The problem is positioning. The Rafale is finding itself squeezed on three fronts.
[1] Many nations do not have the funding or the need for an "omni-role fighter" aircraft in the $60+ million range, and are explicitly purchasing light fighters like Lockheed's F-16 (Greece, also Turkey, and many others), Saab/BAE's JAS-39 Gripen (Sweden, Czech Republic, Hungary, South Africa), and Dassault's own Mirage 2000 instead (Taiwan, UAE, possibly India) in the $20-30 million range - or buying used. For instance, Thailand got Singapore's older F-16A aircraft when Singapore upgraded to a newer model of F-16. Richard Aboulafia, of the Teal Group, has some harder stats on this.
Singapore, with its long sea lanes and wide potential area of operation, had a different set of requirements, and an immediate need to replace their ancient A-4SU Skyhawks. To put that need in perspective, Sen. John McCain was flying an A-4 Skyhawk when he was shot down over North Vietnam.
[2] Among advanced militaries, the F-35 Joint Strike Fighter appears poised to become the next F-16. Decisions like MBDA's announcement that they would adapt their Meteor long-range air-air missile for the F-35 reflect a growing acknowledgement of that reality.
The Joint Strike Fighter is an affordable 5th Generation aircraft, with a wide base of international participants (USA, Australia, Britain, Canada, Denmark, Israel, Italy, Netherlands, Norway, Turkey) and improved capabilities. As the program moves closer to completion, analysts expect its influence on procurement decisions will grow stronger and induce many countries to wait instead.
[3] Meanwhile, both the Russian SU-27/30 family (Russia, China, India, Malaysia, Vietnam, et. al.), and the EADS Eurofighter (Austria, Britain, Italy, Germany, Spain) offer stiff competition and loyal customer bases in the realm of 4th generation aircraft. The F-15 Strike Eagle is also emerging as a strong export competitor in this realm (USA, Israel, Korea, Singapore), which is particularly bad news for Dassault given its compatibility with widely-used American munitions, targeting pods, communications systems, etc.
As DID has noted before, Singapore's quality military, leading-edge doctrine, and smart procurement decisions have made them an influential bellwether customer whose military decisions are seen as a meaningful endorsement in Asia and beyond. Had they selected Dassault's Rafale over Boeing, it could well have opened doors for that aircraft elsewhere. Instead, the Rafale's export mission just got tougher. Dassault's bravado concerning global fighter trends and opportunities notwithstanding.
Indeed, continued failure to secure export orders could have real blowback effects into the Rafale program for France.
The Rafale program was always dependent on some level of foreign orders to help finance its ongoing modernization and upgrade plans. If that option continues to fail, France's budget constraints could leave the Rafale falling steadily behind even its 4th Generation peers, in a vicious spiral that further crimps export opportunities.
Back when France was still part of the Eurofighter consortium, their rigid insistence on their own specifications and on deciding all work-sharing unilaterally forced a parting of the ways. While French requirements really were quite specific, the decision has thus far proven to be a very expensive one.
