irbus A380 caseAirbus: The Launch of the A380 Airbus Industries is the world’s second largest aircraft manufacturer behind its main archrival, the US company Boeing. Competition between Airbus and Boeing is among the most intense head to head battles in global business today. From its inception, Airbus was beset by complications and difficulties in the areas of global trade, regional politics, operations management, organization structure and ownership, and labor relations. Notwithstanding these persistent challenges, it has grown to become a formidable industry leader in what might be considered a relatively short period of time. The A380 jumbo passenger jet, the largest in the world at the time of its launch, had, as the Wall Street Journal indicated, “a bumpy ride” from its conception in the mid 1980s to its commercial launch in 2007. This case provides the background to the process that Airbus went through bringing the A380 to market. Origin of Airbus Airbus was formed in 1970 as a consortium of European manufacturers. As described in one history of the company: “The founding consortium members were Aérospatiale of France and Deutsche Airbus (later renamed Daimler-Benz Aerospace Airbus, with 65 percent MesserschmittBölkowBlohm and 35 percent VFW-Fokker) of West Germany. Construcciones Aeronauticas S.A. (CASA) of Spain joined in 1971. As the catalyst of the group, Airbus Industrie provided research, development, and design as well as marketing and product support to its affiliates. Member companies, in turn, would procure, manufacture, and assemble components. For example, Deutsche Airbus manufactured most of the fuselages and vertical tails, CASA contributed horizontal tails, and Britain's Hawker-Siddeley (a subcontractor until 1979) made the wings. These parts were transported to Aérospatiale's assembly facilities in Toulouse where they were assembled with cockpits and center fuselages manufactured there.” (http://www.fundinguniverse.com/companyhistories/GIE-Airbus-Industrie-Company-History.html) In its early days Airbus primarily operated under French executive leadership, but this changed in 1985 when French, German, and British leaders were hired as CEO, COO, and CFO, respectively. Airbus was reorganized as a joint stock company in 2000, owned 80% by EADS and 20% by BAE Systems. BAE sold its stake to EADS in 2006 in a highly politicized transaction characterized by significant high level turmoil in the company.
This material was modified by Professor Julie Yao Cooper from a case developed by Professor Rob Anthony for the purpose of classroom discussion and case analysis at Hult International Business School. © 2012
The A380 Project The A380 project was conceived during the 1990’s as a way for Airbus to compete with the Boeing 747 in the then increasingly important super-jumbo jet category (see Exhibit 1 for timeline). The highly ambitious project has ended up to be what must be considered a technical and commercial success, but its history was also characterized by substantial challenges in each of these areas. As described by Wikipedia (http://en.wikipedia.org/wiki/Airbus): “In mid-1988 a group of Airbus engineers led by Jean Roeder began working in secret on the development of an ultra-high-capacity airliner (UHCA), both to complete its own range of products and to break the dominance that Boeing had enjoyed in this market segment since the early 1970s with its 747. The project was announced at the 1990 Farnborough Air Show, with the stated goal of 15% lower operating costs than the 747400. Airbus organised four teams of designers, one from each of its partners (Aérospatiale, DaimlerChrysler Aerospace, British Aerospace, CASA) to propose new technologies for its future aircraft designs. In June 1994 Airbus began developing its own very large airliner, then designated as A3XX. Airbus considered several designs, including an odd side-by-side combination of two fuselages from the Airbus A340, which was...
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