Airbus Commercial is one of the four operating divisions of Airbus Group with Astrium, Eurocopter, and Cassadian (see Appendix 1). Founded in 1970, Airbus is now the European leading aircraft manufacturer, offering modern and efficient passenger aircraft on the more than 100-seat market. At the end of the financial year 2013, the commercial division of Airbus recorded 39.89 millions of Euros, which represents more than 65% of the group revenues (Airbus.com, 2014). Currently, Airbus Commercial competes in each of the three principal market segments for aircraft with more than 100 seats. These include:
- Single-aisle aircraft, these aircraft have 100 to 210 seats divided by one aisle and are principally used for short-range and medium-range routes.
- Twin-aisle or wide-body aircraft have a wider fuselage with more than 210 seats. These aircraft are capable of serving all short, to long-range markets.
- Very large aircraft, which are designed to carry more than 400 passengers over very long routes with superior comfort standards.
Operating of these different segments has enables Airbus to reach a high level of orders. In 2013, Airbus achieved a new industry record of 1,619 gross commercial orders (914 gross orders in 2012) with net orders of 1,503 aircraft (2012: 833 net orders) (Airbus.com, 2014).
Airbus designs central aircrafts and tailors them in order to create derivatives to meet the specific different needs and expectations of its customers. By operating this way, pilots can switch for one Airbus engine to another with reduced training costs. Furthermore, technology is at the core of Airbus’ priorities. Indeed, innovations provide the group distinct competitive advantages, with many becoming standards of the aircraft indu...
... middle of paper ...
... 90s and must now be replaced. Moreover, LOT’s fleet size is constitutes of 38 aircrafts, which is not sufficient regarding the growing demand for passenger air travel (+129% since 2000 in Poland (Worldbank, 2013)). For these reasons, the Airline has announced its intent to acquire ten to fifteen new aircraft by the end of 2014. The Airline is considering the different manufacturer’s offers (Drums, 2013) and especially the Airbus A320 as its characteristics are similar to the Boeing 737 (see Appendix 3). In addition, LOT is a member of Star Alliance since 2003, whose network currently offers more than 21,500 daily flights to 1,356 airports in 193 countries all over the world (World Aviation, 2014). Star Alliance also regroups 28 airlines companies such as Croatia, Slovenia and Turkish airlines that already well-established customers of Airbus (Star Alliance, 2013).
Air Canada is Canada's biggest aircraft and the biggest supplier of booked traveler benefits in the Canadian market, the Canada-U.S. Trans outskirt showcase and in the worldwide market to and from Canada. In 2015, Air Canada together with its Air Canada Express provincial accomplices conveyed more than 41 million travelers, offering direct traveler administration to more than 200 goals on six landmasses. Air Canada is an establishing individual from Star
Developing the World's Largest Commercial Jet. In this case, we will be analyzing strategic interaction between the two. Airbus and Boeing, the two leading producers in the global commercial. aircraft industry.
Airline of choice: Remain the top choice for international flights for premium customers as well a...
Use of a single-type aircraft fleet. The A320 Airbus has an increased seating capacity of 30 seats (24 after additional seating reconfigurations), is cheaper to maintain, fuel efficient and reduces training costs, relative to other aircraft models used in the industry.
As airline industry is a competitive marketplace, the airline companies use new technologies to improve their efficiency and decrease the overhead costs, including ‘advanced aircraft engine technology, IT solutions, and mobile technology’ (Cederholm 2014). The technology changes including technology improvement, new innovation and disruptive technology. The disruptive technology need to meet the characteristics of ‘simplicity, convenience, accessibility and affordability’ (Christensen 1995). The technology changes would bring both opportunities and threats to airline companies. Since Labour cost and fuel costs occupy 50% of most airlines operating cost (Groot 2014). Therefore, if new technologies could be disruptive in the two aspects, there will be important changes to current airline
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
While Boeing has spent many resources planning what to build, Boeing is now faced with the problems of how to meet customer demands for the new aircraft. Boeing Corporation is at an all-time high for sales. "For the first time, its commercial-airplane unit earned more than its defense side. " (Masters, 2007) "Boeing's backlog of orders increased 47% to a record 208 Billion, more than seven times the units 2006 revenues. "
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
The Boeing 737 is one of the most popular aircraft ever produced. Over 7,700 in all variants have been produced, with an additional 11,275 aircraft on order. This makes the 737 the most popular jetliner to date. The 737 has a wide variety of uses, and still remains extremely popular and in high demand. Because it is such a widely mass produced aircraft, it is also a target for constant aerodynamic improvements.
Boeing/Airbus Case Analysis Competition in the Commercial Aircraft Business. With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces. Figure 1: Porter’s Five Forces Applied to Aircraft Industry. Barrier to entry: - High barriers to entry, to a certain extent, help understand the risks involved in operating in the aircraft industry.
Airbus A380: How the Airlines Compare." Busineesstraveller.com. Panacea Publishing, 31 Aug. 2013. Web. 1 Dec. 2013.
In 1990 Boeing was set to introduce the 777, the world’s largest and longest haul twin-bodied jet at the time. The 777 would serve the medium and long haul markets like the expanding Asian market. Boeing’s main competitors, Airbus Industries and McDonnell Douglas, had already announced plans to produce airliners that would compete directly with the 777. Analysts believed that the intense competition between the manufacturers would serve to depress prices for the airliners. Lower prices for aircraft would mean lower earnings.
Michael, D. (2010, June 9).Emirate Airline Orders More Airbus Planes, Challenging Germany’s Lufthansa. The Wall Street Journal, p.B1.
Several large scale, interrelated conditions have affected the airline industry over the past several years in such a manner that every carrier has had to respond in order to remain viable and competitive.
Within the airline industry currently the airlines can be divided into low cost airlines and full service airlines. The low cost airlines targets customers that are seeking no frills connectivity between cities at low ticket prices. The full service airlines provide several add-ons like free meals, on plane entertainment, and communication facilities. The target market for full service airlines are customers who are willing to spend extra for the services that the airlines provides.