@santro
I'm posting here a article from Paul betts who has been 'Financial Times' aerospace consultant for 33 years
Frances Rafale jet struggles to hit its target overseas
By Paul Betts
Published: October 14 2010 21:23 | Last updated: October 14 2010 21:23
Nicolas Sarkozy likes to portray himself as the executive president. He sees himself as Frances salesman-in-chief promoting the countrys flagship exports, clinching deals around the world, especially with fast-growing emerging countries like China, India, Brazil and the oil-rich Gulf nations. He has even set up a so-called war room in his Elysée palace to support military and civil exports.
But this grand export strategy seems to be running into growing difficulties of late. The new generation EPR European pressurised reactor supposed to be spearheading the countrys ambitions to lead the revival of the world nuclear market is facing all sorts of problems, not least in Finland, the US and in Abu Dhabi where it lost out to South Korea.
Worse, Eurostar, the Channel tunnel high-speed train operator controlled by SNCF, the French state railway, has just ordered German-built Siemens trains rather than those of its national champion, Alstom. Even more worrying is the continuing dearth of export orders for the Dassault Rafale multi-role combat aircraft.
France has yet to win an export order for the Rafale. It has been trying for a decade without success. Securing a foreign order for this combat aircraft is not just a matter of prestige for the French. After all, Serge Dassault, the veteran controlling shareholder of the eponymous aircraft maker, is also a senator and member of the governing UMP party and owner of Le Figaro, the slavishly pro-Sarkozy newspaper.
But there are more important reasons why Rafale export sales are so crucial. Exports would reduce the overall cost of the programme at the same time as providing funds to help finance new research and technology. Without exports, there is the risk that France would no longer be able to ensure the autonomy of its military aircraft industry, especially when the time eventually comes to develop a replacement for the Rafale.
Last, but not least, failure to export the combat aircraft will put further stress on the countrys already stretched Treasury. Indeed, the French Defence Ministry has decided to order 11 additional Rafales next year earlier than scheduled to ensure that production lines keep running. This will cost the taxpayer an extra 800m ($1.1bn).
It is not for lack of trying on the part of the president that France has so far failed to place an export order for the Rafale. But Mr Sarkozy also has a tendency of jumping the gun. He clearly finds it difficult to resist announcing to the world that he has finally pulled off a significant export sale for the Rafale even before the contract is signed and delivered.
A year ago, he announced with great fanfare that France had struck up a privileged relationship with President Luis Inácio Lula da Silva and that Brazil had agreed to buy a first batch of 36 Rafale aircraft. In the long run, the order could rise to 100 combat aircraft. But 12 months later, the deal has yet to be finalised and there are signs that the Brazilians may ultimately opt for the rival Swedish Saab Gripen fighter rather than the more expensive Rafale.
A senior Brazilian government official confirmed this week that Brazil had decided to suspend a final decision until after the second round of the countrys presidential elections at the end of this month. He also suggested the competition was still open. In other words, the choice could still go either way.
This summer, President Sarkozy also announced that the UAE was considering replacing its older fleet of 63 French Mirage jets with Rafales. Once again, the French camp seemed confident they had finally clinched an export order for the aircraft in a region that has traditionally been an important customer for French defence equipment. But this month, the UAE suggested it was also looking at the US Boeing F18 Super Hornet as an alternative. So the prospect of success once again risks turning into a mirage.
Elsewhere, Kuwait and India are looking for new combat aircraft but the competition is bound to be fierce. For several reasons. The first is that the US military-industrial complex is intensifying its export sales drive, not least to compensate for heavy cuts in the Pentagons budget. The second is that Russia is now in the game and has overtaken France as the worlds third largest arms exporter after the US and the UK. The third is a problem purely of Europes own making.
In all these export contests, Europe invariably fields three competing offers of its own the Eurofighter Typhoon, the Rafale and the Saab Gripen which is one more than even the US typically offers. In so doing, it gives its US and Russian rivals an obvious advantage. Until the Europeans finally decide to consolidate their combat aircraft industry, they can only continue to lose altitude.
Paul Betts is a senior FT correspondent based in Paris
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