Dassault Aviation had mixed fortunes in 2005 with a slight fall in revenue and net result, balanced by a record 123 firm orders for Falcon jets, up from 69 the previous year and 40 in 2003. At a press conference in Paris on Thursday, chairman and CEO Charles Edelstenne said he does not expect the same level of sales to be maintained this year. However, Falcon deliveries, which fell in 2005 compared to the previous year, are expected to be higher in both 2006 and 2007.  

Decisions are expected this year on Dassault’s feasibility plan for a new and cheaper midsize Falcon–possibly to rival Bombardier’s Challenger 300–and the sale of its shareholding in Thales.

Traditionally about 60 percent of Dassault sales come from the U.S. but the 2005 percentage was about 50 percent. “It’s not a sign of a weakening market in the U.S. but a sign of strengthening demand globally,” Edelstenne said. Growth has been particularly strong in Western Europe and in Eastern Europe–especially Russia and Ukraine–which last year accounted for 10 percent of total Falcon sales. Middle East countries also approached 10 percent of orders. Brazil and South America continued to show strength, especially with the Falcon 2000EX and the new Falcon 7X, the latest addition to the family.

Dassault to date has sold more than 80 7Xs. Currently 30 aircraft are in various stages of production with first deliveries earmarked for spring 2007. Production will increase to three per month in the second half of that year. The first-ever sale of a new Falcon to China took place in December when Citic, the country’s largest state owned financial services holding company, purchased a 900DX. Dassault’s present backlog is for more than 200 civil aircraft. Last year it delivered 51 business jets, down from 63 during the previous year. Dassault expects deliveries of “60 to 70 Falcons this year and 75 to 80–or more–in 2007.”

Consolidated orders of all Dassault military and business aircraft reached e4.53 billion ($5.44 billion) in 2005, up from €4.02 billion ($4.82 billion), bringing its order book to €10.8 billion ($13 billion), up from €9.72 billion ($11.67 billion) at the end of 2004. This is made up of 54 percent for Falcons, 33 percent for Defense France and 13 percent for Defense Export. Sales of €3.43 billion ($4.12 billion) were 0.9 percent down in the year and net profits fell by 2.6 percent to €305 million ($366 million). Falcon jets accounted for 48 percent of consolidated sales.

Edelstenne confirmed that the French defense ministry signed a firm agreement on February 8 to build the Neuron unmanned combat air vehicle demonstrator for which Dassault is the prime contractor. France’s share of the €405 million ($480 million) project that also comprises Greece, Italy, Spain, Sweden and Switzerland is €180 million ($226 million). Belgium is expected to join the partnership this year. The first flights are earmarked for 2011.

Edelstenne revealed that Apat, the Thales staff shareholders’ association, has expressed interest in purchasing Dassault’s 5.72-percent shareholding in the French defense electronics group and has been speaking to banks regarding financing a bid for the stake. Thales supplies several of Dassault’s defense programs.