MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 1 Source:
http://img.airliners.de/2009/12/emirates Source:
http://www.airbus.com
Slide 2
Muytoy Nancy Izquierdo Alfonso Wenzler Jrgen CASE AIRBUS A380
BUILDING THE WORLDS LARGEST COMMERCIAL AIRCRAFT MBA IM 2015 Project
Management
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 3 AGENDA 1. Historical background of
the Airbus Company 2. Airbus competitor Boeing 3. Diagnosis of the
project business plan and future prognosis 4.The project execution
5.Airbus and the A380 today 6.Future competitiveness of Airbus
7.Conclusion 8.Discussion
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 4 Airbus Industries began as a
consortium of European aviation firms to compete with American
companies such as Boeing, McDonnell Douglas, and Lockheed in 1970
British (20%), France (37.9%), Germany (37.9%), Spain (4.2%)
Headquarter: Toulouse, France In 2000 Airbus made the transition
from a consortium to a fully functioning private entity 1.
Historical background of the Airbus Company (1)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 5 1. Historical background of the
Airbus Company (2)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 6 1. Historical background of the
Airbus Company (3)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 7 1. Historical background of the
Airbus Company (4)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 8 Found in the year 1916 in the Puget
Sound region of Washington state Market leader in the industry of
military and commercial aircraft manufacturing Customer base and
support in 150 countries Employee strength of 165.000 around the
globe More than 12.000 commercial jetliner engaged in aviations
services The commercial jetliner (SBU) total revenue earned during
the period in 2013 stands at 52.9 bn USD 2. Airbus competitor
Boeing (1) Company Profile of
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 9 Commercial Aircraft Product Line 2.
Airbus competitor Boeing (2)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 10 Evolution Competition Airbus -
Boeing 2. Airbus Competitor Boeing (3)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 11 2. Airbus competitor Boeing
(4)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 12 Managing New Product Development
and Supply Chain Risks: The Boeing 787 Dreamliner Case 2. Airbus
Competitor Boeing (5)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 13 2. Airbus Competitor Boeing
(6)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 14 Dreamliner Outcome 2. Airbus
competitor Boeing (7)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 15 2. Airbus competitor Boeing (8)
NTCP-Analysis
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 16 Traditional Supply Chain Lesson 1:
Assemble a management team with requisite expertise Dreamliner
Supply Chain 2. Airbus competitor Boeing (9)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 17 Lesson 2: Supply chain visibility
should be improved to ensure issues are addressed on time Lesson 3:
Cost estimation of a project should follow a full understanding of
all the underlying costs Lesson 4: Improve Tier-1 supplier training
and selection process 2. Airbus competitor Boeing (10) $7.3 billion
Estimated costs (conventional outsourcing) $4.2 billion Estimated
costs (new outsourcing model) $15 billion Actual costs
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 18 3.Diagnosis of the project business
plan and future prognosis (1) 3.1The Airbus A3XX: 1990: why not a
super jumbo? Basic design finalized in 1999 passenger & cargo
models 550 Passengers (VLA) Could cover the same routes of the
Boing 747 + extended Full passenger decks and a third deck capable
of accomodation baggage, cargo, and/or passenger amenities
(cocktail lounge, exercise room and showers)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 19 3.Diagnosis of the project business
plan and future prognosis (2) 3.1The Airbus A3XX: More space per
seat and wider aisles attract passengers Same fly-by-wire tech,
flight deck design & performance characteristics (Airbus
family) Higher list price than 747, but increased capacity and
reduced costs Operating cost +12% but +35% capacity Planes size
complications
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 20 3.Diagnosis of the project business
plan and future prognosis (3) 3.2The diagnosis: List price of $216
million Cost of development: $13 billion Funding: $3.5 billion from
vendors $3.6 billion of launch aid from the partners national
governments $5.9 billion Airbus partners
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 21 3.Diagnosis of the project business
plan and future prognosis (4) Was there sufficient long-term demand
to justify industrial launch? 9.0 Domestic USA (25.7 %) Europe USA
(13.0) Intra Europe (7.0) Asia USA (6.6) Europe Asia (4.6) Domestic
Europe (2.9) Africa Europe (2.7) Domestic P.R. China (2.1) Intra
Asia (2.1) Domestic Japan (2.1) USA Central America (2.0) South
America Europe (2.0) USA South America (1.7) Canada Europe (1.5)
Europe Pacific (1.5) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Avg.
Annual RPK Growth (%) 1999 - 2019 Airbus Industrie 1999 Global
Market Forecast Average Annual RPK Growth (%) (1999 2019)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 22 3.3Project expectations: Delivery
starting in 2006 Hope to secure 50 jets as many as 5 major
airlines. When it reached full production capacity (4 planes/month)
in 2008 price $225 million & operating margins 15-20% Effective
tax rate = 38% (French rate including social contribution)
3.Diagnosis of the project business plan and future prognosis
(5)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 23 3.3Project expectations: Annual
growth rate of 4.9 % (passenger traffic) Annual demand for new
aircraft of each 10,000 passengers routes linking almost 2.000
airports Forecast demand: 14.661 new passenger aircraft and 703 new
freighters over the 20-year period through 2019 727 new aircraft
seating from 400 to 500 passengers 1550 new aircraft seating +500
passengers Sales = $350 billion Finantial success & aviation
industry leader Approx. costs of $13 billion (not consider $700
million that would have been expended in 2000) 3.Diagnosis of the
project business plan and future prognosis (6)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 24 4. The project execution (1)
Example of an Aerospace Project Network (Multiple Intersecting
Iterative Loops)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 25 4. The project execution (2)
4.1General data of the project: 1.19. Dec. 2000 - voted to launch a
$13 billion programm to build the A3XX A380 2.Early 2001: The
aircraft configuration was finalised 3.23. Jan. 2002: Manuf. the
1st wing box component 4.The development cost had grown $3 billion
when the first aircraft was completed 5.First flight: 27. April
2005 6.It entered commercial service: October 2007 7.200 orders up
to the year 2009 8.Committed customers cost reductions (fuel)
Source: Singapore Airlines
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 26 4. The project execution (3)
4.2Complications: 1.At the beginning of the project: The planes
size, noise, emissions, turnaround time, taxiway movements,
evacuation 2.2005: ICAO Separation row (heavy aircrafts) 3.3 delays
announced in 1.5 years 4.MAIN Causes: a)Electrical systems and
structure (complex cabin wiring) b)Use of different engineering
methods at different Airbus sites wiring incorrectly design to
manufacture c)Late weight reduction design changes 5.2006: change
of Airbus CEO & program director 6.2006: spend $2 billion more
than the budget 7.2010: Qantas Flight 32 uncontained engine
failure
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 27 4. The project execution (4) 4.3
The main failure: Fall 2006: assembly stage in Toulouse (France)
Preassembled wiring harness produced in Hamburg failed to fit in
the airframe Design software incompatible (CATIA ) Consequences:
Ability to share design specifications between the 2 plants was
compromised Hundreds of miles of cabin wiring failed to fit
Postpone deliveries for 2 years & redesign the wiring system
Cost expected to exceed $6 billion When the delay was announced,
the stock lost 1/3 of its value June 2008: Copresident accused
(sell stock before make public)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 28 5. Airbus and the A380 today (1)
5.1 Restructuring-program power8+ (2007-2014): Preparation to stay
competitive in future No double production structures Reduction of
10.000 workplaces Intended sale of plants in France and Germany
Intended cost reduction: 2,1 billion p.a. from 2010 (create free
cash flow) Engineering sector: intended cost reduction 15%
Administration sector: intended cost reduction 30% (until 2010)
e.g. by reduction amount of suppliers Predominant success (targets
2010 were beaten) Ability to compete was achieved due to power8+
But: factories could not be sold (Premium Aerotec)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 29 5.2 Actual situation and focus:
Currently ca. 69.300 employees (Boeing: 165.000) Sales: 42 billion
p.a. (Boeing: 41 billion) EBIT 1.8 % p.a. (Boeing: 1,71 %) 2009:
Airbus Military was founded In August 2013 the 8.000th aircraft (A
320) was delivered to Malaysian Air Asia (Boeing: more than 12.000)
Technical problems (2014: material fatigue wings; 2013: fractures
in the body; 2012: hairlines in the wings) but BOEING also has
problems with the Dreamliner 787 EADS: loss of order for 42
aircrafts for the Indian SpiceJet in 03/2014) (Boeing 737 Max, $4.4
billion) 5. Airbus and the A380 today (2)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 30 5.2 Actual situation and focus:
Airbus A350XWB: set to redefine the standards of tomorrow, 4 flying
test aircrafts Capacity for the best-selling single aisle aircraft
A320neo-Family shall raise from currently 42/month to 46/month in
Q2/2016 Currently 60 % market share for A320neo-Family (2.610
orders) Strategy of strengthening the star to stay competitive
Demand on civil aircrafts until 2030: In Feb. 2014 the ACJ319
Elegance was shown at Abu Dhabi show (aircraft for VVIP) Strategy
of diversification 5. Airbus and the A380 today (3)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 31 6.1 Short-term future: Development
of capacities Global interobility: Airbus and Commercial Aircraft
of China (COMAC) Memorandum of Understanding (Feb. 2014) Increasing
share from 20 to 25 % of an joint-venture: Arbin Hafei Airbus
Composite Manufacturing Centre (HMC); Feb. 2014 Airbus reinforces
its presence in India (subsidiary: Airbus India) Massive
development of relationship in Singapure Aeroflot (RUS): first
airline with sharklet equipped A320 (Feb. 14) Invests in
robotics-project FUTERASSY in Spain (Feb. 2014) Agreement with
M.I.T. to explore the use of digital manufacturing in aerospace
(Dec. 2013) Good promotion on R+D Good positioning on actual and
future markets 6. Future competiveness of airbus (1)
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 32 6. Future competiveness of airbus
(2) 6.2 Long-term future - Airbuss vision for smarter skies: Annual
report about the future of aviation (in 2050) Basis for Airbus
Concept Plane: A380 Future depends on the challenge how to solve
the energy- problem Impressions (video):
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 33 6. Future competiveness of airbus
(3) 6.3 Summary ideas: Seats with sensors, that adapt to your body
Recycable materials made of plant fibres, self-cleanable
Glass-cabins (partially) Social rooms: virtual golf court, lounge
Oil of an alga istead of kerosine Artificial intelligence,
self-repairing materials Vertical take-offs for gaining space in
cities For long-distance flights: flying aircraft carriers work on
implementation of some visions already nowadays
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 34 7. Conclusion Competition between
Airbus and Boeing: duopoly in the large jet airliner market since
the 1990s The A380 emerged from the estimated necessity of a VLA:
more capacity (550 passengers), more comfort, also to reduce
Boeing's market share Some successful restructuring programs assure
the ability to compete nowadays. Nevertheless the project A380 was
so far an expensive failure: The problems that Airbus experienced
during the development of the project A380 resulted in significant
cost overrun (3 billion), schedule delays (3 in less than 1.5
years) a firm crisis (change of Airbus CEO, A380 PM) Technical
problems with the A380 during the last years: necessary to search
new approaches and new technologies to stay competitive. Airbus has
here very good, but ambitious imaginations ambitious visions are
necessary for breakthroughs
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 35 Source: http://www.avioners.net
Source: http://www.airbus.com
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MBA IM 2015 Project Management Muytoy Nancy / Izquierdo Alfonso
/ Wenzler Jrgen / 22.04.2014 36 Source:
http://www.austrianaviation.net Discussion Source:
http://www.aerotelegraph.com
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The Airbus A3XX Project proposal for solution Technology
ComplexityNovelty Pace Super-high tech High-tech Medium-tech
Low-tech DerivativePlatformBreakthrough AssemblySystemArray Regular
Fast/competitive Time-critical Blitz Current style Required
style