Airbus A3Xx

8276 Words Mar 20th, 2011 34 Pages
Contents

1. Introduction 1. Purpose And Objective Of Report 2. Background Case 1. Analyzing Airbus’ Objectives 2. Analyzing Boeing

2. Capital Structure 1. Assumption Of No Interest Payments

3. Demand Forecast 1. Key Competitive Characteristics Of the Commercial Jet Aircraft Industry 2. Boeing’s Response 3. Forecasting Demand In The Very Large Aircraft (VLA) Market

4. Net Present Value Analysis 1. Data Given and Assumptions Made 1. Financial Data Given 2. Assumptions On The NPV Calculation 3. Assumptions On The Rates Of Return 2. Base Case Calculation 3. Conclusions Of NPV Analysis

5. Breakeven Analysis 1. Breakeven Quantity 2. Conclusions Of
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2. Background Case

1. Analyzing Airbus’ Objectives

Airbus had a reputation for innovative design and technology. All Airbus planes employed “fly-by-wire” technology that substituted computerized control for mechanical linkages between the pilot and the aircraft’s control surfaces. This technology combined with a common cockpit design permitted “cross crew qualification” (CCQ) whereby pilots were certified to fly similar aircrafts, thus offering flexible scheduling in flight crews on various models, leading to better pilot utilization and lower training costs. These features helped explain why Airbus had received over half of the total large aircraft orders for the first time in 1999. However, despite the gains in market share, Airbus still did not have a product to compete with the monopoly of Boeing’s 747 in the VLA market.

This comprises the main reason why Airbus is interested in building the A3XX. It attempts to create a dominant design that the market for large planes may pledge allegiance to, moving from simply product innovations to process improvements for the VLA. It does intend to just replicate the 747s and achieve a jumbo jet with the same capabilities. Rather, it aims to increase the seating capacity and reduce costs for the operators by so much more than what Boeing’s alleged monopoly holds, with the objective of seizing the market

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