Eric Trappier, the CEO of Dassault Aviation (DA), the manufacturers of the Rafale Multi Role Combat Aircraft of which India is planning to purchase 126, said in Paris on Thursday that the company was living through times of “hope and uncertainty” and that it was “important to sign the Rafale contract with India.”
Referring specifically to the Rafale programme, Mr. Trappier said the aircraft carried “our hopes with exports and its operational success in Mali. However, questions weigh on budgetary policies concerning French programmes.” It was therefore key to the company’s future that the contract with India be signed. “We know that there is an election in India next year. It could even take place earlier. If we do not sign by the end of the year, it could be done after the elections,” a confident Mr. Trappier told The Hindu.
Mr. Trappier, Dassault Aviation’s 53-year-old CEO who took over last year, was speaking at a press conference announcing the company results for the first six months of this year. The company, which also manufacturers the famous Falcon executive jet, said it has taken 27 new orders for the Falcon, compared to 25 in the first half of 2012. The company has delivered 29 Falcons and 5 Rafale jets, compared to 34 Falcons and 4 Rafales including the same period last year. DA registered net sales of over €1.8 billion with an operating income of €187 million and an adjusted net margin of 9 per cent.
With French Defence Minister Jean-Yves Le Drian on a visit to India, the rumour mill in Paris is suggesting that a final signature is imminent. But in New Delhi there are strong rumours, suggesting that a signature could be pushed back beyond October due to objections raised by respected members of the opposition.
France is the only country to use the Rafale (there have been no exports so far) and Dassault Aviation provides the French air force with 11 planes each year. But given France’s dire economic situation and proposed cuts in military spending, this may no longer be possible.
Mr. Trappier said manufacturing less than 11 jets per year would not be industrially viable. The French government’s White Paper on defence expenditure plans to reduce the long-term fighter combat fleet from 300 to 225 aircraft. The contract with India therefore has become crucial to the very survival of the Rafale programme. “This will have a direct impact on our defence programmes,” Mr. Trappier said.
“The orders are entered into our books the moment the contract is signed. We are still waiting for the signature of the Indian contract. We have not encountered any particular difficulties in our negotiations. It is just a very long process,” he said.
Mr. Trappier confirmed that Dassault Aviation would sign a joint venture with Mukesh Ambani’s Reliance Industries Limited (RIL) in India but that there would be no joint venture with Hindustan Aeronautics Limited (HAL). He refused to be drawn into the exact definition or nature of Dassault’s partnership with HAL.
Asked about a letter objecting to the “high” life cycle cost of the Rafale reportedly sent by former External Affairs Minister Yashwant Sinha to Defence Minister A.K.Anthony, Mr Trappier said: “The opening of negotiations over the Rafale has not been to the taste of everyone, especially of two or three other countries. So questions are being raised. What I can say is that the Indian tender process was extremely detailed, long, serious and precise with exacting standards so this is a considered and deliberate choice. Secondly, on the life cycle costs of the Rafale, I can confidently say that the Mirage 2000 and the Rafale are amongst the cheapest planes in terms of life cycle costs and maintenance. If you compare the Tornado to the Mirage for instance, our plane is much, much, much cheaper than the Tornado.”
Asked whether Dassault Aviation had asked that there be two separate companies for the production of the Rafale — HAL on the one hand and a joint venture between Dassault and RIL on the other, Mr. Trappier said: “Right from the beginning we have had a partner called Reliance that will be engaged in producing a certain number of components for the Rafale — this will be in the private sector. Secondly, our only partner for the manufacture of the Rafale in India is HAL. There has never been any doubt on this subject and we are working actively with HAL on the one hand and Reliance in a joint venture on the other. As far as responsibility goes, we will be responsible for the Rafale just as Thales will be for the radars. But at this stage I would not like to comment further on this issue.”