France to cut back on Rafale order

Discussion in 'Military Aviation' started by farhan_9909, Aug 3, 2013.

  1. farhan_9909

    farhan_9909 Tihar Jail Banned

    Joined:
    Aug 30, 2012
    Messages:
    5,895
    Likes Received:
    496
    Location:
    Abbottabad,Bannu
    France to cut back on Rafale order

    [​IMG]

    Now, Indian order is all the more important for Dassault

    The French state has decided to cut back its orders for Rafale fighter jets from the current 11 per year to just 26 over the next six years. This could jeopardise the entire Rafale programme unless Dassault Aviation is able to sign the India contract for the sale of 126 fighters for over €10 billion.

    At a press conference here on Friday, France’s Defence Minister Jean-Yves Le Drian, who returned from a trip to India last week, was blunt: as of 2016, Dassault Aviation should count only on exports to support the production of the multirole combat aircraft. That can mean only one thing: wrap up the contract with India or you’re sunk.

    He announced the government’s new Defence Review, known in French as the Draft Military Programme (LPM),for French forces from 2014 to 2019.

    After much wrangling with the government, Dassault had obtained the purchase by the military of 11 jets a year. At a recent press conference, Eric Trappier, CEO of Dassault Aviation, the company that makes the aircraft, warned that anything below 11 per year would be commercially unviable for the company. Dassault has been unable to sell a single Rafale abroad, and the company is pinning all its hopes on the Indian contract.

    It is unclear what sort of assurances Mr. Le Drian received on his recent trip to India. Did the Indians tell him the contract was in the bag and he felt confident enough to announce cuts in the government’s budget for the Rafale or, on the contrary, is this his way of warning Dassault Aviation and the French public of the woes that lie ahead?

    “There are countries that are more than interested in the Rafale and I am speaking particularly of India, Qatar and others, and I am very sure of the Rafale’s export capacity in the months ahead,” Mr. Le Drian said in a radio interview on Friday morning. “I am very hopeful that the negotiations with India will be fruitful.”

    Was that his way of sending a positive message to say that relief was on its way because the Indians are ready to sign on the dotted line?

    But news from New Delhi points in another direction altogether.

    Reports indicate that serious doubts have been raised about the life cycle costs of the Rafale by responsible and respected politicians like the former Finance and Foreign Affairs Minister, Yashwant Sinha, and that Defence Minister A.K.Antony, with his habitual caution, has ordered a cost review which could seriously delay the signature. Beyond October, with elections looming large on the horizon, it is difficult to imagine a quick signature of the biggest defence tender ever floated by India.

    The LPM aims to make “exceptional savings,” notably through a reduction in force (RIF) exercise, through the sale of immovable assets belonging to the country’s armed services and by limiting its orders for the Rafale.

    The daily Le Monde noted in its edition dated August 2: “To date, the aircraft built by Dassault Aviation has never sold outside France. India could be the first foreign country to equip its air force with it, but nothing is concrete yet. And past mishaps by way of failed negotiations with Brazil and the United Arab Emirates should incite the executive to display greater prudence in the matter.”

    As another newspaper, the economic daily Les Echos, pointed out, the army budget is posited on at least one major foreign sale of the Rafale.

    Normally speaking, if the current rhythm of delivery to the French military is maintained, Dassault should deliver 66 planes by 2019. But under the LPM announced by the minister on Friday, the French military will purchase only 26 aircraft during this period, creating a shortfall of €4 billion for Dassault.

    “Dassault Aviation will have to sell some 40 planes to France’s commercial partners,” wrote Le Monde, if it is to juggle production costs, the army’s requirements and the minimum number of aircraft it must build to maintain the commercial validity of the Rafale programme. “The minister appeared most optimistic that the plane would be sold abroad. But what would happen if foreign sales are not concluded? All the aircraft produced will be bought by the French military. At €100 million apiece, the bill will have climbed to about €4 billion by 2019.” French plans to impose budget cuts could go up in smoke, the paper suggests.

    The Indians being fine negotiators have realised that Dassault Aviation is desperate to sell. They are therefore also dragging out the negotiating process in a bid to squeeze every possible concession from Dassault. But there could come a tipping point beyond which the negotiations will stall because of India’s domestic electoral calendar. The Indian Air Force badly needs this plane, and the negotiators should be sanguine enough to move back from the brink before the tipping point is reached.

    Link - France to cut back on Rafale order - The Hindu
     
  2.  
  3. farhan_9909

    farhan_9909 Tihar Jail Banned

    Joined:
    Aug 30, 2012
    Messages:
    5,895
    Likes Received:
    496
    Location:
    Abbottabad,Bannu
    After investing 40billion dollars.France could not even induct 100 into there air force in total.

    May be they will later order the Eurofighter
     
  4. trackwhack

    trackwhack Tihar Jail Banned

    Joined:
    Jul 20, 2011
    Messages:
    3,757
    Likes Received:
    2,573
    Does this mean we can induct at a faster rate should the deal be signed with more planes being built in France than was initially suggested?/ If the deal is signed, then there will be more orders later so not much will be lost in terms of manufacturing knowhow for us, rather more a cost factor.
     
    TrueSpirit and Kunal Biswas like this.
  5. Neil

    Neil Senior Member Senior Member

    Joined:
    Jun 23, 2010
    Messages:
    2,610
    Likes Received:
    1,946
    Location:
    India
    are u for real....??

    france will be inducting 180 rafale and 115 already inducted.... plus export orders ...!! way better than jf 17 can even dream of....
     
    Last edited: Aug 3, 2013
  6. farhan_9909

    farhan_9909 Tihar Jail Banned

    Joined:
    Aug 30, 2012
    Messages:
    5,895
    Likes Received:
    496
    Location:
    Abbottabad,Bannu
    Ooops

    I was wrong.I thought only 80 are inducted so far
     
  7. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    If all goes well, India will end up having more Rafales than France...
     
  8. syncro

    syncro Regular Member

    Joined:
    Feb 24, 2012
    Messages:
    116
    Likes Received:
    113
    Location:
    Tuscany, Italy
    French planned buy 286 Rafale at the end... 180 are only the confirmed order for now.

    There are also the cut of 34,000 military personnel so French Army go down from 228.000 to 194,000 military.

    The 3% max deficit in the Eurozone kickass :)

    But need badly that 180 Rafales... the 210 Italian Eurofighters and F-35s are too few for bombing Berlin alone
     
    TrueSpirit likes this.
  9. rusellviper89

    rusellviper89 Regular Member

    Joined:
    Mar 23, 2013
    Messages:
    31
    Likes Received:
    30
    Location:
    Bangalore
    Excuse me did you say Bombing Berlin ?
     
  10. t_co

    t_co Senior Member Senior Member

    Joined:
    Dec 20, 2012
    Messages:
    2,537
    Likes Received:
    699
    Location:
    China
    If Dassault is becoming a forced seller, that's great news for the IAF. Time to play negotiating hardball with them and get advantageous terms on pricing, ToT, warranties, spares, etc.

    If I were the IAF I would start 'serious negotiations' with Sukhoi for the Su-35 right about now. The best way to negotiate is when the opposing party is scared shitless.
     
  11. wrigsted

    wrigsted Regular Member

    Joined:
    Jan 13, 2012
    Messages:
    63
    Likes Received:
    52
    Why would anyone bomb Berlin?
     
  12. Yusuf

    Yusuf GUARDIAN Administrator

    Joined:
    Mar 24, 2009
    Messages:
    24,272
    Likes Received:
    11,275
    Location:
    BANGalore
    India should sweeten the offer. We will buy more, price will be this!
     
  13. roma

    roma NRI in Europe Senior Member

    Joined:
    Aug 10, 2009
    Messages:
    3,247
    Likes Received:
    1,861
    First we had a respected member from pakistan giving us some good news , now someone from prc is giving us good
    advice on how to negotiate for a better deal both with dassault and also the russians
    we must be doing something right :rolleyes:

    but that will spoil the "comissions" wont it ?


    really we should make a bid to increase our share of ownership of the company - not buy outright as we dont have expertise in management of european personnel etc

    - alternatively IF we can get people like Lakshmi Mittal, and others who have experience in running large corporations in the euro-zone or britain to be joint partners, then we could consider taking a majority share in the company and gradually move in !
     
    Last edited: Aug 9, 2013
  14. roma

    roma NRI in Europe Senior Member

    Joined:
    Aug 10, 2009
    Messages:
    3,247
    Likes Received:
    1,861
    First we had a respected member from pakistan giving us some good news , now someone from prc is giving us good
    advice on how to negotiate for a better deal both with dassault and also the russians
    we must be doing something right

    but that might spoil the already negotiated "comissions" wouldnt it ?


    really we should make a bid to get a share of ownership of the company - not nec majority share as we dont have expertise in management of european personnel and all that involves

    - alternatively IF we can get people like Lakshmi Mittal, and others who have experience in running large corporations in the euro-zone or britain to be joint partners then we could consider taking a larger share !
     
    Last edited: Aug 9, 2013
  15. bose

    bose Senior Member Senior Member

    Joined:
    Apr 5, 2010
    Messages:
    3,956
    Likes Received:
    2,637
    Location:
    Kolkata, India.
    It is brilliant idea, Lakshmi Mittal may not be well taken by French because of some recent issues with French government but definitely TATA has the image acceptable there...

    India need to work more strategically and have a long term business alliance commitment with France for a stake in likes of Dassault and Aveva ..
     

Share This Page