Why did the Mercure fail?

Question

The Dassault Mercure was a French regional jet that first flew in 1971 and received its type certificate in February 1974; it resembled an enlarged, shorter-range 737-200, and was designed to serve higher-capacity short-haul routes. The Mercure was an abysmal failure, with only eleven aircraft ever sold, all to French domestic carrier Air Inter. Wikipedia states, citing Dassault’s own website, that the killer was its short range, only 2,080 km (1,125 nmi) with a typical payload, and reducing to 1,700 km (920 nmi) at maximum capacity.

Except... that doesn’t actually explain the Mercure’s failure to sell!

Sure, it didn’t have the range for long transcontinental or transoceanic crossings, but you don’t need that much range to be successful as an airliner, as evidenced by the profits made by regional-jet manufacturers. The Mercure’s Wikipedia article - citing Dassault - admits as much, even as it makes the claim that the aircraft was doomed by its short range:

This lack of interest was due to several factors, including the devaluation of the dollar and the oil crisis of the 1970s, but mainly because of the Mercure's operating range – suitable for domestic European operations but unable to sustain longer routes; at maximum payload, the aircraft's range was only 1,700 km. [emphasis added]

1,700 km is plenty of range for European routes, and there are numerous other markets for high-capacity, short-range aircraft. Japan, land of the 747 regional jet, comes immediately to mind, along with the other dense areas of East, Southeast, and South Asia and the Middle East. Even infamously-spread-out North America should have been fertile ground, what with the multitudes of short routes (and even not-so-short ones; the Mercure would have had enough range to comfortably fly between New York and Chicago in a typical passenger configuration, although not in all-up sardine mode) in the northeastern and midwestern United States, eastern Canada, parts of the South, the West Coast, and the Caribbean. As a point of comparison, the earlier Sud Caravelle - the fourth jetliner to enter revenue service,¹ and the first-ever regional jet - had an even shorter range (1,700 km was its maximum range), and it was riotously successful, to the tune of 282 aircraft (some of the very last of these, ironically, going to Air Inter at the very same time they were contemplating the Mercure), despite also having a smaller passenger capacity.

What am I missing? Why wasn’t the Dassault Mercure successful in the short-haul market?

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¹: Preceded by the Comet, the Tu-104, and the 707, in that order.

Answer 1

The engineers ran loose with it

You wrote:

The Mercure's Wikipedia article - citing Dassault - admits as much, even as it makes the claim that the aircraft was doomed by its short range

That is correct, but the statement needs unpacking. After scouring literature on the Mercure, its failure is relegated to literally footnotes. Maybe there're more details in French.

The Mercure was superbly engineered (which delayed the entry into service -- a late comer to the scene). Superbly. I mean on par with the L-1011 (what good did that do to it). Lockheed was the driving force behind for example the IDG, and the Mercure was of the first adopters right behind the L-1011.

Cornered mission

Over engineering every aspect of the plane, pushes it into a corner -- a refined mission, resulting in an unflexible product. That is the Mercure in a nutshell. While the competition cruised at 30,000 feet and Mach 0.74, the Mercure's tailored cruise was Mach 0.81–0.85 at 20,000 feet. Read that again. That's a TAS of 500–520 knots -- a fast widebody nowadays does 480 knots.^[a]

Consequently, the wing is thin (helped by superb high-lift engineering at slow speeds); the wing being thin means the fuel volume is limited for range flexibility, more so for its 160 passengers -- that's way too many passengers for this niche market segment (half-empty flights are unprofitable) -- compare with that era's best-selling European short-hauler jet, the Fokker F28 with a one-class seating of 65–85.

Market/marketing people always compromise the engineering, but like it or not, it is they that sell planes.

The Dassault Mercure is a compelling example of the inverse, in which engineering triumphed over business considerations. With a single-minded focus on optimizing very short range performance, option value was systematically stripped from the plane along with any possibility of extending its range, weight, or fuel capacity. Twelve were sold. To a less extreme extent, the BAC 1-11 was also a good plane but a poor platform.

Leonard, Jonathan S., and Adam Pilarski. "Overwhelmed by success: What Killed Douglas Aircraft." (2018). (PDF)

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a: Our resident aerodynamicists can comment on such speed in thicker atmosphere, but I'll resort to a comparative analysis with two planes that used the same engine and thrust rating:

Plane	Seats	Cruise Mach	Fuel (kg)	Range (km)	Fuel/km	Fuel/km/pax	vs Mercure (%)
Mercure	162	0.813	15,456	2,084	7.42	0.046
DC-9-51	135	0.760	11,181	2,400	4.66	0.036	78%
737-200	120[b]	0.745	18,980	4,800	3.95	0.033	72%

Data sources: Wikipedia and SKYbrary

b: 1-class seating is 130, but the range value assumes 120

Answer 2

Mainly because the short haul market needed to wait for the deregulation of the late 70s into the early 80s that resulted in the creation, by the early 90s, of the hub and spoke concept with small regional jets feeding hubs where the mainliners were.

The CRJ200 was the main pioneer of this market, as an up to date rendition of a smaller regional feeder jet. At the time it was expected to sell maybe a couple hundred units, even within Canadair.