter are somewhere in excess of $80 billion, whereas in comparison the Rafale cost just $9.5 billion.
It is particularly “scandalous”, he says, that in Europe “the preference is American” when nations come to acquire new fighters. Countries make these decisions despite the additional expense and without considering the economic and industrial benefits of buying European-built aircraft, he says.
“[They] should buy a European aircraft because it’s good for Europe. It is not just about operational capabilities but jobs and technologies and many things besides,” he says. “I am not convinced that when a European country buys a US aircraft it is the right thing.”
Frequently, he feels, US-made types are selected simply because of political links within the NATO bloc.
“I would like politics to help European manufacturers but that’s not the case. If I want to win I have to demonstrate that my aircraft is the best aircraft at the best price.”
Nonetheless, Trappier is bullish on the possibility of further increasing the Rafale’s 110-strong backlog. France alone needs at least 45 additional fighters – talks are already under way covering this tranche five acquisition – but may eventually require more like 100.
If export campaigns also come off, then the programme could be looking at hundreds of additional orders, although he cautions it “may be zero or 400”.
“For me it is not a problem. My concern is to have the right production line adaptability to deliver when the order comes.”
Production is forecast to continue until 2025 with the current workload, and Trappier expects the Rafale to continue in operation for at least 35-45 years after that.
Or, as the 57-year-old chief executive puts it: “I cannot see the end of Rafale service in my horizon.”