At Dassault, the aeronautical crisis was buried in all its glory! Bookings nearly quadrupled between 2020 and 2021, rising from 3.4 billion euros in 2020 to more than 12 billion last year. However, in 2020, the aircraft maker got scared: during these twelve months of an acute health crisis, he registered almost no new orders, and only managed to sell about fifteen business jets.
Conversely, the family business sold 100 aircraft, 49 Rafale fighters and 51 Falcon business jets in 2021. Unexpected result! Egypt has ordered 31 new Rafales, Greece 6 new Rafales and France 12. The recovery in exports continued with the United Arab Emirates (UAE) order for 80 aircraft last December and Indonesia’s order for 42 aircraft, two contracts due to take effect. this year.
Net margin 9.3%
As a result, Dassault Aviation publishes solid financial results for fiscal year 2021 with an adjusted net income of €693 million, representing a net margin of 9.3%. Turnover rose to 7.23 billion against 4.48 billion a year earlier. Thanks to the success of Rafale, the recovery, especially in the United States, of the business aviation market and the signing of large long-term contracts for the maintenance of French Air Force aircraft, Dassault Aviation is benefiting from very comfortable medium-term visibility. . And the context calls for further increases in defense spending.
However, the war in Ukraine presented the group with new difficulties. In the near future, we are talking about the cancellation or freezing of some Falcon orders, for which the Russians are good customers. “Contracts will be frozen and we will no longer be able to support the fleet of Russian Falcon aircraft,” explains CEO Eric Trappier, without giving figures. The group’s boss, however, emphasizes that it’s not so much the loss of a few orders that worries him, but the consequences of a conflict over the supply of raw materials for aeronautics, a topic that was complicated even before the Russian invasion.
Will Dassault be able to fulfill his orders? Curiously, Eric Trappier warned that in 2022 he expects a drop in turnover with the delivery of 35 Falcons and only 13 Rafales compared to 25 in 2021, the schedule of which depends on contracts and production rates,” explains the CEO. Dassault will remain at 2 Rafales per month to meet its short-term orders. “We will have to move to stage 3 on the Emirates contract, but the latter requires the first deliveries only in 2027,” he recalls. While wage negotiations with the unions have been plagued by delays, Eric Trappier doesn’t seem overly concerned about the implications for supplies. The company has raised its salary offerings and hopes to quickly conclude negotiations.
Asked about the outlook for Germany’s promised increase in defense spending, Dassault’s CEO chimed in: “We’ll see if this decision to invest more in defense translates into buying American F-35s first or signing on to the European Air Combat System project.” future (Scaf).” The symbolic agreement on future European cooperation in the field of defense has been terminated. While the first phase of the study ends at the end of March, the second phase of the project is blocked due to a lack of agreement between Dassault and Airbus on the distribution of work.
No new concessions for Scaf
Everything seemed ready this summer. An intergovernmental funding agreement, signed in August, provides for €3.6 billion for detailed studies, known as “Phase 1B”, to fly a demonstrator, a kind of preliminary prototype of the future aircraft. When asked about the reasons for this blocking, Eric Trappier replied: “I’m ready, I’m waiting for the signature of Airbus.” And to warn: “additional requests from Airbus cross our red lines.” Dassault wants to split the work between France, Spain and Germany, but with clear responsibilities and according to each other’s skills.
Airbus’ claims to the chapter on “flight control,” a specialty of Dassault, apparently set fire to gunpowder. Flight control determines the maneuverability of fighters. If Airbus dominates this issue for civil aviation, it does not specialize in hunting, whose trajectories clearly have nothing to do with the trajectories of an airliner.
In this regard, Eric Trappier recalled that Dassault had no problem being an Airbus subcontractor in the Eurodrone project, carried out in cooperation with Leonardo under the leadership of Airbus. Dassault has a €1.2 billion share of the activity on this €7.1 billion contract, specifically with the task of flight control. “In 2022, we will have to decide, we cannot remain with guns at our feet, at some point we will say yes or say no,” the CEO of Dassault Aviation said, emphasizing that he cannot pay his engineering team to wait .