er, I’ve read that dassault came down to 9bn in its offer, but UAE proposed only 7.

9bn gives you, more or less, what they get for rafales they build today for the french forces, so, accepting a lesser price instead (the french orders would be delayed in the process) would reduce the cashflow they already get… not necessarily interesting for them

What does France pay per airframe? Less than the equivalent of $75 million per frame I think. I cannot understand how $9 billion for 60 frames + extras (training, ancilliary equipment etc) would not give Dassault a much, much higher profit than supplying 60 frames to AdA for less than $4 billion.

I do appreciate, though, that if production rate is 1 Rafale per month, an order for an extra 60 would require a considerable ramp up in production which may increase costs to Dassault. Even if all deliveries to French forces were stopped for 5 years, UAE would not want delivery at a rate of 1 Rafale per month.

I’ve never heard of anyone paying for something to be developed, but not getting anything back. Maybe this is the stumbling block: Dassault expects the UAE to pay for development, but is unwilling to concede any rights or share of earnings. If so, then Dassault is blowing away its chances of a sale.

I suspect that Dassault, for whatever reason, do not feel obliged to follow the normal rules. Perhaps they are right and for political and military reasons (eg Black Shaheen) UAE will finally accept their terms. The visit of Alain Juppe is their last chance, I think.

I think they are taking a high risk gamble on getting a deal giving a big, big profit rather than accepting a deal involving a more modest profit that other suppliers would accept happily. If the risk pays off, good judgement by Dassault. If it does not, they have thrown away profit they could have had.

The UAE wants Dassault to be responsible for certain upgrades while also sharing the technical details with UAE engineers. The unworkable part of the negotiations is because the UAE is pushing for transfers of IP that are not in the best interests of France.

Interesting. Do you have a source?

What is going on here? Is Dassault saying that UAE should pay the bill for the upgrades they want but Dassault should retain the IP rights to the upgrades or is that sharing details of upgrades would involve sharing other IP as well?

I don’t really understand this. If Dassault is prepared for full TOT to India in the event of being selected (presumably involving sharing a great deal of IP), why is this not possible with UAE?

Now for Dassault, their interest is to sell their products, not give them. And i don’t think they are ready to give some Rafales to UAE so Sarkozy can say “I’m the man who sold the Rafale”. Le client est roi, but up to a certain point.
It’s not like the Leclerc tanks deal, when the gov could order Giat, nationalized company, to sell their tanks even at a loss.

Nobody is asking Dassault to “give some Rafales to UAE”. By the sound of it UAE thinks the price they have been asking is ridiculous.

“Emirati officials cited the terms, specifications and price among the reasons for declaring France’s Rafale package “unworkable.” (Dassault Aviation) “Thanks to President Sarkozy, France could not have done more diplomatically or politically to secure the Rafale deal,” bin Zayed said, according to WAM, the Emirati official news agency.

“Regrettably Dassault seem unaware that all the diplomatic and political will in the world cannot overcome uncompetitive and unworkable commercial terms,” he said.”

By the sound of that, the French state has tried to help secure an order from UAE but Dassault has insisted on “uncompetitive and unworkable commercial terms”. I suspect that Dassault have been trying to exploit a political sale to the maximum (lots of extra profit beyond a “normal” profit), have misjudged and we are now seeing the result of their lack of good judgement.

A little bit from defensenews.com that seems to make sense of this mess:

“A Rafale order, however, was seen by the Emirati authorities as a political favor requested by Paris for domestic reasons.

“This is not a requirement,” a Gulf source familiar with the talks said. “It was pushed as a political purchase.”

http://www.defensenews.com/story.php?i=8271432&c=EUR&s=AIR

I won’t be surprised if UAE buys nothing now. UAE offered to do France a favour; France was unable to accept that favour, I suspect mostly because of Dassault’s lust for profit. I doubt whether Dassault are on Sarkozy’s Christmas card list this year. I read in La Tribune (I think) that Sarkozy had set himself the task of France getting Rafale exported during his presidency. Selling to a semi-captive customer who wanted to do France a favour would have been the easiest way.

One wonders what UAE’s reaction will be to a competitive Eurofighter offer if the deal was principally to do France a favour.

If UAE’s main goal is just to bring the cost down, it should choose F/A-18E, F-16E, or Gripen NG to threaten France, not Eurofighter. The MMRCA has shown that Typhoon is no less expensive than the “Ridiculous price for Rafale” declared by the Gulf source.

It is reported on this thread or another that 1 Rafale would cost UAE as much as 2 F-16’s. If that is true then Dassault is giving UAE a very special price – one that is ridiculously high.

On that basis, I think that Eurofighter can easily undercut Rafale on price and still make a reasonable profit.

I’m afraid that UAE wants something more than just bringing the cost down ~ Something that Typhoon may have upper hand……..

If this is a political order and UAE wants to send the message to France that despite very strong defence links it does not want to be treated like a French colony – where the only choice is to buy French at a price dictated to you – perhaps Typhoon is in serious contention.

They would be idiots if they believe that the Air Forces would not talk about the offers with each other. Does anybody believe that Switzerland, Brazil or the UAE have not yet called the Indian government to learn about the prices offered.

May be covered by a commercial confidentiality agreement. In any case India has probably not finished calculating / checking the price.