The Impact of the A380 Project on the Financial Performance of EADS

16541 WordsNov 24, 201367 Pages
Acknowledgements We would like to express our gratitude to the department for affording us the time and research facilities without which this report would not have been possible. Special thanks go to the head of department Dr. Anders Hederstierna, our supervisor Dr. Britt Aronsson and the course coordinator Dr. Klaus Solberg. Abstract Airbus has been making headlines in the past few months for all the wrong reasons. This iconic European corporation has undergone a turbulent period due to the problems surrounding the Airbus A380 project. A new flagship product that should have curved out an unassailable advantage for Airbus over Boeing went completely wrong. The…show more content…
The two form a duopoly with market leadership in the sector largely rotating between these two corporate giants depending on the market dynamics. Commercial airlines and other air transport operators form the bulk of the customers. Governments are also important customers. The government involvement in the sector extends to investing, supporting (Aboulafia, Richard, 2000; O’Neal, Michael, 1990) and regulating. Any problems in the industry have implications that go well beyond the confines of the affected companies. Governments therefore subsidize and invest in aircraft manufacturing and research and development. This also serves to protect the highly skilled jobs in this sector and ensures that the respective countries remain technologically competitive (Wall, R. & Sparaco, P, 2007). Big companies play an important role in the economics of the countries they operate in. They influence the conditions in the industries and directly impact employment rate in the countries where the manufacturing takes place. EADS and Boeing are the leading competitors in the aircraft manufacturing industry and demonstrate the high level of political interest in this sector and the way governments try to influence the business decisions made by such corporations (Wall, Robert & Jens, Flottau 2007; Barrie, Douglas 2007). 1.1 Problem
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