OPIM 5894 ADVANCED PROJECT MANAGEMENT AIRBUS 3XX: DEVELOPING THE WORLD’S LARGEST JET SURESH NAIR, Ph.D. Professor, School of Business University of Connecticut, Storrs, USA http://users.business.uconn.edu/snair/opim5894.html Airbus 3XX: developing the world’s Largest Commercial Jet 2 Issues Raised Basic economics of large projects Large upfront expense ($13B) with uncertain returns The complexity of estimating demand and revenue Role of government as investors and customers Should Airbus launch this product? Prof. Suresh Nair, University of Connecticut Airbus 3XX: developing the world’s Largest Commercial Jet 3 Team Assignments – Team 1 Future of Air Transportation and possible Boeing response Evaluate how air transportation is evolving – point to point vs. hub and spoke. Resultant demand for VLAs Analyze Boeing’s possible competitive response to A3XX How would Airbus decisions and Boeing’s response change due to changes in fuel prices, euro value changes? Should Airbus launch A3XX? Prof. Suresh Nair, University of Connecticut Airbus 3XX: developing the world’s Largest Commercial Jet 4 Team Assignments – Team 2 Break-even analysis How many planes/year will Airbus have to sell to breakeven? Do they have the capacity to produce that many? How sensitive is the B/E point to R&D and Operating Margin changes? How does the B/E compare to B747 volumes? Prof. Suresh Nair, University of Connecticut Airbus 3XX: developing the world’s Largest Commercial Jet 5 Team Assignments – Team 3 Demand Projections How many A3XX planes do you estimate Airbus be able to sell per year? Support your answer with quantitative and qualitative analysis What are your assumptions? How sensitive is your estimate to these assumptions? Be as specific as possible. What explains the wide variation in forecast for VLA Passenger aircraft between Airbus (1235) and Boeing (330) in Exhibit 6 and 8? Prof. Suresh Nair, University of Connecticut