FLUG REVUE March 2005: Interview with Charles Edelstenne

March 2005

CHARLES EDELSTENNE

Charles Edelstenne, CEO and President of Dassault Aviation, discussed with Volker K. Thomalla the future of manned fighter aircraft and Dassault's plans for the future family of Falcon business jets.

FLUG REVUE: On February 15, the Falcon 7X celebrated its roll-out. Is the Falcon family now complete with the addition of the Falcon 7X, or will you expand it to include other models, for example, a supersonic business jet?

Charles Edelstenne: The family is never complete. Otherwise it would mean that we would not develop any new aircraft over the coming years. No, we will finish development work on the 7X and then think about the next aeroplane. We have not yet decided about the future? family.

As far as a supersonic aircraft is concerned, for the time being I don't foresee a supersonic business jet in the next few years, as there are a lot of problems to be solved beforehand. There are some projects around in this area, but the ones I saw at last year's NBAA Convention will only fly supersonically over the oceans and, frankly, I don't see this as the right solution. A supersonic aircraft will not be efficient enough if it can't fly over land at supersonic speeds. Another problem is finding the engine. You have to get an engine manufacturer to believe in the project and be prepared to invest $1.5 to $2 billion.

FR: Dassault has always been committed to business aviation, even when critics said that this segment would never bring any benefit to the company. What percentage of Dassault's revenue comes from business aviation today?

Edelstenne: You are right. At the beginning, when we first entered this market, some people predicted that we would only be able to sell one or two planes, to rich playboys. But since then we have sold 1,800 aircraft. Today, business aviation accounts for between 50 and 75 percent of our revenue, depending on the year. It's a major part of our business. But it's more important than that, because we are still perceived as an military aeroplane manufacturer. In fact, the executive jet business has consolidated our military activity. Our military business has very big peaks and troughs because, when it comes to winning military export orders, there's no virtue in coming second. You either win or lose. And when you win, you win a one, two or three billion euro contract which runs for years. There's no role for the runner-up in the market. This means that some of the time we have big contracts, while at other times, maybe for two or three years, we don't sign any contract. To consolidate the company and keep it alive and stable, we have to have another business besides the military business. In our case, that other business is the executive jet business, which is relatively stable and follows its own macro cycles.

FR: With the Falcon 7X, Dassault revolutionised the way aircraft are built. Would this have been possible without the strong partnership between Dassault Aviation and its sister company Dassault Systèmes?

Edelstenne: No, because Dassault Systèmes has introduced two big revolutions into the industry as a whole. The first was the digital mock-up, the DMU. This concept didn't exist before and was invented by Dassault Systèmes. With the DMU we can represent in 3D all kinds of elements of any industrial product, not just hard parts, but also soft parts. What do I mean by soft parts? Electrical bundles, tubing and wiring. The hard parts are the ribs, the stringers and the skin of an aeroplane, a car or anything else. The day we were able to represent all this in 3D was the day we could do the next step after the digital mock-up. So then Dassault went on to invent Product Life Cycle Management (PLM), which goes much further than the DMU, because it applies the processes which are behind the DMU to the whole life of the product. So, without Dassault Systèmes and its tools, we wouldn't have been able to revolutionise the way products are developed, built and manufactured. Did it help to have both companies in the same hands? Yes it did. We went much further than anybody in the industry. Having one foot in each company, we had sufficient confidence with the tools to go as far as we could. But the risk lay with Dassault Aviation.

FR: With all your knowledge of how to produce aircraft efficiently and with a high degree of automation, do you have a strategic objective to become a supplier for other manufacturers like Airbus or Boeing?

Edelstenne: That is another job. For the time being, we are concentrating on our primary objective, which is to be a prime contractor and develop high technology aircraft. I don't know if some day we might change our strategy. Right now we don't aspire to become a subcontractor for other manufacturers, even if we probably could.

FR: Dassault has a huge facility in Little Rock, Arkansas. How important is your industrial involvement in the United States to your sales in the US?

Edelstenne: I don't know if it promotes sales. Rather, it's a question of efficiency. Two-thirds of our sales are in the North American market. Little Rock is where the completion of our aeroplanes is carried out. It's easier to have the completion centre close to the market. To optimise our production and avoid duplicating some of the work in two different factories, we decided to do all our aircraft completions in Little Rock. It's our biggest plant. There are times when we employ over 2,000 people in Little Rock.

FR: In 2004, the French Government ordered an additional batch of Rafale fighters. How big is the export market for Rafale?

Edelstenne: We're only in the early stages of exporting the Rafale. Due to budgetary constraints, the order for Rafale had been stretched, also the development. Now, we're able to offer an omnirole aeroplane. The main virtue of the aircraft is its omnirole capability. Before, it was only an air-to-air-fighter. In the past, we exported as many aircraft as we sold in France. With Rafale, I hope we will achieve at least the same. But it's difficult to forecast and to put a target on the agenda at the beginning of the programme.

FR: Will the Rafale be the last manned fighter from Dassault?

Edelstenne: It depends on how you phrase the question. If you mean, “Will it be the last manned aircraft?” my answer is no. There will be manned and unmanned aircraft side by side. If you mean, “Will it be the last aircraft built exclusively by Dassault?” then my answer is yes. Our Rafale is certainly the last aeroplane which will be built by one company alone. My feeling is that all future aeroplanes, manned or unmanned, will involve collaboration between several European nations.

FR: How important is the NEURON programme for you?

Edelstenne: Very important. The next fighter programme will not appear before 30 years from now. We are only at the very beginning of delivering the Rafale. An aircraft lasts around 30 years. So you can work out when the next programme will appear. In the meantime, you have to maintain the competence of the design team. If you don't develop any aircraft, you lose that competence. The primary objective of NEURON is to maintain the competence to built a fighter. The French government decided to open the programme to other European nations. It will be a seven nation programme, 50 percent of it funded by the French government. The other 50 percent will come from the partners. The second aspect of NEURON is to pave the way for future projects.

The way European collaborative programmes work today is not the best way. In fact, if you want to really compete with US industry, you have to choose the best to produce a competitor. But today we don't always choose the most competent partner. When a new programme comes along, each country or each company wants to master some of the techniques or takes the opportunity to acquire these techniques. That's the best way to lose.

FR: EADS is a major shareholder in Dassault. Why don't you market military aircraft like Mirage, Rafale and Eurofighter together?

Edelstenne: Because, for the time being, we're in direct competition. We can't market or develop these aircraft together. EADS has a very big share in Dassault. Its share in Rafale is actually even bigger than in Eurofighter. If you look at the mathematics, it owns 46 per cent of Dassault, so indirectly it owns 46 percent of the Rafale. But when you look at the Eurofighter, it has 37 percent plus the Spanish stake. But in the future, after the Rafale, we will come to a common interest.

From page 21 of FLUG REVUE 2/2004

Last updated 12 February 2005

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