By Pierre Tran
Paris – Dassault Aviation hopes Airbus will agree to a clear program leadership in building a next generation fighter, perhaps with a deal formally approved by the end of the year, executive chairman Eric Trappier said July 20.
There was hope for a “decision in the (coming) weeks or in one or two months’ time,” he said, with entry into effect “by the end of the year.”
That was not an ultimatum, said Trappier, speaking at a press conference on Dassault’s first half financial results.
Dassault was actively working on plan B for the new fighter jet, he said, and the priority was to inform the defense ministry before any public disclosure of the fall back option.
Trappier was referring to the reluctance of Airbus Defence and Space to sign a contract for phase 1B work on a technology demonstrator for a next generation fighter, the core element of a future combat air system (FCAS) backed by France, Germany and Spain.
That lack of agreement stems from Airbus DS effectively seeking to be joint prime contractor, while Dassault insists on holding exclusively that lead management role and to be the project architect.
Dassault, headquartered in the Paris suburbs of Saint Cloud, set out the dispute in its results statement.
“Dassault Aviation is prime contractor for pillar 1,” the company said. “The prime contractor/main partner relationship is still to be clarified.
“Dassault Aviation is seeking a clear statement of acceptance of its role as prime contractor by Airbus Defence and Space for the NGF (in symmetry with Eurodrone).”
Dassault sought that lead position for the full fighter program, not just the demonstrator project, Trappier said. The first flight of the demonstrator had already slipped back three years to 2027, and there was prospect of sliding to 2028, he said.
Pillar one refers to the fighter project in FCAS, with the other six pillars comprising fighter engine, remote carriers, combat cloud for network communications, simulator labs, sensors, and stealth.
Airbus was prime contractor on the Eurodrone, and Dassault was happy to be subcontractor, Trappier said.
Eurodrone is a medium-altitude, long-endurance drone, with a budget of €7.1 billion, backed by France, Germany, Italy, and Spain.
Airbus Also Has Plan B
Airbus chief executive Guillaume Faury said the focus was to reach agreement on plan A on the future combat air system, but there were other options if the talks broke down.
“There’s a plan A and plan A is FCAS…There are other options, we think of other options but we are working for plan A,” he told Reuters on July 20.
“We want to make it happen. I don’t want to be discussing plan B. That will undermine the likelihood to get to plan A, because plan A is plan A and remains plan A,” he said at the Farnborough air show.
Trappier, asked at the press conference if he spoke to Faury to resolve the dispute, said he spoke often to the top Airbus executive — Airbus was a member of the Gifas aerospace trade association — but rarely about FCAS.
The key interlocutor was Airbus DS chief executive Michael Schoellhorn, he said, as the partners were the Airbus units in Germany and Spain.
“He (Faury) is not German, nor Spanish,” Trappier said.
Asked about Japan joining up with Britain on a new fighter, Trappier pointed up the lead role of BAE Systems on Tempest, and said that was the right approach, one to adopt for the European next generation fighter.
“I advise a strong leadership,” he said.
The partner nations on the European FCAS — France, Germany and Spain — have been drafting a joint statement welcoming the signing of a contract for phase 1B.
That was effectively a high-level political elbow intended to nudge Airbus DS into accepting Dassault’s industrial leadership on the fighter project.
The head of the French Direction Générale de l’Armement procurement office, Joël Barre, met May 10 his German counterpart, and Benedict Zimmer agreed to drafting that joint statement, which included the terms of cooperation in work after phase 1B.
Meanwhile across the English Channel, the U.K. said July 18 Japan was taking part in joint concept analysis on the British Tempest new generation fighter project, with decisions due on whether to enter partnership by the end of the year. Italy was also taking part in that concept analysis.
That raised the prospect of Japan pooling its F-X fighter jet project with the Tempest, with Mitsubishi Heavy Industries working with BAE Systems.
The U.K. prime minister, Boris Johnson, said on the same day at the Farnborough air show the Tempest demonstrator would fly in 2027. London has earmarked a budget of £2 billion ($2.4 billion) for the Tempest to 2025, and the Tempest fighter was due to fly in 2035.
The budget for phase 1B has been reported to be worth €3.6 billion ($3.7 billion) and runs 2021 to 2024, while phase 2 runs 2024 to 2027, with a budget of €5 billion, backed by the three partner nations.
Tough Times
The Russian invasion of Ukraine has raised tension on raw materials, energy, and the supply chain, Trappier said. The company closed its Moscow office for the Falcon business jet and its Dassault Falcon Service, as part of the Western sanctions against Russia.
Russian sanctions against the Western allies put “severe pressure” on the supply chain, forcing Dassault to look for other sources, he said. There was also potential risk on electronic components due to tension between China and Taiwan.
Dassault reported a sharp gain in orders in the first half, with orders worth €16.3 billion, up from €3.9 billion a year ago.
Despite tough business conditions, Dassault reported upbeat financial results.
Rafale export contracts accounted for €13.9 billion of that total amount, up from €1.9 billion, with orders for Falcon jets making up the balance.
The United Arab Emirates paid a deposit in April for its order for 80 Rafales, making up the bulk of those orders, while Greece signed a contract, which came into force in March, for six more Rafales. That brought the total Greek order to 24 Rafales, following an order last year for 18, including 12 second-hand units flown by the French air force.
Dassault expected Indonesia to pay a deposit for an order for 42 Rafales by the end of the year, Trappier said.
That Indonesian deal could then be entered in the order book, once the deposit was paid. That order consisted of an initial six-strong batch, followed by 36 more.
Dassault’s order book rose to €34.1 billion, up from €20.8 billion.
Thales reported July 21 a total order book of €38 billion. Dassault holds 24.6 percent of the electronics company.
Dassault’s adjusted net profit rose to €318 million from €265 million, with a net profit margin of 10.3 percent, compared to 8.5 percent.
Sales were stable at €3.1 billion. The cash holding rose to €6.3 billion, up from €4.9 billion.
Dassault was a small company, with 12,000 employees, Trappier said, and had recruited 700 staff, with a target of 1,300 new hires for the full year.
The forecast for 2022 was unchanged, with a fall in net sales, and delivery of 13 Rafales and 35 Falcons.
The company expected a French order for 42 Rafales, with the 30 units expected for the fifth tranche for the air force, and a further 12 to replace those sent to Greece. That order might be made at the end of 2022 or early 2023.
Dassault continued to seek new Rafale export orders, the company said.
India, Serbia, Iraq, and Colombia were reported to be among prospects.
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