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Dassault Says Canada Mulling Rafale Warplane as JSF Costs Soar

Dassault Aviation SA (AM), maker of the Rafale combat jet, said Canada has commenced talks about an order for the plane as it reviews options amid mounting costs for the Lockheed Martin Corp. (LMT) F-35 Joint Strike Fighter.

Discussions began in January, and Dassault considers the chances of Canada making a purchase sufficiently good that it’s willing to spend the money to undertake a sales campaign, the French company’s Chief Executive Officer Eric Trappier said.

Canada’s minister of public works and government services, Rona Ambrose, said Dec. 12 that the country had “hit the reset button” on a deal for 65 JSFs after consultant KPMG said the estimated $25 billion bill could jump to $46 billion.

“Canada was the first to raise difficult questions about the F-35 and we’ve been talking to them since the beginning of the year,” said Trappier, who was appointed Dassault’s CEO in January after Charles Edelstenne stepped down upon turning 75.

Other countries may be less inclined to consider breaking ranks with the U.S., the executive said at an earnings presentation near Paris, where Dassault in based.

While the JSF has 10 customers for the plane, Britain, Italy, the Netherlands, Turkey, Australia and Norway are full partners with a share of work on the project. Denmark, like Canada, holds the same status, and it, too, has re-opened the order process, while not including the Rafale.

Battle Proven

The Rafale’s performance in engagements in Libya and more recently in Mali, where France used the jet to help retake territory held by Islamic militants, will provide military officials with examples of its combat ability, Trappier said.

The F-35, the Pentagon’s costliest weapons system, hasn’t yet begun combat testing and isn’t scheduled to complete it until 2019, seven years later than planned, according to a recent report by Pentagon chief weapons tester Michael Gilmore.

Dassault was selected last year by India for the purchase of 126 Rafales, though is still negotiating the final deal. The jet has yet to conclude a single export contract, even though its predecessor, the Mirage, drew two-thirds of orders abroad.

The United Arab Emirates shortlisted the Rafale for a 60- plane deal, though other models are under consideration. The Dassault plane is also competing with the Boeing Co. (BA) F/A-18 Super Hornet and Saab AB (SAABB) Gripen for a contract in Brazil.

Dassault is currently producing 11 Rafales a year for the French government and couldn’t drop below that level without sacrificing quality, Trappier said after reporting a 25 percent jump in full-year net income to 524 million euros ($677 million), aided by the delivery of 66 Falcon corporate jets.

To contact the reporter on this story: Andrea Rothman in Paris, France, via aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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