Dassault Aviation: Financial Release - July 19, 2018

He was a tenacious and hard worker man with a spirit of conquest.

Aeronautics was his passion.

At last, he anticipated and settled his successorship by appointing Charles Edelstenne, as head of GIMD with the agreement of all of his children.

3.   Group activities

3.1       Program developments


Falcon programs

Highlights of the first half of 2018 were:

·       the order of 18 Falcon including Falcon 5X cancellations and the first Falcon 6X orders, the sale of a 5th Falcon 2000 Maritime Surveillance Aircraft to the Japanese coastguards, and the sale of 1 Falcon 2000LX converted to a testbed airplane to the German Aerospace Research Center (DLR),

·       the delivery of 15 Falcon,

·       on February 28, 2018, the official launch and start of marketing of the Falcon 6X. The program is unfolding as planned, with the selection of the main partners and the installation of design platforms in Saint-Cloud and Mérignac.
This new aircraft will have a range of 5,500 NM, unequaled comfort with a cabin width of 2.7 m and a volume of 52.2 m3. This twinjet will be equipped with Pratt & Whitney PWC 812D engines and will reach a maximum speed of Mach 0.9,

·       the completion of flight tests for the certification of the Falcon Eye system operational gains for the Falcon 8X,

·       the announcement of the new Falcon Connect service, an integrated solution for communications management and data exchange between aircraft and ground networks. This service will be available on new aircraft and as a retrofit early 2019,

·       concerning mission aircraft, the February 28, 2018 decision by the French Government to choose the Epicure mission Falcon to handle Universal Electronic Warfare Capacity (CUGE), and replace, from 2025 on, the two TRANSALL C-160 Gabriel currently in service,

·       the ongoing future Falcon specification.

DEFENSE programs

Rafale

Highlights of the RAFALE program in the first half of 2018 were:

·       the entry into force of the option for 12 additional Rafale for Qatar following the receipt of the first down payment on March 27, 2018,

·       delivery of 2 Rafale to France, bringing the total Rafale delivered to the French Forces to 151 out of the 180 aircraft ordered,

·       the delivery of the 9th Naval Rafale retrofitted from the F1 to the F3 standard,

·       the ongoing development of the F3-R standard,

·       the launching of preliminary studies for the development of the F4 standard,

·       continued fulfillment of Rafale contracts for Egypt, Qatar and India,

·       training of pilots and implementation of support for Qatar prior to the start of the 1st aircraft deliveries,

·       the continuation of promotional and prospecting activities related to Rafale Export.

Mirage 2000

For Mirage 2000, it should be noted that in the 1st half of 2018:

  • upgrade works for the French Mirage 2000D continued,
     
  • as well as discussions with the United Arab Emirates Armed Forces following their announcement of their intention to upgrade their Mirage 2000-9 fleet.

MARitime SURveillance and MARitime PATrol aircraft

In addition to the sale of a 5th Falcon 2000 Maritime Surveillance Aircraft to the Japanese coastguards, and the choice by the French Government for the Epicure Falcon mission, the 1st half of 2018 was marked by:

  • continued system integration tests and flight tests for renovation of the ATL2 combat system,
     
  • the continuation of development works on Falcon 2000 Maritime Surveillance Aircraft for the Japanese coastguards,
     
  • the continuation of works to add capacity for dropping SAR (Search And Rescue) chains for the French Navy's Falcon 50 SURMAR fleet.

Drones:

For drones, highlights in the first half of 2018 included:

  • the notification by the French Defense Procurement Agency (DGA) of a new market for stealth flight studies and tests over the period 2018-2020 for nEUROn, and consequently, the preparation of the demonstrator for the 2018 flight test campaign,
     
  • the end of the feasibility study for the UCAS (Unmanned Combat Air System) demonstration program with our French and British partners following the decision of the British government not to continue that demonstration project,
     
  • continuing construction with our partners Airbus Defense and Space and Leonardo of the MALE RPAS (Medium Altitude Long Endurance Remotely Piloted Aircraft System) drone project with European technologies. The intermediate "System Requirements Review" milestone was achieved on January 29, 2018, and a scale 1 model of the aircraft was unveiled on April 26, 2018 at the ILA show in Berlin. Germany is the leader country and Airbus the industrial leader.

Finalization of the "Invitation To Tender" by the OCCAR (Organization for Joint Armament Cooperation) is now expected for the second half of 2018,

  • further to the common statement in July 2017 between France and Germany (French President and Chancellor of Germany), both countries signed a Letter Of Intent in June 2018 to launch the Future Air Combat System (SCAF) project to create a combat system around a combat aircraft that combines piloted platforms (future-generation fighter aircraft, tankers, Awacs) and drones : France has been designated as the leading nation. At the same time, Dassault Aviation and Airbus Defense and Space signed an agreement confirming Dassault Aviation's leadership as architect for the combat aircraft (ILA Berlin in April 2018).

We have now to establish the roadmap that shall begin with the studies. Our goal is to obtain the launch of a demonstrator,

  • following the initial firm order for the upstream study program "Man Machine Teaming" in 2017 (definition and concept modelling of the Man System relationship in the future combat system) the 1st studies have been implemented during 2018 1st half.

India

Indian needs for combat aircraft are material (Request For Information for 110 aircraft for its Air Force and 57 aircraft for the Navy), the "Make in India" success is a priority.

In this context, the civil and military aeronautical activities of the Dassault Reliance Aerospace Limited Joint Venture (JV DRAL), created in 2017, should enable us to meet our offsets commitments provided for in the contract signed to supply 36 Rafale, to build the foundations to reach our commercial goals with India, and to improve our competitiveness in manufacturing Falcon 2000 parts in India.

JV DRAL industrial operations were launched in April 2018 in the presence of Loïk Segalen, Chief Operating Officer of Dassault Aviation, and Suresh Kakani, Vice Chairman & Managing Director of the supervisory authority for the development of the free zone where JV DRAL is located.

The ramp-up will take place gradually according to a milestoned industrial plan to ensure the performance of JV DRAL at each stage of the transfer.

We have also launched the construction of the initial infrastructure and have begun to recruit and train Indian employees. The first Falcon 2000 subassemblies are expected to come out of production in 2018.

When the Dassault Aviation Executive Committee meeting was held in New Delhi in April 2018, the Directors and Chief Executives of the company went to India to acknowledge the development of JV DRAL and reaffirm Dassault Aviation's commitment to "Make in India".

The GIFAS visit to India led by Eric Trappier, Chairman of GIFAS, also gave a large delegation of French industry leaders the opportunity to go to Nagpur to interact with the JV DRAL management team and promote the development of partnerships between Indian and French Supply Chains. We have also continued to establish a production line in India with the implementation of a local supply chain for pylons, drums, primary parts and engineering.

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