Dassault to axe and relaunch Falcon 5X jet after engine delays

(Adds Textron comment)

By Cyril Altmeyer and Tim Hepher

PARIS, Dec 13 (Reuters) - Dassault Aviation SA said on Wednesday it was scrapping development of its Falcon 5X business jet due to delays and technical problems with its French-supplied engines and pledged to launch a new model powered by a rival Canadian supplier.

The decision comes after repeated difficulties for the Silvercrest engine developed by France's Safran SA and forces some tweaking of plans by Dassault to refresh its fleet in the face of rising business-jet competition.

The French planemaker noted that Safran had recently disclosed an additional delay and new performance shortfall in the Silvercrest development, making the 2020 entry into service of the aircraft impossible.

The unnamed new aircraft will appear in 2022 and will be powered by engines from Pratt & Whitney Canada, a subsidiary of U.S.-based United Technologies Corp.

"Considering the magnitude of the risks involved both on the technical and schedule aspects of the Silvercrest program, Dassault Aviation initiates the termination process of the Silvercrest contract," Dassault said in a statement.

Safran said it planned no further provisions after taking a 654 million euros ($720 million) non-cash charge for the delays early last year.

Dassault said there was still a strong market need for a new long-range aircraft with a large cabin.

"I have decided to launch a new Falcon project powered by Pratt & Whitney Canada engines, featuring the same cross section as the Falcon 5X," Dassault Chief Executive Eric Trappier said.

Data from tracking website Flightradar24.com showed the first Falcon 5X, which made its maiden flight in July using prototype Silvercrest engines, last took to the skies on Dec. 6, ending at Dassault's factory near Bordeaux, France.

Dassault has been banking on three models to renew its portfolio: the Falcon 8X which entered service in October 2016, a second jet due to be defined at the end of this year and now the replacement of the Falcon 5X, which is due out in 2022.

Safran Chief Executive Philippe Petitcolin said in October it was not possible to estimate a certification date for the Silvercrest engine after the latest glitch, but said it was a question of months rather than weeks.

Dassault nonetheless appears to have taken that as a cue to drop the Silvercrest engine, following worries expressed by its clients and the cancellation of 12 orders in 2016.

Safran said in a statement that Dassault had indicated it did not share Safran's analysis of the engine programme.

Safran reaffirmed financial targets for 2017. Analysts say the Falcon 5X was not seen as a major contributor to revenues.

Any penalties are covered by existing provisions, it added.

Dassault's decision leaves a new jet powered by Textron's Cessna as the only platform for the Silvercrest motor.

On Wednesday, a Textron spokeswoman said the planemaker remains committed to Safran's Silvercrest engine.

The latest Silvercrest status "does not significantly impact engine deliveries" for the Hemisphere program, she said, adding that Textron "will continue to stay closely aligned on their progress and how it may affect the Hemisphere's development timeline."

Textron picked the Silvercrest for its Citation Hemisphere in November last year. (Reporting by Maya Nikolaeva; additional reporting by Mike Stone in Washington DC; Editing by David Evans and Jonathan Oatis)