Economic conditions in emerging countries took a toll on Falcon sales last year, reported Dassault CEO Eric Trappier on March 10 during the annual press conference at the company’s headquarters in Saint-Cloud, France.

Last year Dassault received orders for only 45 Falcons, half the tally for 2014. NetJets canceled an order for 20, bringing the net total to 25. The intake thus represented €1.6 billion ($1.8 billion), compared with €3.9 billion ($4.3 billion) in 2014. Falcon salespeople had hoped to conclude sales in the latter part of 2015 but all the prospects postponed their decision, Trappier said.

The airframer also missed delivery targets, handing over 55 aircraft of the forecast 65. The gap stemmed from the slow order pace in 2015, Trappier said. In value, the combination of deliveries and customer service sales slid by 7 percent over 2014, at €2.5 billion ($2.7 billion).

“Brazil is not doing very well and it will take a few years before growth is back,” Trappier said. In China, slower growth has combined with a crackdown on corruption, leading to a diminished appetite for business jets. India remains in the “great sales potential” category. Low oil prices and international restrictions are hampering the Russian market.

Meanwhile, competitors Gulfstream and Bombardier are said to be aggressive, offering large discounts and putting pressure on Falcon prices. In turn, this contributed to a slimmer operating margin, at 8.6 percent. Trappier said the company is about to launch “ a deep transformation…to reach a level of industrial efficiency and economic performance that can beat the competition, while generating the margins needed for future investments.”

New Programs Continue

He confirmed that the first Falcon 5X twinjet will not be delivered until the first half of 2020, instead of the second half of 2017. Development delays for the Snecma Silvercrest engine are the main reason the schedule has slipped to the right. Engine certification, initially planned for last year, is now slated for 2018.

Trappier reported “a few” cancellations. “But a large part of our customers still trust the Falcon 5X and the market remains interested in the range and cabin,” he said. Manufacturing has been “frozen.”

The throttling back will have an impact this year on research and development (R&D) spending. Last year, the ratio of R&D spending over revenue stood at 10.6 percent.

The Falcon 8X trijet program is said to be on time, with certification planned for the middle of this year. As of December 31, the test fleet had accumulated 450 flight hours on 250 sorties. S/N 3, to be used for marketing purposes, has received a full cabin interior. It will undergo endurance testing this spring. Several customer aircraft (the first one being S/N 4) are at the completion stage at Dassault’s facility in Little Rock, Ark.

Falcon Response aircraft have logged 116 customer support missions since the service was launched in 2014, and 44 of those flights served as stand ins for AOGs.

As of December 31, Dassault’s Falcon backlog stood at 91, a sharp reduction from the 121 one year before. The backlog value dropped to €3.8 billion from €4.4 billion (to $4.2 billion from $4.8 billion). The forecast for 2016 Falcon deliveries stands at approximately 60.

One of the “many challenges” for this year is to work on the “technology building blocks” to prepare future Falcons, Trappier said.