Revolution in Jumbo Jet Market

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Revolution in jumbo jet market

Airbus - Boeing


Airbus-subsidiary

 

of EADS,European aerospace company founded in 1970 Revenue-US $57 billion. Manufacturer of the world's largest airliner, the A380.



Boeing-founded in

 

1916 by William E. Boeing in Seattle, Washington. Revenue-US$ 64.306 billion largest global aircraft manufacturers by revenue, orders and deliveries.

A380 v/s Boeing747


A380-maiden flight on 27 April 2005 nickname Superjumbo 555 passengers



Boeing747-First flown commercially in 1970 Nickname-Jumbo Jet, or Queen of the Skies 416 passengers Cost-US$228–260 million Range-13,450 km Speed-920 km/h 1,418 units sold

 



    


  

Cost-US$375.3 million
Range-15,200 km Speed-900 km/h As of Oct 2011 236 firm orders for the A380, of which 58 have been delivered.

SWOT analysis-Airbus




Strengths:

Opportunities:

support from European Union Wide range of models-twin engine mid sized to four engine gigantic sizes
Weakness:





High cost & longer time for design & production

rise in demand for air travel. Demand for more transcontinental flights with more capacity. Threats: Boeing Airline Disasters, Terrorism, increase in aviation fuel prices

SWOT analysis-Boeing
o

o

strong brand name in commercial airlines. production of new low cost aircrafts. America’s largest exporter. weakness: high R&D costs. delays due to suppliers & manufacturers

Strengths:



Opportunities:



increase in air travel innovative concepts for attracting customers Asian market –growth for defence & commercial aircrafts Threats: Airbus increase in jet fuel prices,slow down in aviation market

PEST analysis -Airbus



Political factors: Liberalization of travels between EU and US . The tension between Middle East and US, gives a slightly higher preference to a non US manufacturer and Airbus is an automatic choice.



Economic factors: Oil price Increase can decrease demand. terrorist attacks, wars could affect the economy.



Social factors: Change in the life style of people –increased air travel. Luxurious mode of air travel by people.

Technological factors:  More Fuel efficient engines for longer range. Carbon Fibre used in Construction of the body. Technological advancements to reduce CO2 emission and Noise generated.


PEST analysis-Boeing


Political factors: The US Govt &(FAA) influence the air transport. Regulations by the US & European govts proves to be a major force for orders for new aircraft and engines.

Economic factors:  Aircraft manufacturers rely heavily on subsidies. Fuel costs, Risk of terrorism




Social factors:



Anti-US feelings due to recent Iraq & middle east wars affected on Boeing's sales .

Technological factors:

The supersonic transport. using computer technology to build a prototype-cost effective. Use of lighter materials.

Boeing as the leader



  

They have market share of 51.2% They introduced B747 jumbo jet in 1970 Monopolist in the market of jumbo jet aircraft till 2000. B747 had earned the company $20 billion in profit for last 30 years. Use mobile defense strategy-the products includes :Commercial airliners Military aircraft Munitions Space systems Computer services

Airbus as challenger
Market share of 44.3%.  Only competitor to Boeing in commercial aircraft segment.  Use frontal attack to challenge B747.  Came up with A380 to challenge B747 in 400+ seat jumbo jet aircraft segment  Added extra features to A380spa,bar, casino.


Marketing Strategy: BOEING
Defensive  Direct point to point flights  Concentrates on efficiency  Introduced sonic cruiser as a high speed jet but later changed it to 787dreamliner.


Marketing Strategy: AIRBUS



 

Reduced operating cost per seat. Current Customer Database management Production efficiency Relationship marketing myopia
• Relationship seekers • Relationship exploiters • Loyal buyers • Arm’s length transactional buyers

What’s in store for the future?
Increase in the Asian aviation –leading to increase in no. of aircrafts.  Boeing might come back up as a strong competitor to Airbus with better technology.  A new competitor like Bombardier or Embraer may emerge.  Boeing may provide stiff competition to Airbus if it comes with a similar aircraft as Airbus A380 in that particular segment.


Thank you

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