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A Adcox Aviation Trade School: United States Aeritalia: Italy A Adcox Aviation Trade School: United States Aeritalia: Italy Aermacchi: Italy Aero Design & Engineering: United States Aeronautica Agricola Mexicana SA (AAMSA): Mexico Aérospatiale: France Aero Vodochody: Czech Republic Aeronca Aircraft: United States Aichi: Japan Airbus Industrie: France/Germany/UK Aircraft Manufacturing Co. (Airco): United Kingdom Alisport Srl: Italy American Champion Aircraft: United States Antonov: Russia/Ukraine ATR: France/Italy Aviat Aircraft: United States Avro: United Kingdom Avro Canada: Canada B Bayerische Flugzeugwerke: Germany Bede Aviation: United States Beech Aircraft: United States Bell Aircraft: United States Bellanca Aircraft: United States Boeing: United States Boeing Vertol: United States Bombardier Aerospace: Canada Bowers (Fly Baby): United States Bristol Aeroplane Co.: United Kingdom British Aerospace: United Kingdom British Aircraft Corp (BAC): United Kingdom Bücker Flugzeugbau: Germany Budd Manufacturing: United States C Call Aircraft Company (CallAir): United States Canadair: Canada Caproni: Italy CASA: Spain Cessna Aircraft: United States Champion Aircraft Corp: United States Chance Vought: United States Chengdu Aircraft: China Cirrus Design: United States Colonial Aircraft: United States Columbia: United States Columbia (2005-2007): United States Consolidated: United States Convair: United States Culver Aircraft: United States Curtiss/Curtiss-Wright: United States D Dassault Aviation: France Davis Aircraft: United States de Havilland Company: United Kingdom de Havilland Canada: Canada Diamond Aircraft: Austria Douglas Aircraft: United States E Eastern Aircraft: United States Embraer: Brazil English Electric: United Kingdom Erco: United States Eurocopter: France/Germany Evans Aircraft Company: United States Extra Flugzeugbau: Germany F Fairchild Aircraft: United States Fairey Aviation: United Kingdom Fiat: Italy Fieseler: Germany Fleet Aircraft: United States Focke-Wulf: Germany Fokker: Netherlands Folland Aircraft: United Kingdom The Ford Motor Company: United States Fouga et Cie: France G Gates Learjet: United States General Atomics: United States General Dynamics: United States General Motors: United States New Glasair LLC: United States Globe Aircraft: United States Gloster Aircraft Company: United Kingdom Goodyear Aircraft: United States Government Aircraft Factory: Australia Granville Brothers Aircraft: United States Great Lakes Aircraft: United States Grob Aerospace: Germany Grumman: United States Gulfstream: United States Gyrodyne: United States H Handley Page Ltd: United Kingdom Hanriot et Cie: France Hawker/Hawker Siddeley: United Kingdom Heinkel Flugzeugwerke: Germany Hiller Helicopters: United States Hindustan Aeronautics: India Hipp's Superbird, Inc: United States Hispano-Suiza: Spain Hoppi-Copters, Inc.: United States Hughes Aircraft: United States Hunting Percival: United Kingdom I Intermountain Manufacturing Co (IMCO): United States Interstate Aircraft & Engineering Corp: United States J Junkers Flugzeugwerke: Germany K Kaman Aerospace: United States Kazan Helicopters: Russia/Tartarstan The New Kolb Aircraft Co: United States L Laird Airplane Co.: United States Laister-Kauffman: United States Lake Aircraft: United States Lancair International: United States Learjet, Inc.: United States Lockheed Martin: United States Loening Aeronautical Engineering Co.: United States LTV (Ling-Temco-Vought): United States Luscombe Airplane Company: United States M Macchi: Italy The Glenn L. Martin Co.: United States Maule Air, Inc: United States McCulloch Aircraft: United States McDonnell Douglas: United States Messerschmitt AG: Germany Meyers Aircraft Co.: United States Mikoyan-Gurevich (MiG): Russia Mil Moscow Helicopter Plant: Russia Mitsubishi Corporation: Japan Mooney Aircraft Company: United States Morane-Saulnier: France Moulton Taylor: United States Avions Mudry et Cie: France N Nakajima Hikoki: Japan Nanchang Aircraft Manufacturing Co: China Nardi: Italy Naval Aircraft Factory (NAF): United States Neico Aviation: United States NZAIL (New Zealand Aerospace Industries, Ltd): New Zealand Nieuport: France North American Aviation: United States Northrop Aircraft: United States O Barney Oldfield Aviation: United States Osprey Aircraft: United States P Pacific Aerospace: New Zealand Packard Motor Car Co.: United States Panavia Aircraft: Germany/Italy/UK Pentecost Helicopters: United States Percival Aircraft: United Kingdom Piasecki: United States Pilatus Flugzeugwerke: Switzerland Piper Aircraft: United States Pitts: United States Polikarpov: Russia PZL: Poland Q Quad City Ultralight Aircraft Corp: United States R Raytheon Aircraft: United States Rearwin Airplanes: United States Republic Aviation: United States Robinson Helicopter: United States Rockwell International: United States Rose Aeroplane & Motor Co: United States Rumpler Flugzeugwerke: Germany Rutan Aircraft: United States Ryan Aeronautical: United States S Saab Aerospace: Sweden Sabreliner Corp: United States Schweizer Aircraft: United States Scottish Aviation: United Kingdom Seversky Aircraft: United States Shenyang Aircraft: China Short Brothers: United Kingdom SIAI Marchetti: Italy Sikorsky Aircraft: United States SOCATA: France SPAD: France Start+Flug GmbH: Germany Staudacher Aircraft: United States Stearman: United States Steen Aero Lab: United States Stephens Aircraft: United States Stinson Aircraft: United States Stoddard-Hamilton: United States Sud-Aviation: France Supermarine Aviation: United Kingdom T Taylor Aircraft: United States Teledyne Ryan: United States Texas Engineering & Manufacturing Co (TEMCO): United States Thorp Engineering Co: United States Transall: France/Germany Tupolev: Russia V Van's Aircraft: United States Vertol: United States Vickers Ltd: United Kingdom Vought Aircraft: United States Vultee Aircraft: United States W Waco: United States Western Electric: United States Williams International: United States Wolf Aircraft: United States Wright & Co.: United States Y Yakovlev: Russia York Enterprises: Canada Z Zivko Aeronautics, Inc.: United States Airbus vs Boeing: Contrasting Views for the Future Case Study Reference No. COM0159K This case was written by Supratim Majumdar under the direction of Bitan Chakraborty, IBSCDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. This case was compiled from published sources. © 2006, IBSCDC No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium ± electronic, mechanical, photocopying, recording, or otherwise ± without the permission of IBSCDC AIRBUS VS BOEING: CONTRASTING VIEWS FOR THE FUTURE JUMBOS TO SUPER JUMBOS In early 1999, The Boeing Company (Boeing) conjectured, that in the future it might lose its monopoly in the commercial aircraft industry. Boeing¶s 747 - the 400-seater jumbo, was the most profitable and visible product in the entire product line of the company. But Boeing was facing a reduction in the number of new orders for the giant aircraft (Refer Exhibit 1). In 2000, Boeing¶s arch-rival, the European consortium, Airbus S.A.S. (Airbus), was gearing up with its plans to launch the double-decker, super-jumbo A380, capable of carrying over 600 passengers. A380 was the most advanced, spacious and efficient aircraft ever conceived. Industry experts had expressed their anticipation that Boeing 747 jumbos, which had dominated the large passenger aircraft market (above 400 seats category) for over 30 years, since its inception in 1970, would lose its dominance, to Airbus¶ economical and technically advanced super jumbo A380 The growing acceptance of Airbus among airlines across the world, was also a matter of concern for Boeing. In 1998, in terms of delivery (in value terms) of new aircrafts, Boeing had two-thirds share of the U$65 billion global passenger aircraft market. However, in 1998, Airbus captured 46% of all new orders for passenger aircrafts from the airlines, which was more than double, as compared to 1995. In the first half of 1999, Airbus acquired 62% of the new orders for passenger aircrafts and the remaining 38% was taken up by Boeing Boeing believed that the A380 would be detrimental for Airbus. Boeing was opposed to the idea of developing an all new aircraft to compete with Airbus¶ A380. Developing a new aircraft was an expensive, complex and time consuming affair. Instead, Boeing opted to make design modifications in its existing 747 jumbos, to accommodate over 500 passengers, 20% more than its existing models, at a lower cost. The company also had plans to add new engines to increase the fuel efficiency and flight range of the 747 model. The company assumed that by upgrading its 747 model, it would be able to meet the demand for aircrafts with above 400 seats, inspite of being based on 30 year old technology. Boeing planned to proceed with one of these new jumbos, as soon as Airbus got the nod from a couple of airlines to go ahead with its A380. In order to prevent Airbus¶ entry into the US market, in 1997, Boeing entered into an exclusive 20 years contract with the major US Airlines (Delta, Continental and American Airlines). In 1999, these three airlines accounted for over 11% of the global aircraft demand. Boeing had similar plans to strike exclusive deals with major airlines, to deter Airbus from launching its new jumbo jet. Boeing was convinced that the future air-travel market would evolve into long-range,
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