Podcast: Dassault’s BizJet Power Play

Its $75 million Falcon 10X will take on Gulfstream and Bombardier in the ultra-long-range market—and aims to correct a mistake made decades ago. Listen in as Aviation Week editors Joe Anselmo, Molly McMillin and Thierry Dubois discuss with analyst Richard Aboulafia.

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Rush transcript:

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Joe Anselmo:

Hello and welcome to this week's Check 6 podcast. I'm Joe Anselmo, Aviation Week's editorial director. Nearly three decades after it ceded the ultra-long-range business jet market to Gulfstream and Bombardier, Dassault is back, launching development of the new Falcon 10 X. And the announcement of the 10X comes as the business jet industry is showing new signs of life, with some analysts going so far as to predict a V-shaped rebound.

There's no argument Dassault makes excellent airplanes, but how successful will it be in pushing into a lucrative high end market space long dominated by two rivals?

Joining me to discuss this are Molly McMillin, Aviation Week's Wichita-based managing editor for business aviation; Thierry Dubois, Aviation Week's European technology editor and France bureau chief; and Aviation Week guest columnist Richard Aboulafia, who's just written a column for us about the 10X's unveiling.

Molly, let's start with you. Tell us a little bit about what the 10X is.

Molly McMillin:

Well, good day, everyone. Yes, Dassault announced on May 6th its ultra-long-range jet that will compete head to head with the Gulfstream G700 and Bombardier's 7500. It's an ultra-long-range aircraft with a 7,500 nautical mile range, four zones, has a cruise speed of Mach 0.85, and a top speed of Mach 0.925. So it can go nonstop from say, New York to Shanghai, LA to Sydney, Hong Kong to New York, those sorts of things. Ultra-long-range. Entry into service is expected in late 2025. They've priced it, in 2021 dollars. at $75 million. It had long been called the 9X when people were talking about the next thing that they were going to announce, so that was kind of a surprise that [they] came out with a 10X. It's the first Dassault business jet to have a T tail, the first to have [just] two engines, the first to be powered by Rolls-Royce turbofans, the first to have a composite wing, the first to have dual head-up displays certified as primary flight displays.

Their thinking was when they was talking to customers that ... 15 hours in the air, when you can fly 7,500 miles, is a long flight. So they have a nine foot wide by six foot ... I believe it's six foot, eight inch high cabin for space and four zones. So they're calling it "The Penthouse in the Sky", so that you can have a Master Suite with a shower if you'd like, you can have an entertainment zone, you can have an extra-large dining room, or ... You have a lot of options as a buyer on how you want those four zones to be divided up. So, "looking toward comfort", they're saying, with over 15 hours in the air.

Joe Anselmo:

$75 million. Wow. Thierry, you were telling us that this really didn't come as a surprise to you that Dassault moved forward with this. How come?

Thierry Dubois:

Indeed, that's another illustration of a cultural change in the company. I mean, they now think ... They no longer design an aircraft primarily for the pilot. They design it primarily for the paying customer, for the passenger, which seems obvious when you think business aviation, but it's not so obvious when you are a designer ... When you are a company with a long tradition of designing fighters, for example.

And indeed, Dassault has set the standards in terms of agility. They had been the first to launch a purpose designed business jet with fly-by-wire controls years ago, but now they are putting the passenger first. And the first indication of that strategy came over recent years, when they at last managed to rank first in customer support in various surveys. They are equal to or even surpassed Gulfstream and Bombardier.

And that's the second major illustration of that trend, putting the passenger first. They are setting new standards in terms of cabin cross-section for purpose designed business jet. That's quite impressive, as Molly mentioned. The size of the company is quite impressive.

And they made a point of designing a proper kitchen, no longer a galley, it's a kitchen. And one of their cabin designers said something during the launch event like "The kitchen, it's like an apartment. The kitchen is the best place." So it indicates how they want passengers to live during the flight. And I think given the development cycles in this industry, I think that idea of an even bigger business jet than what Bombardier and Gulfstream are offering came years ago and possibly at EBACE's 2014 show.

So that was the time when I visited Bombardier's mock-up they were exhibiting, in the hall ... They were exhibiting the full-size mockup of the Global 7000 Cabin. And by accident, I met two Dassault executives visiting the cabin at the same time. And we met in the living room and then we visited what's ... Proper bedroom in the Global, and they made fun of a library that was including real books in the mock-up. And one of the book was erotic novels, I am serious. So I ... We laughed.

I knew these executives quite well, we laughed, but now I'm thinking that was maybe a turning point because they probably realized, joke aside, that was a proper bedroom. And they probably realized that their cabins were still lagging, were still too small. So setting new standards in terms of cabin cross section is a long effort and coming to life now and ... Well, we can expect that kind of ... The aircraft to fly quite soon. So we'll see what customers think.

Joe Anselmo:

Richard, your column is live on Aviationweek.com now, it's in next week's edition of Aviation Week magazine . In it, you say that, in launching the 10X, Dassault is correcting a disastrous mistake it made 28 years ago, and you also are fairly positive on this. You say the 10X will be “at least modestly successful.”

Richard Aboulafia:

That's right. Thanks for having me on here, Joe. You know, it's interesting to hear Thierry talk about the experience with the ... Talking with the Dassault executives about the cabin. It wasn't just the cabin, of course, it was also range. And I remember back when the G5 and Global Express emerged in the early-to-mid 1990a, and it was, of course, trans-Pacific, that was the key market. And the biggest thing they had at the time was the Falcon 900 at, I think, 4500 nautical miles, I believe. And they were asked pointedly, and they had the same dismissive response that Thierry said. I remember one of them was quoted, possibly in Aviation Week, if not, I apologize, but somewhere, saying "Well, we don't see what's wrong with having to stop in Hawaii". And it was not possible to know whether they were being serious or not.

It was like, "Well, yes, Hawaii is very nice, but that's not really what business executives are buying this range capability for." So anyway, they figured that three players would be too much for this trans-Pacific, ultra-long-range, large cabin market. They would abstain from doing the Falcon 9000, but they were basically stuck playing catch-up. The 7X, 8X, kind of caught up a decade later, and here they are catching up a decade later ... It hasn't been a happy experience, and their market share has eroded, because it's been the top of the market that has grown disproportionately faster than any other segment. We all, even the most optimistic forecasters, underrated the strength of that top segment of the market. So they're correcting that mistake. They're doing it right.

Anyone who knows this company knows they've got a unique corporate culture and amazing set of capabilities to define a product and execute on it. And I just can't see how this wouldn't be some kind of success, and possibly quite a big one.

Joe Anselmo:

So Richard, is there enough growth in the market to make room for a third competitor or do Gulfstream and Bombardier have something to lose? And if so, does one of them stand to lose more than the other?

Richard Aboulafia:

Yeah, great question. Well, on the one hand, I guess you kind of wanted me to "one-hand" it, a columnist here ... Because on the one hand ... Boy, I mean, the elasticity at the top is unlike the elasticity anywhere else, there's just ... Whatever, there's no elasticity. Whatever people were asked to pay, they paid for the very latest and best. And the market just seems to grow. Obviously for years, it was about 50 a year with the G650. And now, obviously, you've got the Global hanging in there. There's no doubt that Gulfstream will stay at least around three per month. And so you've got "three per month for them, three per month for them" ... Somehow the market keeps making room for new players.

Now it's not so optimistic, however ... The consequences have been lots of cheap, heavy metal. There have been a lot of trade-ins, no surprise, you have a lot of these folks who want the latest and best, and they keep their jet for seven or eight years. You get amazing deals. And the pain just has kept cascading down and down.

One thing that killed the Gulfstream 450 was just how cheap trade-in G550s were. One thing that damaged everything lower than the 450 was how cheap the 450 was. In other words, what used to be the high-end throughout the history of this business just has gotten more and more pressure put on it from this trading factor as you get that part of the market that simply wants the latest and best. So in other words, it's hard to avoid the image that a there's a couple of elephants partying at the top, and lots of small marsupials getting crushed by them beneath.

Joe Anselmo:

Thierry, how technologically advanced will the 10X be? Are we talking about evolutionary or revolutionary?

Thierry Dubois:

I'm tempted to say revolutionary. Seriously, if you look at the cockpit, there are two major innovations. The first one is a push button that still, I think, doesn't have a proper name, but could be some sort of auto recovery button. If you are the pilot and get disorientated, If you are caught in a difficult situation, such as a wind shear, you just push the button. And the aircraft goes back to a straight and level flight attitude, which I think is very comforting for both the pilot and the paying passenger. And this sounds really doable. It's already been certified on the helicopter ... The Airbus helicopters ... H160, certified about one year ago. So it's definitely doable for a business jet.

Another feature is ... that's always anticipating an evolution of regulation for single-pilot operations. What does that mean? It means that today, when you have to have three crew members for long flight, because some ... Because they have to rotate and have turns resting, turns in the crew rest compartment for example, you could have only two pilots, which makes things much easier in terms of organization. In terms of pilot roster, it frees up room for the passenger in the cabin to no longer have this crew rest compartment.

So this thing that's in cruise phase, you could have only one pilot awake and the other one is sleeping or least having a good rest on his seat. And what was amazing ... And during the presentation, the virtual event of the aircraft, was seeing a full recline capability for one of the two .... for the pilot seat. So you could have one pilot flying in the cruise phase and another one that's sleeping. And again, that's a likely evolution of rules over the next few years made possible by progress in automation.

Molly McMillin:

I was just going to add that, the other thing is they're going to test it to 100% sustainable aviation fuel, with that look to the future where it won't be a blend, but it would be a pure SAF. They really are doing numerous things about "Where is aviation going?" And how to add those kinds of things into the cabin already.

Joe Anselmo:

We're starting to run down our time, but I wanted to ask you, Molly, about the broader market, because you've covered some of the industry's first quarter earnings. Obviously they weren't pretty because companies had scaled back production last year amid the COVID crisis, but the future is looking brighter, isn't it?

Molly McMillin:

Well, there's been a number of first quarter calls recently with Textron and General Dynamics and Bombardier, and all of them seem to report that the order activity is stronger and heading in the right directions. Their Book-to-Bill is stronger. There's some good indications out there that things are certainly going in the right way.

Joe Anselmo:

Okay. Richard, let's put you on the spot to end this podcast. What does your forecast say? Some analysts are talking about a V-shaped rebound. Is that in your thinking?

Richard Aboulafia:

Yeah, it sure seems that way. As Molly says, there's a lot of optimism out there on the OEM side, and you look at the macro trends behind it, the one thing that's clearly characterizing this economy downturn, is that it disproportionately impacts the folks ... Frankly, the working classes. In terms of corporate profits and whatever else, and certainly stock markets, things are making a nice recovery. And it's not a geopolitical situation I'm in love with, but from the standpoint of business aircraft demand, things are fine.

You know, the only concern I've had about corporate aircraft demand, especially for the top, was that [commodity] prices were looking very soft. Obviously the notorious moment about 10 months ago, where they were paying you to put fuel in your back yard or whatever, that's all changed. Resource prices have come roaring back. And that indicator has been a pretty key driver behind top-end market health. So I think there's every reason in the world to be optimistic about a V-shaped recovery and it's very difficult to see what would derail us getting back to where we were within a matter of months.

Joe Anselmo:

Thierry, I said "I'd give Richard the last word." but actually, let's give it to you. Why don't you close us out?

Thierry Dubois:

Thank you. I'd like to pick up on Molly's point when she mentioned the possibility for the engines to run 100% on sustainable fuels, there might be a perception problem by the general audience.

So we all know ... Because we work in aviation, we know that 100% sustainable fuels is quite a positive evolution. We know that having 5% decrease in specific fuel consumption for the Rolls-Royce engines is very good engineering work. But the general audience might think that, once again, business aviation is deferring the problem to another industry, which is the fuel industry. And that's ... Always not involved in making sustainable fuels. So they are promoting them, but they have no real power in producing or actually encouraging governments to mandate their use or ... Well, anyway, the general problem might be a perception from a problem by the general audience that business aviation is not doing enough.

Joe Anselmo:

Okay. Well, on that note, we'll wrap it up. I want to thank you Molly, Thierry, Richard, for participating in this podcast. And also, this week is Aviation Week's Business Aviation Forum, so we'll certainly have a lot of people interested in hearing what you've just said. That is a wrap for this week's Check 6 podcast, now available for download on iTunes, Stitcher, Google Play, and Spotify. Special thanks to our producer in London, Guy Ferneyhough. Thank you for your time, and join us again next week for another Check 6.