@ spitfire9:

when the deal for the rafale was made initially, it was cold war, and the market for french aircraft was quite significant (if anything, the french forces were supposed to buy a higher number of airframes, which, by itself would have reduced the costs per airframe), and many nations had sufficintly high defense budgets to afford a good number of airframes.

that is the situation in which dassault had agreed with the french state over the deal

then came 1989 and the end of the cold war. the defence budgets shrinked to ridiculously low levels compared to what they previously were, and, as a result, orders were reduced/delayed, and the potential markets did the same.

Good point – the market became smaller than Dassault reasonably estimated it would be. But if market conditions change, you have to adjust your plans to the new situation.

now dassault has, as I said in a previous post, something like 7bn dollars to recover and it can’t expect to sell 2-300 airframes on top of french orders like with the mirage 2000. as a result, they have to make that money with lesser aircraft, and that gives a higher price per airframe. it’s not considering customers as idiots, as they’ll have to pay similar amount or higher for any new airframe.

If you are right and other manufacturers would charge a similar price for a similar product then Dassault is still competitive price-wise. You had better hope that if Eurofighter quote their best price, it is not significantly lower than what Dassault are asking.

147 millions is the overall price when you divide what the french government will have paid when all the airframes will have been bought. the customer should pay dassault only for the part of development investment that dassault made, not the part already paid by the french govenment

I think you are completely correct in what you say. If I pay an engineer 1 million dollars to design something for me, he is mad if he gets an enquiry and increases his price to the potential customer so he can recover the design cost already paid by me – and put it in his own pocket.

and i fthey sell it too low, they’ll have to sell an unsellable number of airframes to get the money back. at 150 million apiece, they’d need to sell about 90-100 airframes in export to get their investment back, which may be reached between the few potential customers. put the price at 117 million (UAEs offer) and you have to sell something like 180-200 airframes to break even… where will they sell them?

They won’t sell them at 150 million a piece if the buyer knows they have been sold at 75 million a piece to another customer. Buyers don’t like to be treated like idiots. It is inevitably the role of the buyer to help repay your investment in R&D via higher prices since R&D is not free but not if you try to recover it on an unrealistically low number of frames.

besides, we can talk all we want, the typhoon, with most of the features besides the a2a unfinanced yet can’t get even close to that price (somebody will have to pay for the developments, and the europeans are broke… so, what do you think? how many billions will UAE spend just for the development of the typhoon so that it reaches their level of expectations before buying a single airframe?

You say the Europeans are broke. Having already spent perhaps 30 billion euros on design, development and production of 300 Typhoons, are you seriously suggesting they cannot afford 1 more billion to integrate all A2G products available for Typhoon?

The profit goes to the producer and the development cost will be payed by the tax-payer as everywhere. 😉

I agree. If the USA wants an aircraft for its forces, it expects its own people to pay for it, not foreigners through some enormous extra charge on exports of that aircraft.

Before Dassault spent 2-3 billion euros of their own on Rafale they should have looked at the world market for the aircraft over its selling lifetime (say, 15+ years) and priced their product accordingly. If they are hoping to recover their investment on 100 or so export sales, that shows rather feeble business skills as well as a surprising lack of faith in their product.

Keep in mind that in addition to the price the french pay there was 75% of the development price, and that Dassault financed 25% of the cost of development which it still has to recoup with export sales. It can’t accept to sell for less that what they sell to the AdlA, or MN, knowing that those actually financed 75% of the development.

I understand that Dassault needs to charge extra to recover development costs financed by themselves. Airbus and Boeing do that. I believe before launching development of an aircraft they estimate costs and spread those costs over a number of aircraft and increase the price accordingly on that number of aircraft. Let’s say 500 to break even for A320 and 1000 for 787.

In the case of retrieving their own development costs, I wonder what number of frames Dassault is basing that on. Let’s say 400 frames (sales to French forces + exports). They must be retrieving development costs from their launch customer with each aircraft built so I don’t understand the need to treat export customers differently to the French state in terms of recovering their own development costs (25% of total). I can understand Dassault having to charge extra on each export sale to pay something to the French government since the French government paid 75% of Rafale development costs.

I’m not an accountant but I hope you see what I am saying.