Presented by: Michael Weidner Lindsay Brew Robert 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% AIRBUS FRANCE AIRBUS GERMANY AIRBUS SPAIN AIRBUS UK *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 Nazaire Toulouse Broughton Nantes Filton Madrid Méaulte Illescas Puerto Real Laupheim Stade Hamburg Bremen Varel Buxtehude Nordenham  55,000 employees at 16 centers Production sites Major 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 CO 2 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 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

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