- Falcon family's 2015 order tally is half level of prior year
- Buffett's NetJets compounds slide with 20-plane cancellation
Dassault Aviation SA said sales of its Falcon business jets tumbled 50 percent last year, hurt by slumping demand from once buoyant markets including Russia and Brazil.
The French company won orders for 45 corporate jets in 2015, half the previous year’s total, it said Tuesday, sending the stock down the most in 4 1/2 months. The tally was just 25 planes factoring in the cancellation of a contract for 20 Falcons previously placed by U.S. fractional-ownership specialist NetJets inc.
Sales were impacted by the economic environment, “especially in emerging countries,” Paris-based Dassault said. Some 55 new Falcons were delivered, 10 fewer than anticipated, it said, reflecting “the weakening of the order intake.”
Long-term spending on private jets is slowing for the first time since 2009 as slumping commodity prices sap demand in emerging markets, Honeywell International Inc., which makes avionics and engines for business aircraft, said in an annual survey. The slide reflects weakness in Brazil, Russia, India and China and the impact of political conflicts in the Middle East and Africa, it said.
Dassault said in July that NetJets, owned by Warren Buffett’s Berkshire Hathaway Inc., had scrapped an order for Falcon 2000 planes that dated back to 2006. Production glitches are also having an impact, with the Falcon 5X, designed to carry 14 passengers 4,750 nautical miles, postponed beyond its planned service entry in 2017 due to issues with its Safran SA engine.
Canadian rival Bombardier Inc. has also pushed back delivery of its Global 7000 by two years to 2018, canceled the smaller Learjet 85, and is cutting about 1,750 jobs to match production of its biggest Global 5000 and 6000 models to shrinking demand from Russian oligarchs and Chinese billionaires.
General Dynamics Corp.’s Gulfstream arm is bucking the slowdown and grabbing more orders with its in so-called large-cabin models favored by the wealthiest private buyers and corporations. Third-quarter orders were the most since 2011, the U.S company said in November.
Dassault Aviation is now 56 percent owned by the founding family’s Groupe Industriel Marcel Dassault, with Airbus Group SE cutting its stake to less than 25 percent and saying in October that it aims to exit entirely in 2016.
The remaining shares are traded. The stock fell 6.6 percent, the most since Aug. 24, and was priced 4.6 percent lower at 1,074 euros at 1:53 p.m. in Paris.
The company will release full-year revenue figures on Feb. 26. Stuttering demand for the Falcon range contrasts with major successes for its Rafale warplane, which recorded 48 export orders in 2015, split evenly between Egypt and Qatar. While the Falcon backlog had shrunk to 91 planes as of Dec. 31, down 30 from a year earlier, the Rafale has 83 unfilled contracts, up 40.