Dassault: Indian fighter jet deal secure as talks intensify

Dassault Aviation SA (AM) is confident that an accord to supply at least 126 Rafale combat planes to India will cross all hurdles as the French company intensifies negotiations to clinch the first-ever export deal for the jet. Dassault and India are now in final talks to conclude details of the contract, after the Rafale was given preference over the competing Eurofighter jet last month, Chief Executive Officer Charles Edelstenne said in an interview in Paris. Negotiations may wrap up by the end of the year, he said.Selling the Rafale to India would mark a major victory for Edelstenne, who has had to rely on France as the aircraft’s sole customer. The Indian backing for the $11 billion contract has boosted Dassault’s hopes it can also prevail in Brazil, and help raise production rates of the Rafale that are now hovering at the minimum of one a month, the CEO said. “For 15 years, we’ve been saying the Rafale costs less than the Eurofighter,” Edelstenne said. “Now it’s the Indians who are saying it.” Dassault will prevail against the Eurofighter in India because in every competition where the two jets have been in direct competition, the French model gained higher rankings, even if it ultimately didn’t win the final deal, the CEO said. Edelstenne said Dassault can easily boost production to two or three Rafales a month or more if needed, depending on what other orders the company may win. Beyond Brazil and the United Arab Emirates, Dassault is also pitching the plane to other export prospects he said, including Malaysia. Fighting Back Dassault has already delivered 106 of 180 fighters ordered by France, which has said it will order 286 planes over the lifetime of the plane. Edelstenne said India’s naming Dassault as lowest-bidder would help generally export prospects . British Prime Minister David Cameron has said he would keep fighting for the Eurofighter Typhoon, partly built by BAE Systems Plc (BA/), to get back into the contest. Louis Gallois, the CEO of European Aeronautic, Defence & Space Co. (EAD), said yesterday the only way for his company to get back to into the contest is if talks between Dassault and the Indian side fall through. Until India decided on the Rafale, Dassault had failed to win any export contracts for the aircraft, losing out in a half dozen competitions to countries including Singapore, South Korea, Morocco, the Netherlands, and Switzerland. U.S. manufacturers beat Dassault in all those contests except in Switzerland, where Saab AB (SAABB)’s Gripen has been pre- selected. The company still hasn’t given up in Switzerland, Edelstenne said, citing a review of the decision process. Long Relations Dassault’s relations with India date back 60 years. India was the very first export customer for Dassault, ordering 71 Ouragans in June 1953, and India has purchased most Dassault models sold since. India replaced the Ouragans with Dassault’s Mystere IV A in 1957, procuring 104 in 1957 and using them in 1961 for air strikes against the Portuguese colony of Daman. The French company will gradually turn over the manufacturing of its plane for the Indian market to local businesses because that was a requirement India had set for all competitors, he said. Dassault will provide the assistance required to do that. “Little by little, the whole plane will come to be produced in India within 10 years,” he said. “We are open to all transfers of technology, I don’t fear competition.”