June 2, 2015 / 11:30 AM / in 2 years

Dassault Aviation upbeat on Rafale, rolls out Falcon 5X

BORDEAUX, France (Reuters) - The head of Dassault Aviation (AVMD.PA) said on Tuesday he had not given up hope of selling extra Rafales to India on top of a deal for 36 aircraft being negotiated by the French government.

A flag with the logo of French aircraft manufacturer Dassault Aviation flies at the entrance of the company's factory in Merignac near Bordeaux during a visit by the French President March 4, 2015. REUTERS/Regis Duvignau

Indian Prime Minister Narendra Modi last month announced plans to buy 36 Rafales under a government-to-government contract with France, leaving doubts over the status of earlier plans to buy 126 planes, including 18 to be built in France.

“We’ll see about the second stage and how that evolves once the contract for 36 has been signed,” Dassault Chief Executive Eric Trappier said at the rollout of a new business jet.

“I am not disappointed to drop from 126 to 36 planes, because the way I look at it, we are going up from 18 to 36,” he told reporters, referring to the aircraft to be assembled at Dassault’s own production line at Merignac, southwest France.

“We know that the Indian air force’s needs far exceed 36 planes,” he added.

India has rowed back from the commitment of the last government to buy 126 Rafales, saying the twin-engined planes -- which would be able to fly over the Himalayas with a full weapons payload -- would be too expensive.

Defence Minister Manohar Parrikar was quoted on Sunday as saying the original planned purchase was “economically unviable” and that India would not buy the remaining aircraft.

Trappier said Dassault Aviation hoped to win a fourth Rafale export contract this year after landing contracts in Egypt and Qatar, as well as the planned purchases of 36 planes from India.

He was speaking as Dassault showed off its second new business jet in six months, with an unveiling ceremony for the Falcon 5X.

The $45 million jet boasts the company’s largest business jet cabin and can carry up to 16 passengers.

It is expected to make its maiden flight in the summer and enter service in 2017 despite a delay in certifying its Safran (SAF.PA) Silvercrest engines.

Dassault is pitching it at clients in Asia and the Middle East and has already lined up “significant” orders, Trappier said.

The French company competes mainly with General Dynamics (GD.N) unit Gulfstream and Canada’s Bombardier (BBDb.TO) for sales of business jets, which make up 73 percent of revenues.

It is predicting a dip in Falcon deliveries to 65 aircraft in 2015 from 66 in 2014, but expects demand to improve as the economy picks up in the United States, the world’s largest market for business jets.

Additional reporting by Douglas Busvine, Astrid Wendlandt; Editing by Tim Hepher and Mark Potter

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