Dassault Ponders Future Profits

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Although it was able to post an increase in first-half profits, business jet manufacturer Dassault remains downbeat about industry prospects. The French company's net profit of EUR145 million (USD$142.4 million) was up by EUR19 million on the same period last year. Its operating profits also rose -- from EUR187 million to EUR223 million. Although the manufacturer reported higher first-half profits, it warned of the gloomy state of the commercial aviation sector ahead of an expected war against Iraq.

In a press release, Dassault's chief executive, Charles Edelstenne, warned of a worsening bizjet market. "The world is going through a period of economic crisis," Mr Edelstenne said. "We're expecting a reduction of the [business jet] market in the coming months." He said the company would slow production of its Falcon business jets next year to around 60. This year its delivery target is between 60 and 70 planes. Falcon orders, boosted by demand for the new 7X, rose slightly to 57 in the first half from 55 in the same period last year, while deliveries dropped to 30 from 34.

Dassault, facing strong competition from politically powerful U.S. and European rivals, is struggling to sell its Rafale combat aircraft to export customers, but three-quarters of its current turnover is in business jets. Nevertheless, Edelstenne confirmed that Dassault was considering a mid-range business jet: "We are in the process of looking at whether it's reasonable to aim for an aircraft that has the essentials, the best attributes, of a Falcon at a price acceptable to the market."