July 29, 2010 / 7:17 AM / 7 years ago

UPDATE 1-Dassault sees no quick business jet recovery

* H1 operating income up 104 pct

* H1 operating margin 12.4 pct, up from 8.7 pct

* Overhang of used planes stifles business jet recovery

(Adds details, background)

PARIS, July 29 (Reuters) - France’s Dassault Aviation (AVMD.PA) reported a pickup in business jet orders in the first half of the year but warned against betting on a quick recovery in the battered sector due to a glut of planes on the market.

Dassault, which competes with planemakers such as Textron (TXT.N) subsidiary Cessna, General Dynamics (GD.N) unit Gulfstream and Canada’s Bombardier (BBDb.TO) for sales of luxury and business jets, said cancellations were decreasing but new orders were taking time to pick up again.

Dassault sold a net total of two Falcon jets in the first half, compared with 56 net cancellations in the first half of last year when the industry was hit by the financial crisis and a political storm over corporate perks in the United States.

“Owing to the significant number of available-for-sale pre-owned aircraft on a worldwide scale, the group does not predict a business aviation market recovery in the short term,” the company said in a half-yearly results statement on Thursday.

In recent months, some manufacturers and suppliers have said rising flight activity and a decline in the number of used aircraft for sale competing with new planes are signalling that the market has likely hit the bottom of its decline.

Dassault, which also makes the Rafale warplane, posted first-half operating income which doubled to 248 million euros ($322.7 million), due in part to improved currency hedging, and net sales of 1.99 billion euros, up 44 percent.

Net income excluding its stake in French defence electronics maker Thales (TCFP.PA) rose 37 percent to 170 million euros.

The company said its 2010 net sales should be comparable to last year’s 1.38 billion euros, with deliveries of around 85 Falcons and 11 Rafales.

In the first half, Dassault delivered 45 Falcons, up from 26 in the first half of last year, and 5 Rafales, down from 7.

France’s armed forces are so far the only purchaser of the Rafale combat jet, but Dassault said it was in discussions with “several export prospects”. ($1=.7684 Euro) (Reporting by Tim Hepher; Editing by James Regan)

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