Falcon order book fattened by NetJets

 - May 21, 2008, 11:53 AM

For the past four days, the skies over EBACE have been gray, but the overcast and rain have not dampened the spirits of John Rosanvallon. The Dassault Falcon president and CEO has been watching the French business jet manufacturer’s already fat order book grow fatter still here at EBACE and he is forecasting continued demand.

The firm order announced on Monday by NetJets Europe for 20 Falcon 2000LXs is valued at approximately $720 million and adds substantially to a previous NetJets Europe order for 10 of the model.

This latest is the biggest 2000LX order to date, said Rosanvallon in an interview here. And he noted that parent company NetJets U.S. was the 1997 launch customer for the original Falcon 2000. NetJets, he added, has been “by far” the best single customer for the 10-passenger twinjet.

The latest order will take Falcon 2000LX deliveries to NetJets into 2015. NetJets Europe already has an order for 24 larger, long-range Falcon 7Xs. Rosanvallon also has high hopes for the new Falcon 900LX, introduced here at EBACE.    
At this point, Dassault Falcon’s total aircraft backlog is between 450 and 500 airplanes, and more to the point, said Rosanvallon, “our book-to-build ratio is over one.”

As for industry growth as a whole, he remains optimistic, noting that while sales may be “somewhat softer” in the U.S. market, it is more than offset by demand in the rest of the world.

This is particularly true in what are being referred to as the “BRIC” nations–Brazil, Russia, India and China–where new wealth is creating new demand.
Until several years ago, he pointed out, the U.S. was the world’s largest business jet market. “That has changed. In 2005, for the first time, sales outside the U.S. passed the 50-percent mark. In 2006 that reached 60 percent, and in 2007 it passed the 70-percent mark. And in the first quarter of 2008, that trend continues.”
If Dassault is seeing any dark edges to all the good news, it is in the sinking value of the dollar. Approximately 50 percent of the costs of building Falcon business jets, he explained, are in euros, while a little more than 99 percent of aircraft sales are in U.S. dollars. “It is our biggest challenge,” he added.

A lesser challenge remains in the race to get back on the original Falcon 7X delivery schedule, which has been delayed at the interior completion stage. Currently, some aircraft are as much as six months behind schedule. NetJets Europe, which placed an order in September 2006 for 24 Falcon 7Xs was scheduled to take delivery of the first airplane in the first quarter of this year. That date has now been revised to “the last half of 2008.”

On the other hand, Rosanvallon said deliveries of the company’s other aircraft models remain on time, and Dassault has taken positive steps to get back on schedule with the 7X.

While the great majority of Falcon 7Xs will continue to be outfitted at Dassault’s U.S. completion facility in Little Rock, Arkansas, the company is already taking on additional interior completions at its main facilities in Bordeaux, France. To further increase capacity, Dassault has also signed an agreement with U.S. independent completion and refurbishment center Duncan Aviation to outfit green Falcon 7Xs.
The first 7X arrived in May at Duncan’s facilities in Lincoln, Nebraska, and is due to emerge as a finished airplane in the first quarter of 2009. A Duncan spokesman said the company expects to come up to full speed within the next two years and has the capacity to finish as many as six Falcon 7Xs a year.

The contract with Duncan “is part of our effort to reach 40 Falcon 7X deliveries a year by 2010,” said Rosanvallon.