Dassault has slashed its delivery forecast for its Falcon business jet line in 2016 by almost 17%, blaming a weak market and price cutting by competitors for underwhelming sales.
It also recorded 11 cancellations of its in-development 5X large-cabin, long-range jet in the first six months of the year on the back of programme delays caused by Safran’s late-running Silvercrest engine.
In January, the French airframer confirmed a two-year delay to the programme, with first flight now scheduled for 2017 and customer deliveries pushed back to 2020.
Its half-year results for the six months ended 30 June show “disappointing” sales, taking in just 22 orders for the Falcon family, while recording 11 cancellations on the 5X.
That is at least an improvement on the same period last year where net orders totalled just five aircraft on the back of a 20-unit cancellation from NetJets.
But “an unstable geopolitical and economic environment” is causing the market to soften, Dassault says.
“Against this background, business aviation is facing weak demand and the second-hand market remains challenging,” it adds.
In addition the airframer sees “intense competition” from its rivals “as they continue to put pressure on prices”.
As a result, it has cut planned deliveries for the full year by 10 aircraft to 50 units. Handovers in the first six months of 2016 totalled 15 Falcons – worth €853 million ($940 million) – down from 18 in the same period in 2015.
Better news comes on the ultra-long-range Falcon 8X, however: having secured European and US certification earlier this year, Dassault says it is on schedule to deliver the aircraft in the fourth quarter.
Despite what it describes as a “competitiveness” issue – which it has partly addressed through moving all its completions work to Little Rock in Arkansas – the manufacturer says it remains committed to business aviation.
Its future strategy hinges on the continued development of the 5X “and, despite the challenging environment, preparing the launch of a new Falcon programme”.
The current Falcon backlog is 87 aircraft, down from 91 at the end of 2015.
Source: FlightGlobal.com
