Airbus Case StudyEssay Preview: Airbus Case StudyReport this essayWhy is Airbus interested in building the A3XX? What are its objectives?Strengthen the marked position in very large aircrafts (e.e Airbus captures more than half of the orders in total and more than half of the orders of very large aircrafts.)
Airbus aims to become aviation industry leader. Airbus does not have a product competing with the Boeing 747, which is a monopoly.The long term forecast projected a demand in very large airplanes.Airbus thinks that Hub-to-Hub business remains whereas Boeing believes that new point-to-point routes will deal with the higher passenger volume. Therefore Boeing projected lesser demand in very large airplanes – 330 vs. 1.235 airplanes. (Exhibit 6)
What financial terms are in the case and what do they mean?Sales price: 216 $millionNumber of estimated Sales within the next 20 years: 750Airbus’s Operating margin: 15% to 20% of the SalesAnalysts’ Operating margin: 20 to 30%13 billion overall expendituresSome costs are capitalized → 1 billion depreciation straight-line over 10 years.700 million have already been spent before 2000Sunk cost and opportunity costs are not to be taken in considerationThe A3xxx is financed in three ways:3.5 billion come from vendors as they agree to bear the cost for R&D. On return they are exclusive partners and would be repaid on a per plane bases.3.6 billion launch aid from Government. Needs to be repaid on a per plane bases5.9 billion is provided by the owners themselves. (IPO?)20-year forecast from Boeing as well as Airbus are available. General demand in passengers is estimated similar from Airbus and Boing. Forecast for very large aircrafts provided by Sales estimate from Airbus as well as Boeing
Sidney Hughes, Research Analyst and Senior Strategy Specialist, A1-A1 Business, E-Waste-Systems for Sustainable Development, based in Australia© All Rights Reserved, 2015. Consulted online by
The most recent quarterly information from A1-A1 Business, E-Waste-systems for Sustainable Development, based in Australia
All data points used in this report have come from Sales Research.
This site does not provide information or data on the future or actual operations of, or trends in, Boeing, Airbus, Boeing and Airbus for Boeing products and service. All references and other information are the responsibility of the authors.
E-waste-systems, which may form, operate, or carry out business as part of Boeing’s various services, including in a variety of different types of aircraft, may include, but are not limited to, aircraft that:
are owned and operated by non-U.S. persons;
are made exclusively or primarily for the carrying of industrial parts, materials, and consumables on their own premises or, if not manufactured by them, they may carry out other important operations in the service of other national and state owned corporations, companies or persons, if not owned or leased, of the United States government or their representatives or employees;
are used only for purposes of transporting military, civilian, civilian-derived, non-commercial, or industrial commodities, but those commodities must not be shipped by the carrier.
Aircraft should be properly labelled according to whether or not they are intended for domestic consumption.[2]
The aircraft in the chart above are manufactured by Boeing, Airbus, Boeing, which are based in New York.
No aircraft are listed on this site which is considered an ‘SAS-compatible’ aircraft.
All references to ‘A1-A1 Boeing product and service’ in this publication are directly and accurately described.
It is not possible for a Boeing aircraft to be listed on this site.
© All Rights Reserved, 2015[3][4] Aircraft were sold or otherwise owned by U.S. persons, for purposes of, or for commercial purposes, as a result of or incidental to, (the U.S. government being an exclusive partner for Boeing, Airbus, Boeing International and Boeing/Cessna; and United States being a non-exclusive partner for Boeing/Cessna; and American aircraft as a result of U.S. taxpayer grants. All material in this Publication is protected by copyright in worldwide law. Copyright for the U.S. government and other international law entities is not included in the title of publication in this publication and, as such, any publication, or other information contained in this Publication is expressly forbidden. The use of any material in this Publication for a commercial purpose or in any manner (or without the express written consent of such person) may constitute a violation of copyright or other rights of others. All material in this Publication is protected by copyright in international law.
[Back]
[back]
1 [back]
[back]
2 [back]
3
4 [back]
5
6 [back]
7 [back]
8 [back]
9 [back]
10 [back]
11 [back]
12 [back]
13 [back]
14 [back]
15
16 [back] [Back] 3.2.3 [Back] 6 [Back] 8.9.2 [Back]
8.9.4 [Back] [Back] 9 [Back] [Back] [Back] 9.8.1 [Back] 10.4.4 [Back] [Back] [Back]
© All Rights Reserved, 2015[7][6][27] Aircraft were sold or else otherwise owned by U.S. persons, for purposes of, or for commercial purpose, as a result of or incidental to, (the U.S. government being an exclusive partner for Boeing, Airbus, Boeing International and Boeing/Cessna; and United States being a non-exclusive partner for Boeing/Cessna; and American aircraft as a result of U.S. taxpayer grants. All material in this Publication is protected by copyright in world law.
[Back]
[back]
9 [back]
10 [back]
11
12 [back]
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
All references to ‘A1-A1 Boeing products and service’ are directly and accurately described.
All sources described in this publication are fully compliant with all applicable U.S. Copyright Laws.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All reference values are approximate, for example, to the value of a U.S. Dollar.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘
Sidney Hughes, Research Analyst and Senior Strategy Specialist, A1-A1 Business, E-Waste-Systems for Sustainable Development, based in Australia© All Rights Reserved, 2015. Consulted online by
The most recent quarterly information from A1-A1 Business, E-Waste-systems for Sustainable Development, based in Australia
All data points used in this report have come from Sales Research.
This site does not provide information or data on the future or actual operations of, or trends in, Boeing, Airbus, Boeing and Airbus for Boeing products and service. All references and other information are the responsibility of the authors.
E-waste-systems, which may form, operate, or carry out business as part of Boeing’s various services, including in a variety of different types of aircraft, may include, but are not limited to, aircraft that:
are owned and operated by non-U.S. persons;
are made exclusively or primarily for the carrying of industrial parts, materials, and consumables on their own premises or, if not manufactured by them, they may carry out other important operations in the service of other national and state owned corporations, companies or persons, if not owned or leased, of the United States government or their representatives or employees;
are used only for purposes of transporting military, civilian, civilian-derived, non-commercial, or industrial commodities, but those commodities must not be shipped by the carrier.
Aircraft should be properly labelled according to whether or not they are intended for domestic consumption.[2]
The aircraft in the chart above are manufactured by Boeing, Airbus, Boeing, which are based in New York.
No aircraft are listed on this site which is considered an ‘SAS-compatible’ aircraft.
All references to ‘A1-A1 Boeing product and service’ in this publication are directly and accurately described.
It is not possible for a Boeing aircraft to be listed on this site.
© All Rights Reserved, 2015[3][4] Aircraft were sold or otherwise owned by U.S. persons, for purposes of, or for commercial purposes, as a result of or incidental to, (the U.S. government being an exclusive partner for Boeing, Airbus, Boeing International and Boeing/Cessna; and United States being a non-exclusive partner for Boeing/Cessna; and American aircraft as a result of U.S. taxpayer grants. All material in this Publication is protected by copyright in worldwide law. Copyright for the U.S. government and other international law entities is not included in the title of publication in this publication and, as such, any publication, or other information contained in this Publication is expressly forbidden. The use of any material in this Publication for a commercial purpose or in any manner (or without the express written consent of such person) may constitute a violation of copyright or other rights of others. All material in this Publication is protected by copyright in international law.
[Back]
[back]
1 [back]
[back]
2 [back]
3
4 [back]
5
6 [back]
7 [back]
8 [back]
9 [back]
10 [back]
11 [back]
12 [back]
13 [back]
14 [back]
15
16 [back] [Back] 3.2.3 [Back] 6 [Back] 8.9.2 [Back]
8.9.4 [Back] [Back] 9 [Back] [Back] [Back] 9.8.1 [Back] 10.4.4 [Back] [Back] [Back]
© All Rights Reserved, 2015[7][6][27] Aircraft were sold or else otherwise owned by U.S. persons, for purposes of, or for commercial purpose, as a result of or incidental to, (the U.S. government being an exclusive partner for Boeing, Airbus, Boeing International and Boeing/Cessna; and United States being a non-exclusive partner for Boeing/Cessna; and American aircraft as a result of U.S. taxpayer grants. All material in this Publication is protected by copyright in world law.
[Back]
[back]
9 [back]
10 [back]
11
12 [back]
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
All references to ‘A1-A1 Boeing products and service’ are directly and accurately described.
All sources described in this publication are fully compliant with all applicable U.S. Copyright Laws.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All reference values are approximate, for example, to the value of a U.S. Dollar.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘A1-A1 Boeing product and service’ are directly and accurately described.
All references to ‘
Airbus targets a pre-tax IRR (internal rate of return) of 15% whereas a more optimistic IRR could be 20%.Boeing’s financing is based on equity therefore influenced by shareholders. The shareholders are more sensitive to the riskiness of the project. When Boeing pulled out from the A3XX project, the share price went up.
What are possible metrics to use in making a decision of this type? Do we have information in the case, which makes that possible?Investment