Presented by:

Michael WeidnerLindsay BrewRobert Zander

Airbus | Case Presentation • Introduction

• History

• Industry Analysis

• Company Analysis

• Competitor Analysis

• Recommendations

Introduction

Mission Statement:“Meet the needs of airlines & operators by providing

the most modern and comprehensive aircraft”

• Goals– Deliver Aircraft On time / On Cost / On Quality– Provide safest plane possible

Reasons for Airbus creation

• To compete with American companies– Boeing– McDonnell Douglas– Lockheed Martin

• Goal was to be more affordable than competitors

History

• Chose name “Airbus” because it was accepted by the French

• Officially formed in 1970

• Maiden voyage for A300 in 1972

• CASA of Spain joined 1974

• UK joined in 1979

Airbus | The organization

20% 80%

AIRBUSFRANCE

AIRBUSGERMANY

AIRBUSSPAIN

AIRBUSUK

E u r o p e a n A e r o n a u t i c D e f e n c e a n d S p a c e C o m p a n yE u r o p e a n A e r o n a u t i c D e f e n c e a n d S p a c e C o m p a n y

*Source: Airbus S.A.S

Airbus | Production and engineering sites

* Approximate figures July 2004

Airbus | direct workforce in Europe *

Headquarters: <1%employees

Airbus France: 33% employees

Airbus Germany: 37% employees

Airbus UK: 18% employees

Airbus Spain: <1% employees

Airbus | direct workforce in Europe *

Headquarters: <1%employees

Airbus France: 33% employees

Airbus Germany: 37% employees

Airbus UK: 18% employees

Airbus Spain: <1% employees

St NazaireSt Nazaire

ToulouseToulouse

BroughtonBroughton

NantesNantes

FiltonFilton

MadridMadrid

MéaulteMéaulte

IllescasIllescas

Puerto RealPuerto Real

LaupheimLaupheim

StadeStade

HamburgHamburg

BremenBremen

VarelVarelBuxtehudeBuxtehudeNordenhamNordenham

55,000 employees at 16 centers

Production sitesMajor engineering sites

* Values from Airbus 2006

Airbus | Production system

AIRBUS-France

AIRBUS-Germany

AIRBUS-UK

AIRBUS-Spain

*Source: Airbus S.A.S

Aircraft Industry Analysis

• Global Issues

• Risks

• Future Trends

Global Issues

• Aviation & Environment Summit

• Noise Reduction

• Air Quality• CO2 Emissions

• Fuel Efficiency

Risks

• Aircraft Market Cyclicality

• Terrorism

• Limitations for Funding

• Competition

Future Trends

• Commitment to going “Green”

• Technology– Development– Training– Maintenance– Fuel Efficiency

• Personal Air Travel

Company Analysis

• Company Information

• Strengths

• Weaknesses

• Opportunities

• Threats

Company Information

• Owned jointly by EADS & BAE

• 78% of sales for Commercial use

• 22% of sales for Military use

• Largest customer:– International Lease Finance Corp. (ILFC)– Lease Airbus & Boeing planes to many major

airlines

Strengths

• Diversity– 55,000 employees as of 2006– 85 different nationalities

• Customer Support– 2006 spare parts prices froze at 2003 prices– Keeps repair costs down for its customers

Weaknesses

• Management changes– Caused by delay of A380– Parent company EADS will have more

oversight

• Too many suppliers– Plans to cut number of suppliers down from

3000 to 500

Opportunities

• Going “Green”– Ensuring all manufacturing sites be compliant

with latest environmental standards– As of 2005, 14 of 16 had been certified– ISO 14001

• Internationally recognized standard

– Recycling program: 4000 planes to be retired in next 20 years

Threats

• Litigation– In 2006, Airbus & Air France found guilty of

negligence in 1992 plane crash

• Mismatching currency exchange rates – Most sales are in US currency, while its

operating costs are in Euros

Threats from Government Financing

• Government financing– Subsidies for Research & Development– Purchases for Military & Defense

• Agreement on Trade in Large Civil Aircraft– 1992 agreement between EU and US to

regulate levels of government support– In 2004 US broke agreement

Competitor Analysis

• Transportation Industry

• Major Competitor– Boeing

• Minor Competitors– Bombardier– Embraer

Recommendations

• Short Term– Refocus and Reevaluate goals of Mission

Statement – Ensure arrival of A380 with no more delays

• Long Term– Develop new safety technology & training

programs– Gain market share in China, India & other

emerging countries– Continue Diversity & Commitment to going

“Green”– Work with airports to accommodate new A380

the end