Dassault To Reduce Falcon Biz Jet Production

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Dassault To Reduce Falcon Biz Jet Production

Economy Takes Its Toll On Production ...

Dassault Aviation has decided to reduce the combined production rate for Falcon business jets next year, in response to a weaker demand for these aircraft. "Today, we have a healthy 159-aircraft backlog. We will maintain the current delivery pace up to mid-2003, then cut production to five aircraft monthly, down from six or seven," Chairman/CEO Charles Edelstenne told AviationNow. Since Jan. 1, the French manufacturer concluded orders for more than 75 Falcons.

Dassault's cautious stance results from the ongoing economic downturn, exacerbated by post-9/11 concerns, and the anticipated market uncertainty if the U.S. mounts strikes against Iraq. "The U.S. economy is not recovering, Europe is lagging and we fear a [more serious] global crisis, the worst environment we could think of," Edelstenne pointed out. Dassault's competitors, already hit by slower sales, have slashed production and cut jobs. "The time is ripe to demonstrate how flexible Dassault is," Edelstenne said.

... Military vs. Bizjet Contracts

In the last few years, two- and three-engine Falcon jets generated an increased proportion of the company's total revenues and largely exceeded military sales. During this year's first half, business jets accounted for 72 percent of the company's 1.47 billion ($1.44 billion) revenues. However, defense-generated sales are expected to gradually return to a significantly higher level as deliveries of the Rafale combat aircraft adopt an accelerated pace.

Business jets nevertheless retain a key role in Dassault's long-term strategy. In an initiative that could lead to an expanded product range and bigger share in the business aviation market, Dassault has begun exploring the merits of a mid-range business twinjet. "If we could offer such an aircraft with a price tag of no more than $10 million, we would certainly attain impressive results. But, of course, this could not be achieved. However we are considering workable compromises," Edelstenne said. "No decision has been taken as yet, we are just beginning our studies."