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Dassault sees 44 percent reduction in profit

Dassault Aviation, a French private jet manufacturer, reported a drop of 1 billion euros in the value of its order book as clients backed away from luxury jet orders during the first half. On a good note, the company said that the market was beginning to stabilize.

Operating profits at the maker of Rafale warplanes and Falcon business jets fell by 44 percent in the first half from 114 million euros compared to 202 million euros last year. This reduced its operating margin to 8.2 percent from 13.1 percent.

Revenues fell by 10 percent and net profits fell by a significant 29 percent.

The company said that it recorded a net total of -1.13 billion euros in fresh orders during the first half of the year. The significant reduction is attributed to Falcon cancellations.

However, chief executive Charles Edelstenne says that the industry is showing signs of recovery.

“For the last few weeks, or 1 or 2 months, we have seen a stabilisation of the market and we have the feeling we have touched the bottom,” said Edelstenne in a press conference. “There was a wave of cancellations, but now there are very few of them left and we are even starting to see clients make enquiries about orders.”

He explained that the second hand market for business jets is showing signs of life, and that is a good indicator of the overall condition of the market. However, he still forecasted lower profits at the end of 2009.

A company spokesman said that they are expecting 80 Falcon deliveries for 2009, which had already seen a reduction last month.