Dassault logs record deliveries in ’09

 - March 29, 2010, 7:52 AM

Dassault Aviation last month reported its 2009 sales and delivery totals, and the numbers were mixed. The company ended the year with a net tally of minus 163 Falcon orders but a record 77 deliveries. The company has no plans for job cuts in France, although it has slashed the U.S. workforce by 20 percent since the beginning of the downturn.

At a press conference in Paris last month, chairman and CEO Charles Edelstenne said that the negative net total of orders includes, among others, NetJets’ cancellation of orders for 65 aircraft. The fractional operator is scheduled to have Falcons delivered through 2014 but has canceled all Falcon deliveries beyond that year. “They will be re-ordered. NetJets’ CEO told me he still wants to buy more Falcon 2000 series and Falcon 7Xs,” Edelstenne stated.

The net orders were estimated to be minus U3.9 billion (minus $5.3 billion). Falcon revenues, at U2.44 billion ($3.3 billion), grew by 5 percent. The total operating income, at U393 million ($540 million), translated into an 11.5-percent operating margin. Falcons accounted for 71 percent of Dassault’s revenues; the company’s military business accounted for the rest.

The 77 deliveries, albeit healthy, fell short of the hoped-for 90. The business jet deliveries consisted of one Falcon 900DX, 17 Falcon 900EXs, one Falcon 2000DX, three Falcon 2000EXs, 23 Falcon 2000LXs and 32 Falcon 7Xs.
In 2008, Dassault delivered 72 business jets.
Despite the cancellations, the Falcon backlog stood at 249 at the end of last year. This represents three to four years of deliveries and is valued at U7.6 billion ($10.4 billion).

The first cancellations came from North America, Edelstenne said. A number of cancellations came from large corporations with flight departments. “Some of these large corporations are not even in a difficult situation. But they do not know how long the crisis may last so they are shedding nonessential investment,” he explained. Charter operators and wealthy individuals canceled only a few orders, he said.

Although the pace of cancellations has slowed, Edelstenne said he could not report any upturn in sales yet. The production rate is now set at 5.5 aircraft per month–60 per year, as Dassault counts 11 productive months. Today’s production will be delivered in two years, he pointed out.

Edelstenne forecast steady revenues for this year, with approximately 80 Falcon deliveries, including 25 to 30 Falcon 7Xs.

The company has no layoffs planned and has partially lifted the part-time working arrangements it instituted to cope with the crisis (see AIN, March page 18).
In addition, some work has been moved from one factory to another, to balance the workload. For example, wiring installation has been transferred from Mérignac to Biarritz and center wing-box manufacturing for the Falcon 2000 and 900 series has moved from Biarritz to Seclin.

Development of the large-cabin Falcon 900LX is said to be progressing, with two aircraft in flight test. Certification has moved right from the previous goal of the first half to the second half of this year.

Edelstenne also made a few comments about the SMS. “Phase A of the design is complete,” he said, meaning that “all the decisions about the aircraft’s architecture have been made.” The company is said to be in discussion with engine makers Honeywell, Pratt & Whitney Canada, Rolls-Royce and Snecma. Rolls-Royce was announced as the selected supplier in 2007, but the competition was later reopened.