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Dassault Names Eric Trappier as Chief to Succeed Edelstenne

December 18, 2012

Dassault Aviation SA (AM), the French maker of combat planes and business jets, named Eric Trappier to succeed Charles Edelstenne as chief executive officer as the company fights to win its first export order for the Rafale.

Edelstenne, CEO since 2000 and a 27-year veteran of Dassault, must step down next month upon reaching 75, the company said in a statement. He’ll remain a director and member of the audit committee, much as founder Marcel Dassault played a role until his death at age 94. Loik Segalen, now chief financial officer, becomes chief operating officer.

Trappier, 52, has overseen Dassault’s international business since 2006. He takes over starting Jan. 9 as the company is poised to win its maiden export deal for the Rafale, a contest in which he has played a lead role. India chose Dassault for exclusive negotiations for a 126-fighter order in March. So far, the plane has relied solely on domestic orders, a stark contrast to the company’s previous jet, the Mirage, which got two thirds of its sales outside France.

“Trappier’s No.1 objective will to be get the India deal signed,” said Richard Aboulafia, vice president of the Teal Group, a Fairfax, Virginia-based forecaster. “Nailing it down has been difficult, which is predictable, with India, but still it has to be done. It’s the biggest single export fighter purchaser ever.”

Indian Defense Minister A.K. Antony told parliament Dec. 17 that negotiations were continuing.

Front-Runner

A more difficult challenge may be restoring Rafale’s chances in the United Arab Emirates. The fighter was the front- runner for the UAE’s Dassault Mirage 2000-9s replacement, before a public rift more than a year ago led the government to consider other offers, including from Boeing Co. and the Eurofighter consortium of BAE Systems Plc. (BA/) The UAE may buy as many as 60 jets.

The change in management also comes as Europe enters an era where it will no longer be able to afford several fighter programs, driving partnerships in defense. The region currently has three fighter planes competing in export markets: the Eurofighter, built by the U.K., Germany, Spain and Italy, Saab AB (SAABB)’s Gripen, and Dassault’s Rafale.

Dassault is working with BAE to design an unmanned combat aircraft. The French company this month completed first flight of the European Neuron combat drone demonstrator, built with partners including Finmeccanica SpA (FNC)’s Alenia unit and Saab.

Development Delays

The French and British governments have agreed to jointly pursue development of the technology for an operational system, with Dassault and BAE the respective industrial champions. BAE is working on its own demonstrator, the Taranis, although development delays have caused first flight to slip into 2013.

Dassault, with sales last year of an estimated 3.5 billion euros ($4.6 billion), stands out among defense and aerospace companies in Europe in that it has consistently been profitable. Its main peers, BAE, European Aeronautic, Defence & Space Co., Italy’s Finmeccanica and Saab have all lost money in at least one year over the last two decades.

The company is tightly controlled, with the Dassault family, headed by 87-year-old Serge Dassault, the son of founder Marcel Dassault, owning just over 50 percent of the shares. EADS has a 46 percent financial stake, given to it by the French government when EADS was formed in 2000, while about 4 percent of the shares are traded.

Close Ties

Dassault owns 25.96 percent of defense electronics maker Thales SA (HO), giving it a key role alongside the French state, with 27.08 percent, in controlling the company.

Dassault today has a backlog of 8 billion euros, 54 percent of that for Rafales or modernization of older models, and the rest for Falcon business jets, including the 7X model.

Dassault next year plans to unveil details of its newest business jet, still known only as the SMS. The company has been working with suppliers on the design for several years, with the goal of flying the first model in 2014 and starting customer deliveries in 2016.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net

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


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