Dassault Aviation to build new $47 million business jet after scrapping Falcon 5X

By Tim Hepher

LE BOURGET, France (Reuters) - Dassault Aviation announced plans for a new long-range business jet on Wednesday, renewing a battle with Gulfstream at the top end of the market as demand for the ultimate status symbol recovers from a prolonged recession.

The new Falcon 6X plane will be able to fly from London to Los Angeles and will enter service in 2022, Chief Executive Eric Trappier told journalists at a business aerodrome outside Paris.

"It will feature the most spacious cabin in the long-range segment," Trappier said in a vast showroom for prestige jets, adding that it would sell for $47 million.

Dassault launched the plane two months after scrapping its large-cabin Falcon 5X model, citing a three-year delay in the Silvercrest engine developed by Safran.

The aircraft announced on Wednesday will instead be powered by PW800 engines from Pratt & Whitney Canada.

It will have the same fuselage cross-section as the Falcon 5X and will fly 5,500 nautical miles (10,200 km), Dassault said.

That is slightly further than the abandoned model which had been due to fly 5,200 nautical miles, or from Riyadh to Tokyo.

COMPENSATION CLAIM

The unusual decision to cancel the French competitor to large-cabin Gulfstream jets from the United States has left a cloud over relations between Safran and Dassault - key partners on French military projects such as the Rafale fighter plane.

Dassault said it is in talks with Safran over claims for compensation over the delays - discussions that two people involved in the process described as "tense," even though the two companies continue to work on other day-to-day projects.

Trappier said Dassault faces an unspecified loss of earnings in the short term over the decision to shut the Falcon 5X.

Safran Aircraft Engines Chief Executive Oliver Andries said

on Tuesday there had been problems in getting the high-pressure compressor - the nucleus of a jet engine which increases the pressure of air before it reaches the combustor - to operate throughout the flight 'envelope' required by Dassault.

Addressing this would have required fresh work and delays for the 5X programme. Safran says it is now working to optimise the engine for Textron's Cessna Citation Hemisphere, the sole remaining Silvercrest customer.

ENGINE STRATEGY

Safran earns most of its income from a four-decade-old joint venture with General Electric for airliner engines. GE is responsible for the hottest components like the high-pressure compressor, while Safran produces colder components.

Trappier said Silvercrest had been strategically important for Safran as it seeks to demonstrate mastery of the whole design of the latest generation of highly efficient engines, while penetrating a new market for business aviation.

The destiny of the two companies has long overlapped after France opted to develop its own independent Dassault-built Rafale fighter in the 1980s, partly in order to guarantee high-value work for its state-owned engine maker, then called Snecma.

A source close to part-privatised Safran denied it had seen Silvercrest as a strategy to amass know-how, saying it had produced the SaM146 for Russia and combat engines for Dassault.

For his part, Trappier dismissed suggestions that Dassault had cooled to the Falcon 5X, saying the plane had not had any significant problems in flight tests besides the engine delays.

The Falcon 6X will compete in the large-cabin, long-range segment against the Gulfstream G500, which is nearing the end of flight testing, as well as the older Bombardier Global 5000.Sales of business jets halved from their peak of 1,317 in 2008 as the financial crisis beckoned to 661 in 2016, according the U.S.-based General Aviation Manufacturers Association, but Trappier said last month there were signs at last of a recovery.

(Reporting by Tim Hepher; Editing by Sudip Kar-Gupta and Elaine Hardcastle)