JUSTIN WASTNAGE / GENEVA
Rather than trying to be all things to all business aircraft, Dassault is aiming for the top of the market
Given the breadth of the business-aircraft market, it is understandable that many manufacturers have built ranges to cover every niche. This has seen some impressive results, notably from Canadian manufacturer Bombardier, which has developed or acquired aircraft of virtually every size. French company Dassault is taking another approach. It focuses on the top end of the market, from super mid-size upwards.
According to figures supplied to the US General Aviation Manufacturers Association (GAMA), Dassault delivered 75 business jets worth almost $2 billion last year. This compares with 182 aircraft worth almost $3.3 billion for Bombardier and 101 aircraft worth almost $3.2 billion for Gulfstream. But the French company's share of the upper end of the market was greater and is growing. According to GAMA, Dassault delivered 62 Falcon 2000s and Falcon 900s last year, while Bombardier shipped 71 Challenger 604s and Global Expresses and Gulfstream 71 GIVs and GVs.
Despite the competition, Dassault is confident it can reach more than a 50% market share by the end of the decade, both on the strength of new products and from existing owners "upgrading to the best". Jean Rosanvallon, president of the Dassault Falcon Jet subsidiary responsible for marketing in the Americas and East Asia, points to 10-year forecasts from analysts Aviation Research Group/US showing the $20-40 million price bracket growing to account for 60% of all business aircraft sales, up from half today.
But why not chase the lower end too? The reason is simple, says Dassault president Charles Edelstenne: profitability. This was not always the case. In the early days of business jets, following the success of its Falcon 20, the company launched a shrink version, the Falcon 10. While features taken from Dassault's fighter programmes, such as servo controls, were loved by business-jet pilots, they were cost-prohibitive at the lower end of the market, says Rosanvallon. But the Falcon 10 was launched in a less price-aware era, when the wealthy who bought private jets could indulge their pilots. By the late 1990s, Dassault needed a market analysis to support management's gut feeling: that the kind of engineering that goes into a Falcon simply cannot be cost-effective on smaller jets. This is especially true in a marketplace that is becoming "increasingly crowded", says Rosanvallon.
Before corporate jets earned their status as efficiency tools, Dassault business jets were successful only because they borrowed military technology, argues one industry insider. For example, the wing of the original Mystère XX, which later became the Falcon 20, was derived from that of Dassault's Mystère IV fighter. Based on its experience with the Mirage 2000 and Rafale fighters, the company has been at the forefront of the introduction to business aviation of composite structures, integrated cockpits and fly-by-wire controls.
Safety margin
Dassault plays down its reliance on military programmes. The company argues it has always applied the latest technology available to civil projects. As an example it cites the use of a third engine on many Falcon variants, the company believing its "type of customer" would rather pay the extra cost for the higher safety margin, the convenience of wider airfield access and the freedom to fly without extended-range twin-engine operations restrictions. Furthermore, the company is no longer dominated by its military business. In the past 15 years, Dassault has undergone a complete reversal, with civil projects accounting for 76% of the company's €3.74 billion ($3.53 billion) sales last year.
Falcons are now the most important component of the group, but there is little doubt the bottom line benefited from technology transfer in the 1970s and 1980s, when military sales outnumbered civil sales by four to one. All aircraft, for example, are based on a supercritical wing developed for the Falcon 50 using technology from the Mirage family. In 1979, the Falcon 50, with its carbonfibre ailerons, became the first civil aircraft with composite components to be certificated by the US Federal Aviation Administration. The latest 50EX variant features a new composite horizontal stabiliser, which is 14kg (30lb) lighter than the previous all-metal tail-plane thanks to resin transfer moulding developed for Rafale wing production.
There is more to the Falcons' appeal than fighter-influenced aerodynamics, the company insists. Founder Marcel Dassault took a keen personal interest in development of the Falcon family and recognised early on that a cramped cabin was a major limitation. By the time Lockheed flew the world's first purpose-designed business jet, the JetStar, in 1957, Dassault had rejected its own first business jet design, the Méditerranée, for reasons including cabin size, the company says. The Falcon 20, launched in 1963, had a cabin 20% larger than that of its nearest rival at the time of its debut, the de Havilland 125.
Design detail has been key to the Falcon's US success, where European products tend to cost more than their domestic rivals but rely on better engineering to sustain sales, Rosanvallon says. It appears to have worked - the majority of Dassault's sales are in the USA.
US heritage
The company also plays up its US heritage. Charles Lindbergh, who met Marcel Dassault after his first transatlantic flight in 1927, became the first Dassault distributor in the USA and persuaded Pan American World Airways' then-president Juan Trippe to take a dozen Falcon 20s for its US fleet. Although Dassault bought back Pan Am's 50% stake in the joint distribution venture and made Falcon Jet a wholly owned subsidiary in 1980, the company still has three facilities in the USA - its headquarters at Teterboro, New Jersey; a completion centre in Little Rock, Arkansas; and a maintenance operation at Wilmington, Delaware.
Falcons are built in Mérignac, near Bordeaux in south-western France. Design work takes place in the Paris suburb of Saint-Cloud, where Dassault is designing its new aircraft, the Falcon 7X, formerly the FNX. The long-range, high-speed aircraft will be the first Dassault business jet with all risk-sharing partners working together in the design phase. Eighteen companies have engineers in Saint-Cloud, where three-dimensional computer models and shared real-time plans mean that information transfer delays are avoided.
The new aircraft's "high-transonic" wing is thought to account for over half the project's €265 million development costs, not including costs borne by engine supplier Pratt & Whitney Canada.
With Dassault also responsible for a quarter of the non-recurring costs for developing the export version of the Rafale, in a consortium with Thales and Snecma, the company clearly benefits from finding civilian applications to make its military investments more cost-effective, especially now the French government, having sold its 45.87% stake in the company to Aerospatiale (now EADS), can no longer provide funding support.
Dassault may have used military-technology transfer to make the Falcon the most profitable aircraft family in production, but with rivals firmly entrenched in its traditional market sector, the French manufacturer may not have such an easy ride in the future. To reach its aim of half the $20 million market, the French manufacturer must woo the world's most discerning travellers.
Source: Flight International
