“We had the impression the crisis was over and the world was back to recovery.” The downturn in markets that as recently as 2014 were darlings of Dassault, and its rivals in large-cabin business jets, surprised the French firm’s boss Éric Trappier, but it illustrates the fragility of a sector that depends on discretionary spending much more than, say, commercial aviation.
Conspicuous displays of wealth have become unfashionable in Brazil and China, where the spotlight is on rooting out corruption. In Russia, the rouble’s decline has pushed top-end imports beyond even some globetrotting billionaires. Just a few dozen decisions to defer or ditch purchases can have a marked effect on the orderbooks of a company like Dassault.
Luckily, another type of upscale purchase is working in Dassault’s favour. A government’s decision to invest in fourth-generation combat aircraft is as much about discretionary spending as pressing security needs. For years it seemed like the Rafale was destined to have just one – domestic – customer. Now, deals with Egypt, Qatar and – the latest – India, have made the fighter a serious player in the export arena.
Dassault’s unusual business model – with the same factories and engineers building two very different types of product for two very different markets – seems to be proving an investor-pleasing counterweight to the industry’s inevitable and often ruinous vicissitudes.