The potential project comes hot on the heels of Dassault's designs to delivery upgraded Rafale models to the United Arab Emirates by the end of 2014 following an agreement which aims to be reached by the end of the year.

"The conversation has moved forward from buying the Rafale to how to co-develop the next generation Rafale," Defense News reported citing an anonymous defense source. "The prospective new model would meet the requirement of the United Arab Emirates and take the plane to the next level." the source said.

The talks are the first signs of a co-development initiative with a foreign partner and customer. They also pave the way for possible provision of the new F4 version model to the French air force and navy. The F-3 standard is just entering service and is due to fly until 2018 and 2020.

It remained unclear whether the talks would include a buyback of the Mirage 2000 to 2009 fleet that has been flown by the Gulf emirate.

"It remains a hypothesis among others," a French official told Defense News.

The French company Dassault Aviation is the prime contractor for the Rafale. Thales builds the electronic systems and Snemca constructs the M88 engine.

The twin-engine fighter Rafale is considered Dassault's crown jewel in France's arms exports efforts. Its manufacturer is bidding for lucrative deals in Brazil and India, making pitches also to Libya and Kuwait.

Talks over the co-development scheme center on the systems and engine that the upgraded aircraft would be equipped with.

"The main upgrades are said to be an active electronically scanned array, frontal sector optronics and an electronic warfare suite -- systems applied by Thales -- and a 9-ton-thrust M88 engine, up-rated from the 7.5-ton engine that powers the French air force and navy Rafales," Defense News reported.

An estimated 50 French executives were in Abu Dhabu last month as part of the talks, Dassault said.

"We are working flat out on negotiating the contract and ancillary contracts," an unnamed company official told Defense News. "There are, effectively, discussions between the two governments on how to finance the additional functionality."

Should the negotiations be finalized, the joint development project is expected to take years.

Dassault has neither confirmed or denied that talks on the United Arab Emirates' purchase of the Rafale planes would also include the joint development effort.

earlier related report
U.S. lawmakers slam EADS over tanker bid
Washington (UPI) May 12, 2010 - U.S. lawmakers argue it is unfair to U.S. workers that European aviation giant EADS has been allowed back into the bid for a major Air Force tanker plane contract.

A group of lawmakers from Washington state slammed the re-entry of European Aeronautic Defense and Space Co. into the bid, saying U.S. rival Boeing would have to compete against European Union subsidies.

Boeing, which has a large presence in Seattle, will be "competing against the treasuries of European governments," U.S. Sen. Patty Murray, D-Wash., said at a rally in Washington.

EADS North America, the U.S. holding company for the European aviation giant, last month announced it would bid for a $35 billion-$40 billion contract to outfit the U.S. Air Force with 179 refueling tankers.

The decision came after EADS was granted a 60-day extension on a deadline to enable the Europeans to return to the competition.

EADS had planned to bid with its U.S. partner Northrop Grumman but the Los Angeles company in March pulled out of the race, arguing the bidding conditions clearly favor U.S. rival Boeing.

EADS then requested a deadline extension so it could alter its bid or find new partners.

U.S. lawmakers from Washington are now accusing the those running the bid process of favoring the Europeans.

Sen. Maria Cantwell, D-Wash., said the U.S. government "should not have to participate" in business with a company that receives such substantial subsidies.

The Europeans are throwing their KC-45 tanker, a large plane based on the Airbus A330, in the race; Boeing is bidding with an altered version of its 767, called New Generation Tanker.

The Generation Tanker is slightly smaller and probably cheaper than the KC-45; the European plane has logged more flight testing hours and is closer to serial production, experts say.

Meanwhile, EADS is looking for additional partners to boost its bid. Companies including the United States' Raytheon and L-3 Communications, as well as Britain's BAE Systems have been mentioned.

EADS plans to submit a bid by July 8, with U.S. officials to award the contract in the fall.

The bidding war goes back several years.

The KC-45 won the contract in February 2008 but the decision was overturned four months later by the Government Accountability Office after Boeing challenged it. The GAO said it found problems with the bidding and the contract is up for grabs.

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