Any chief executive has to take the rough with the smooth, and for Dassault Aviation’s Éric Trappier, the past 12 months have provided plenty of both. The company has seen its once-turbocharged Falcon business clock up its lowest deliveries in a decade on the back of slumps in markets such as Brazil, China and Russia, that had been driving demand for its top-end corporate jets.
In another blow, the airframer a few days ago confirmed a two-year delay to its all-new 5X programme, with the wide-fuselage twinjet now not due to enter service until 2020. The hiatus – uncomfortable for a company that prides itself on sticking to schedules – is a result of technical hitches with the development of the Snecma Silvercrest engine for which the 5X is launch platform.
Defence has been a happier story. The French company’s military unit – languishing since the spending boom of the mid-2000s – secured its first export deals for the Rafale fighter, with a trio of agreements with Egypt, Qatar and now, after years of deliberations, India. They have given a boost to a product line perilously dependent on a single domestic customer.
For Trappier, the switches in fortune are part of the ups and downs of running a company with a foot in the civil and military camps. “We have synergies between the two sides of the business, so we are calm if one is going slow,” he explained in a recent interview with Flight International in Paris. “It is bad when both are going badly, but that is not the case today.”
The downturn in business jet sales came as a shock to Trappier who replaced the retiring Charles Edelstenne in 2013, after almost 30 years with Dassault in a variety of roles. Falcon had been on an upward trajectory since an orderbook slump after the 2008 crisis, with the world’s new super-rich acquiring a taste for the brands offered by the French manufacturer and big-jet rivals Bombardier and Gulfstream.
“We had a very good year in 2014, with 90 orders. We had the impression that the crisis was over and the world was back to recovery,” says Trappier. However, last year saw orders dip and Dassault cut production to 55 aircraft – it had been ramped up to 66 units in 2014. “Maybe we were a bit too optimistic. There are still parts of the world that face some sort of a crisis,” he concedes.
A series of events – from sanctions against Russia to the slowing of the Chinese economy, to a corruption clampdown in Brazil – put a brake on growth in “countries where we had big hopes to boost ourselves”. They have, says Trappier, offset a modest recovery in the mature markets of Europe and North America, where firms are beginning to invest again in private executive transport.
Dassault – with final assembly facilities in Bordeaux and its headquarters and design centre in the smart Paris suburb of Saint-Cloud – will confirm Falcon production plans for 2016 when it announces its annual results in March. The target figure is believed to be around 60 aircraft. “We increased our output in 2014 and now we are stabilising,” says Trappier.
He describes the 5X delay as “the bad news of 2015 for us” and a bigger headache than the fall in business jet orders, because of the anticipation around the new type. The 5X, unveiled in 2013 and which had been expected to fly last year, will now not take to the air until 2017, before a two-year flight test programme to certification. Production, meanwhile, has been frozen.
It was the first time Dassault had selected its fellow French company Snecma to power a Falcon, and Trappier admits helping to launch a new engine programme carried risks. Problems with the powerplant began to emerge early last year but it has only been in the last few weeks that the full scale of the work Snecma must do has become evident.
However, despite expecting some “order erosion” as customers who need an aircraft in 2018 or 2019 look elsewhere, he remains sanguine and believes Snecma will eventually produce a high-performance and reliable product. “I am not a happy man, but the 5X remains a fantastic aircraft. In the end, if we have the right aircraft and the right engine, it is only two years,” he says.
As for the rest of the business jet portfolio, the outlook is better. The 6,450nm-range 8X – a stretch and longer-range development of the decade-old 7X, which it may replace – flew in 2015 and Dassault anticipates starting deliveries later this year. The company’s mid-range workhorses – the 900LX trijet and 2000LXS and 2000S twinjets – continue to sell well, particularly in the USA.
The latest Rafale deal for 36 French-built aircraft – confirmed during a state visit to India by French president Francois Hollande on 25 January, although a price has still to be settled – is the culmination of a long-running negotiation that four years ago saw New Delhi choose the fighter for a 126-aircraft requirement to replace the Mikoyan MiG-21.
Although it seems unlikely India will order further Rafales without an agreement in place to involve domestic manufacturers, Trappier says Dassault will engage with the French government to secure an industrial deal. “We worked to get [the order for] 126, but it took time as we had to license HAL [Hindustan Aeronautics],” says Trappier, who adds Dassault will “go step to step to a licence”.
Trappier has spent most of his career with the airframer on the military side, serving as executive vice president for foreign combat sales throughout the 2000s. He was instrumental in selling Mirage 2000-9 fighters to the United Arab Emirates in 2008 and, with the latest Rafale export deals, is seeing the fruits of much of his labours over the years, including securing the initial Indian selection in 2012.
Dassault delivered the first three of 24 Rafales to Egypt last year and three more will follow in the coming days. Qatar will receive the first of its 24 fighters in 2018. Trappier now has high hopes of a deal with Canada – Ottawa is on the lookout for a new fighter after its newly-elected Liberal party indicated in the election campaign it was no longer committed to the Lockheed Martin F-35.
“The feeling [in Canada] is that the F-35 is expensive and the country does not need it. We are waiting for them to launch a competition and, when they do, we will be a solid candidate,” he says. “No other aircraft offers what the Rafale can. It is combat proven and can protect the country, but also operate around the world, either in coalition or on its own. That flexibility has been proven.”
Although the Rafale lost out to the Saab Gripen in Brazil, there are plenty of other potential customers, says Trappier. “Like all countries operating the Mirage 2000, the UAE is a candidate,” he says. Likewise Belgium – one of the few Lockheed Martin F-16 customers not to opt for the F-35 – which is a possibility, with Dassault’s 53% stake in local aerostructures firm Sabca an added advantage.
On the military side, Dassault has been looking beyond the Rafale with a number of unmanned studies. The longest running has been the pan-European, but Dassault-led, stealthy Neuron unmanned combat air vehicle [UCAV] project, where a demonstrator has now made more than 100 flights and fired a weapon in a range in Sweden.
Under the 2010 Lancaster House bilateral co-operation treaty between the UK and France, Dassault and BAE Systems will take forward lessons from Neuron and the latter’s Taranis study under the Future Combat Air System programme. Trappier sees a UCAV potentially operating alongside the Rafale from the 2030s. “It will be useful for air forces to have a mix,” he maintains.
A separate declaration of intent last year between France, Germany and Italy will see Dassault work with Finmeccanica and Airbus Defence & Space on a medium-altitude, long-endurance unmanned air vehicle in a bid to give these European countries their own home-grown alternative to the General Atomics Aeronautical Systems MQ-9 Reaper. However, contracts have yet to be issued.
Dassault has also been laying the foundations for a future range of Falcons, likely to be based on the 1.98-high and 2.58m-wide cabin of the 5X, the broadest on the market and the company’s first all-new aircraft since the 7X a decade earlier. “As far as the width of the fuselage is concerned, we feel this will be the size of our new-generation aircraft,” says Trappier.
Dassault, which celebrates its centenary this year, remains very much a family enterprise. Its founder Marcel Bloch – he changed his name after the Second World War – led the company until passing the reins to his son Serge during the 1980s. Trappier is only the second non-family member to lead Dassault Aviation since Serge Dassault handed over to Edelstenne in 2000.
The recent reduction in Airbus Group’s share in the company – its original 46% stake was a legacy of a French government part-nationalisation in the early 1980s – has meant around 16% of shares in Dassault Aviation are now floated, with the Dassault family retaining around 56%. Trappier says new investors in financial centres including London and New York are fully behind the company’s strategy.
“They like us because we are high-tech and also because we are 50/50 defence and civil – exactly the same as Thales [the French avionics group in which Dassault has a 25% shareholding],” he says. “This is a big advantage to have. Investors know it will be at least stable and, beyond that, they have the possibility of making a lot of money. Our profitability in the long term has been good.”
Despite pressures on business aviation, Trappier says Dassault has no plans to move production from France. Although Falcon completions are carried out in Little Rock, Arkansas, military and business jet production takes place at shared, specialised plants in France. The requirement to retain military production in France creates synergies and economies of scale for the Falcon business, he says.
Managing two disparate businesses – with their own cycles – cannot be easy, but Trappier says Dassault is “proud of being flexible” with the ability to move engineering and production resources between the two parts of the company. “Our aim is always to be flexible and adapt production to keep prices steady,” he says. “Discounting is always bad for the market.”
Source: Flight International
