Sunday 5 February 2012

Factors that may have helped Dassault sell its Rafale fighter

Many global arms industry observers were surprised  when the Indian Air Force announced that it had chosen French firm Dassault Aviation as its preferred bidder for a roughly $11-billion deal to supply India with 126 jet fighters. After all, despite 12 years of heavy sales bombardments all over the world that sometimes even included the president, only the French air force has ever actually bought the Rafale.

The deal isn't done yet - the French have just won the right to an exclusive negotiation - but it is close enough that shares in Dassault shot up by 20% the day of the announcement.

So how did Dassault finally pull it off? And not just any deal, but what some say is the biggest cross-border military aviation contract of all time? Of course, the Indian government said it went to the low bidder, but that seems unlikely - particularly since the final price hasn't been set, and no one picks up jet planes just because they're on sale.

The Deal
French firm Dassault won $11 billion contract to supply 126 Rafale jets.  Snapped it up with lower bid against Eurofighter Typhoon aircraft. The size of the contract could eventually go up to 200 aircraft.

The Aircraft
Rafale is a twin-engined, delta-wing jet Can fly up to 2,130 km per hour in high altitude.
In service for the French Air Force since 2006. Has been playing air support roles in Afghan war Part of Nato campaign in Libya in 2011.

The Company
Dassault family is the majority owner. EADS, a co-producer of competing Typhoon, owns 46% of the equity.
The company has delivered 7,500 civil & military aircraft to 75 countries.
Dassault came close to selling aircraft to Brazil and Switzerland, but failed to secure a contract as yet.
UAE was reportedly in final negotiations to buy 60 Rafale in June 2010, but drama unfolded when Eurofighter Typhoon was allowed to submit a counter-offer.
French defence minister gave an ultimatum that Rafale production would be halted if the jets could be sold abroad.

And The Snag
The file containing the offset proposals of contenders went missing in December 2010. Later found on the roadside in south Delhi. The episode threatened to derail the tendering process itself.

Others in the race
Six contenders were subjected to extensive field evaluation trials.
Four aircraft eliminated last year on technical grounds were American Lockheed Martin's F-16 and Boeing's F/A-18, Russian United Aircraft Corporation's MiG-35 and Swedish SAAB's Gripen

With billions on the table, and the national security at stake, the French plane must have edged out the multi-national Eurofighter for a number of reasons. Nine possibilities:

A BETTER LUNCH
Of course, nobody makes an important decision for the food, but the prospect of hanging out in Bordeaux, home of the Dassault assembly line, instead of Halbergmoos, Germany, couldn't have hurt. On the one hand, you're in the heart of the French wine country, in a rich and sunny part of France. On the other, you're in cold, grey Bavaria, facing a few years of sausages, sauerkraut, and beer served in mugs the size of small aquariums.

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