(News Bulletin 247) – Indian press reports have reported that the Indian Ministry of Defense has approved an order for 26 Rafale fighter jets. An official announcement could come during Prime Minister Narendra Modi’s visit to France in a few days.

As often the Dassault Aviation action twirls according to information and rumors surrounding the orders of the aircraft manufacturer’s fighter, the Rafale.

If necessary this Tuesday, the Dassault Aviation title taking 2.3% to 184.3 euros around 10 a.m., after having recorded a peak at 3.8%. The technology and defense group Thales, whose equipment represents between 20% and 25% of the value of the fighter plane, gains 1.8% while Safran, engine manufacturer of the device, sells 0.4% .

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According to several Indian media, including the Ani news agency, quoted by Reuters, the Indian Minister of Defense has given the green light to an order for 26 Rafales for the Indian Navy, as well as three Scorpene submarines.

This operation still needs to be validated by the defense procurement board, a body responsible for procurement, as well as by the government cabinet, adds Ani. According to the agency, an official announcement should come during Indian Prime Minister Narendra Modi’s diplomatic visit to France. The latter is the guest of honor at the July 14 celebrations and will arrive in France on Thursday and is due to have dinner on Friday with the President of the Republic, Emmanuel Macron.

BFMBusiness.com had already mentioned last week the possibility that this order for 26 Rafales will be signed during the July 14 celebrations.

Contacted by News Bulletin 247, spokespersons for Dassault Aviation were not immediately available to comment.

A decision that would be “logical”

“The press information is positive because it gives credibility to an order for 26 planes which would represent an amount of 4 billion euros and which was not integrated into the analysts’ models”, estimates a financial intermediary. “It would be a very good contract, which underlines the visibility that the Rafale can have, and reminds us that the Dassault Aviation share is undervalued”, he continues.

This new order, if confirmed, would be added to the first “off the shelf” (i.e. planes manufactured in France) which had been placed in 2016 by India with the aircraft manufacturer for a total of 36 Rafale.

At the beginning of the year, the CEO of Dassault Aviation, Eric Trappier, explained that choosing his aircraft would be a rational decision on the part of the Indian government. “It would be quite interesting and logical because already having Rafales with the Indian Air Force, having the same plane at the train for the Navy would be wise”, he developed.

At the end of 2022, Dassault Aviation’s order book for the Rafale stood at 164 units, with 39 aircraft for France and 125 for export. The aircraft manufacturer plans to deliver 15 this year, 14 to France and one to Greece.

New orders could possibly allow Dassault Aviation to extend a higher production rate over time, while the group is currently carrying out a tense ramp-up. Like all aircraft manufacturers, Dassault Aviation is facing difficulties on its production line.

“The aftermath of COVID and the shortage issues linked to the war in Ukraine have put constraints on many logistics and supply chains, so our supply chain is in difficulty”, underlined Eric Trappier in March. Dassault Aviation plans to increase to a production rate of three Rafales per month.

Other potentially interested countries

In terms of orders, other prospects may obviously still exist for the Rafale.

Colombia had pre-selected the fighter plane for a potential order of 16 copies but the two parties could not agree before the end of 2022. It remains to be seen whether this will be postponed for this year.

Indonesia, it could activate the balance of its order for 42 planes since Dassault Aviation has so far only obtained a first firm contract for six planes. Other countries are mentioned by the specialized press, notably Iraq or Serbia.

Dassault Aviation will publish its half-year results on July 20, after market close. The group should then give indications on the state of demand in its other major business, namely business aviation with its Falcon range. On this point, Morgan Stanley was cautious in a recent note. “After a strong recovery from the pandemic, demand for business jets appears to be weakening as economic risks increase,” the bank wrote.