MURDO MORRISON / PARIS
US strength in world affairs limits European defence manufacturers' opportunities in overseas markets, says Edelstenne
European military aircraft manufacturers will find it nearly impossible to win export customers if the USA continues to exert its dominance in world affairs, says Dassault Aviation chief executive Charles Edelstenne.
Although Dassault's first-half results showed a surge in defence export sales for the French business jet, fighter and unmanned air vehicle manufacturer, Edelstenne says that no matter how strong Dassault's product offering was, the only countries that would buy its latest-generation combat aircraft, Rafale, were those which specifically did not want to "be dependent on the USA".
"Our market is to be the alternative to the US offer," he says. "I cannot argue about the political weight of the USA when it wants to get the market. There are some countries that do not want to buy American. If that was not the position, we would be dead."
In several recent contests, such as that in South Korea, the government has overruled the advice of its military experts and opted for a US aircraft. He says: "We were rated number one, but in the end it became a political issue." Rafale's prospects depend on "the evolution of the political situation around the world", he says. "If the USA becomes even more dominant, we will not sell anywhere. If countries want an independent policy, we will have a market."
For the first six months of 2003, defence represented 61% of Dassault's total revenues, with two-thirds of that from exports, due mainly to deliveries to Greece, India and the United Arab Emirates.
In the same period last year, only 6% of revenues came from overseas sales. At the same time, the faltering business aviation market has seen Dassault's Falcon Jet civil business fall from a 72% to 39% share of total sales. Overall sales for Dassault Aviation grew slightly from €1.47 billion ($1.65 billion) to €1.52 billion. Consolidated net profit fell from €145 million in the first period last year to €141 million.
Dassault has been talking about developing a supersonic business jet (SSBJ) for years - Concorde's demise has given the idea new impetus - and it is in "exploratory, preliminary discussions" with Boeing over a possible project.
It also signed a co-operation accord with Sukhoi earlier this year to look into development of an SSBJ and unmanned air vehicles (Flight International, 1-7 July).
Edelstenne says only one consortium of manufacturers should look seriously at developing an SSBJ: "If there are two companies working in competition, there will be two dead companies, so we should make it together," he adds.
He also says this week's National Business Aviation Association (NBAA) convention in Orlando, Florida, will be the bellwether of sector recovery. "We have seen some encouraging signs in the past two months, with more prospects and the used aircraft market picking up," he says. "We will see at NBAA if this is the beginning of a new cycle."
Source: Flight International
