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AIRBUS 
From the National Champions and the 
European Project to the Global Player 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
2 
AIRBUS? 
You said Airbus? 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012 
Source: Skyward.ch 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com
3 
AIRBUS? 
You said Airbus? 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012 
Source: Skyward.ch 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com
4 
AIRBUS? 
You said Airbus? 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012 
Source: Skyward.ch 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com
What do You Know About Airbus? 
 Please help 
 Discuss for five minutes in groups 
 Nominate a representative 
 Report to your colleagues in one minute 
 The floor is yours 
5 
AIRBUS? 
You said Airbus? 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com
6 
Airbus? 
You said Airbus?
Facts about Airbus 
 Airbus is… 
 Number one in civil airframe orders (1419) and delivies (524) in 2012 
 Known as an economic venture with market share of 64 % in 2012 
 Considered a prime technology driver 
 Presented as a European success story with 11.570 orders and 7079 del. 
 Renown as a Global Player with 6659 aircraft in service 
 … yours to learn from 
7 
AIRBUS? 
That’s Airbus! 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
Agenda 
 Airbus in it’s world 
 The world of air transport (demand: operators / supply: airframers) 
 Aerospace as a strategic industry 
 The Airbus Case 
 A changing framework: European integration (optional) 
 The world around everything: Globalization and Neoliberalism 
 Looks into the future 
 Many case studies 
8 
AIRBUS? 
That’s Airbus! 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS? 
That’s Airbus! 
Learning Objectives 
 After our course, you are able to… 
 … outline the historical agenda of the Airbus programme 
 … explain at least three major influences on the Airbus 
programme 
 … apply at least three concepts to your own operations 
 … it is up to you! 9 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
Why is this Important for You? 
 As a future Reims Management School Graduate, You… 
 … need to be aware of possible roles of stakeholders in 
economics 
 … need to be aware of the importance of a long term vision 
translated into decisions 
 … need to be aware of the role of technology in economics 
 … it is up to you! 
10 
AIRBUS? 
That’s Airbus! 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
The World of Air Transport 
 Three clusters of actors 
 Aircraft operators in demand for airframes 
 Airports / ground facilities which serve aircraft operators 
 Airframe constructors which supply airframes 
 Perfectly complementary… and highly regarded / regulated 
12 
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Aircraft Operators (1) 
 An industry set for growth (source IATA) 
 Annual USD 425 billion turnover (2010) 
 5.5 million direct jobs, adding up to 33 millions (2010) 
 Some 2.5 billion customers (2010) 
 Relevant for everybody 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
13 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Aircraft Operators (2) 
 A highly fragile industry with high risk operations 
 Pressure on margins and cost at any step 
 Highly know how, and experience sensitive 
 High political exposure, positive and negative (ecologism) 
 Vulnerable to externalities (recession, fuel price…) 
 Gigants on argyle feet 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
14 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airports / Ground Facilities 
 Interface air transport 
 Technical/functional monopoly at served destination 
 Next to perfect competition for transfer / transit passengers 
 Facilitator / focus of local economic development 
 Entry / exit door for national economy 
 Essential for the country 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
15 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (1) 
 Economic actors supplying the hardware 
 High value adding industry attracting the best brains 
 High cost for R & D and overheads 
 High drive for innovation in a prospective perspective 
 High concentration owing to competition 
 Essential for the country 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
16 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (2) 
 Their product: airframes 
 Numerous physical, mathematical, functional constraints 
Maximum drive for economic efficiency 
Maximum need for Risk Management at any level 
 Very little space for product differentiation 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
17 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (3) 
 Fundamentals of airframes 
 Product life cycles of 20 to 40 years (second hand market) 
 High degree of technological and contractual lock-ins 
 Sensitive to « correct » timing of market entry 
 Each programme is high risk owing to competitor’s life cycle 
 A high risk business! 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
18 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (4) 
 Technology drive behind airframes 
 Attempt to « leapfrog » competitor 
 Attempt to override locked-in competitors 
 Race for early commitments 
 High degree of customer lock-in (change of supplier) 
 A high stake business 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
19 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (5) 
 New products… 
 Anticipate market need and foreseeable competitor’s reactions 
 Use currently available technologies 
 Always major compromises in technology and functionality 
 Focused on as many customers as possible 
 … always have a wider economic, technological, social context 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
20 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (6) 
 Launch of new airframes 
 Gain of productivity for current and future customers 
Maximize difficulties for competitors to catch up 
Maximize barriers for market entry for new competitor 
 Response to expected tomorrows 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
21 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Airframe manufacturers (7) 
 Strategic partnership with operators 
 Complex financial operations 
 Standalone airframe or first member of aircraft family 
 Stepstone to further aircraft models 
 Look into the future every day 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
22 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Classroom Incubation 1 
 What government policies are adequate for air transport 
 Conceptualize such a policy in groups for 10 minutes 
 Elaborate a global national air transport policy 
 Nominate a group representative 
 Share your findings with your colleagues 
 Build your own air transport future 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
23 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
24 
Airbus? 
You said Airbus?
AIRBUS 
Aerospace as a 
Strategic Industry 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
AIRBUS 
Aerospace as a 
Strategic Industry 
What is Industry? 
 Industry is a value-adding economic activity 
 Supply of physical goods 
 Contributing to local development 
 Strengthening national economy 
 Raising standard of living of producers and customers 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
26 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
Attitudes of Industrial Actors 
 Best possible factor allocation 
 Providing responses to felt and anticipated needs 
 Drive to outpace competition 
Making best possible use of factors of production 
 Inventions and expected innovation processes 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
27 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The Product Cycle 
Integration into society 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
28 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Market penetration 
Invention of 
product or 
service 
Approval by 
decision 
makers 
Convince 
pioneers 
Advantages 
felt by others 
Invention 
generalizes 
in market 
Invention 
becomes part 
of society 
Response to 
a need felt 
Win 
promotors 
for the 
«cause» 
Target 
customers 
sharing the 
same need 
as the 
inventors 
Solution 
responds to 
or exceeds 
expectations 
Solution 
offers real 
gain in 
productivity 
Solution 
leads to new 
attitudes 
Author based on Alter (2002), 15-40
AIRBUS 
Aerospace as a 
Strategic Industry 
The Two Types of Innovation 
 Proactive invention and reactive learning by experience 
 Voluntary innovation: ambition to optimize 
 Involuntary innovation: attempt to correct failure 
 In both cases: accepted or rejected by society 
 In any case there are multiple changes 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
29 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The State in the Economy 
Management of territory under its jurisdiction 
 Formal institutions governing population and activities 
 Elites try to optimize situation for re-election 
 Elites promote their interest within and outside state 
 Role of state has not ended with globalization 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
30 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The Two Level Game (Putnam) 
National Territory International System 
Supreme Authority Legal entity/actor 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
31 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Author based on Putnam (1993), 431-468 
GOVERNMENT 
National policies, among them 
economic policies including 
application of international 
agreements, compliance with 
international regimes… 
Objective: Optimize national 
territory as a production site 
International relations through 
diplomacy, international 
governmental organizations 
(WTO), trade agreements, 
regional integration (EU)… 
Objective: Maximize trade-offs 
for national economy
AIRBUS 
Aerospace as a 
Strategic Industry 
Strategic Industries 
 Crucial for state and economy as a whole 
 Worldwide demand (pharmaceuticals, energy systems…) 
 Unsubstituable, therefore inelastic demand 
 Complex and specialized know-how intensive processes 
 Necessary for economy (energy) and state (security) 
 Strategic suppliers are in a situation of monopoly 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
32 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
Sensitivity and Vulnernability (Keohane and Nye) 
Other Country National Territory 
Other Country 
G O V 
Economic 
Policies 
Economic 
Policies 
Economic 
Policies 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
33 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Author based on Keohane and Nye (1989) 
G O V 
E C O 
G O V 
E C O E C O
AIRBUS 
Aerospace as a 
Strategic Industry 
Strategic Trade Policies (Krugman) 
 Prevent vulnerabilities – lower sensitivities 
 Policies target already strong strategic industries 
 Mixture of national economic and technology policies 
 Mixture of international initiatives in favour of national industries 
 Related policies (higher education, research, immigration) 
 Not to be confused with classical protectionism 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
34 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The Technology Leap (Mokyr) 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
35 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Author based on Krugman (Mokyr (1993), 431-468
AIRBUS 
Aerospace as a 
Strategic Industry 
The Challenge: Path Dependence (Krugman) 
 Heritage, present and future of a production site 
 Site configuration result of all past decision’s outcomes 
 Each decision cost-benefit based on site configuration at its time 
 Strengths depend on commitments by decision makers 
 The stronger Path Dependence, the higher lock-in 
 Chance or risk 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
36 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The Chance: The Technology Leap (Mokyr) 
 Revolutionary invention leading to fundamental change 
 Innovation creates a disruption (plastics, mobile phone…) 
 Opportunity to establish new Micro- / Macro-Path Dependences 
 Strategic Trade Policies seize opportunities (Silicon Valley) 
 High Risk versus High Reward (Question Mark in BCG Portfolio) 
 Breaking the lock-in 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
37 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
STP and P.D. in Practice: Site Optimization 
 Past, present and future focus on Strategic Industries 
 Close cooperation between all involved actors 
 National policies focused on R & D, S & T, higher 
education… 
 International policies targeted at maximized trade offs 
 Objective: strenghten Strategic Industries 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
38 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
Site Optimization (Keohane and Nye) 
Other Country National Territory 
Other Country 
G O V 
Economic 
Policies 
E C O 
G O V 
Economic 
Policies 
Author based on Keohane and Nye (1989), Krugman (1996), Krugman (1994) 
Economic 
Policies 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
39 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
G O V 
E C O E C O
AIRBUS 
Aerospace as a 
Strategic Industry 
The International Product Life Cycle (Vernon) 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
40 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Author based on www.provenmodels.com 
Time 
Benefits 
Exports / Influence 
Losses /Invest 
Imports / R & D 
New Prod Mature Product Standardized Product 
Competing 
similar country 
Inventor’s country 
Technologically leading country 
Emerging 
country 
Technological 
emancipation 
Rising cost of 
production
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Classroom Incubation 2 
 What do you think about Site Optimization 
 Discuss one sector per group for 10 minutes 
 Elaborate a coherent Site Optimization policy or decide against 
 Nominate a group representative 
 Share your findings with your colleagues 
 Be your own site optimizer 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
41 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
42 
Airbus? 
You said Airbus?
AIRBUS 
The Airbus 
Case 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
Stages of Airbus History 
 A long, international history from the beginning 
 1920 – 1965: Setting the stage 
 1965 – 1970: The National Champions 
 1970 – 1986: The dedicated entrepreneurs 
 1986 – 1992: The audacious innovators 
 1992 – 2001: The visionary strategists 
 2001 – 2006: The scared money makers 
 2004 – 2012: The new hard workers 
 What does this mean? 
44 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage (1) 
 Europe: Site Optimizations for Strategic Industries 
 Europe until 1939: Airframers are national programmes 
 After 1945: Competition between France and United Kingdom continued 
 1949: United Kingdom delivers first jet aircraft Comet 1 which fails owing 
to overstretched technology leaps 
 1955: France launches Caravelle jet which fails on the market 
 Technology is not everything 
45 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage (2) 
 United States: Free enterprise 
 United States until 1939: Airframers are private corporations 
 After 1945: Eased market entry through mass production and Marshall 
Plan 
 1958: Monopolies through large quadrijets Boeing 707 and Douglas DC-8 
 1964: First of a series of smaller jets Boeing 727 to swamp the world 
market 
 Market strategy is everything 
46 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage (3) 
 World air transport: towards unlimited growth 
 1965: Boeing announces quantum leap with Boeing 747 Jumbo Jet widebody 
 1966 - 1967: Lockheed and McDonnell-Douglas announce smaller 
widebodies Tristar and DC-10 
 Common characteristics (two aisles, containerized cargo) leading to 
technological disruption (technology leap) 
 Revolution in air transport announced for 1970 - 1972 
 Market strategy is everything 
47 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage (4) 
 Europe: Cooperation to protect strategic industry of aerospace 
 1959: France / West Germany: State treaty for the Transall transporter 
 1962: Industrial cooperation Netherlands, U.K., West Germany for the 
Fokker F-28 
 1965: Industrial and commercial cooperation West Germany, U.K., 
Netherlands for the VFW-614 
 All programmes remain marginal in the world market 
 New idea: enable economies of scale 
48 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage (5) 
 The political breakthrough: the Concorde 
 1962: State treaty between France and the U.K. for supersonic aircraft 
 French motivations: Additional resources for national leadership programme 
 U.K. motivations: Maintain strategic industry, obtaining adhesion to EEC 
despite Charles de Gaulle’s veto 
 National motivations around common denominator 
 1969: Maiden flight, 1975 commercial service, 2006 withdrawn from use 
 Concorde: masterpiece of technology, commercial disaster 
49 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1920 – 1965: Setting the Stage 
 Analysis 
 Lacking economies of scale put European airframers at 
disadvantage despite technological superiority 
 Transnational programmes as new way to sustain national 
Strategic Trade Policies 
 U.S. dominate world market through mass production 
 The American Challenge / Le défi américain 
50 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1965 – 1970: The National Champions (1) 
 The wake up call 
 1965: Colloquium of London on future of airframing in Europe 
 Window of opportunity following new category of widebody aircraft 
 Only chance: transnational cooperation for economies of scale 
 20th July 1967: Governmental treaty between France, Western 
Germany and the U.K. on the Airbus A300 
 Defend national aerospace through transnational cooperation 
51 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1965 – 1970: The National Champions (2) 
 National Strategic Trade Policies 
 France: new large-scale national high tech project 
 United Kingdom: preserve remaining Strategic Industries 
 West Germany: Opportunity to show European commitment 
and to relaunch aerospace industry 
 Common denominators – different orientations 
52 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1965 – 1970: The National Champions (3) 
 Common denominator remains minimal 
 March 1969: U.K. withdraws from state treaty while remaining a subcontractor 
 29th May 1969: State treaty between France and West Germany launching the 
multinational Airbus programme 
 18th December 1970: Groupement d’intérêt économique (GIE) Airbus established for 
programme coordination 
 Partners of GIE Airbus: French Aérospatiale 46,7 %, Deutsche Airbus 46,7 %, West 
Germany/Netherlands VFW-Fokker 4,2 %, joined by Spanish CASA 4.2 % 
 European Investment Bank grants launch aids ; financing and manufacturing remains 
the full responsibility of the partners 
 Increased economies of scale 
53 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1965 – 1970: The National Champions (4) 
 Maximized opportunities 
 Aircraft A300 widebody complementary to U.S. competitors 
 Aircraft compatible with other widebodies being marketed, thus joining 
a new category of aircraft 
 Proven technologies in new combinations 
 National facilities specialized in one component, integration in Toulouse 
 Airbus enables to join the U.S. competitors 
54 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
Aerospace as a 
Strategic Industry 
The Transnational Airbus System 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
55 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Kracht (1994), p.56
1965 - 1970: The National Champions 
 Analysis 
 Focus on coming technology leap as the last chance for national 
aerospace industries 
 Complementary product for same market 
 Economies of scale through specialization of facilities 
 Transition of the U.S. competitors exploited 
56 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (1) 
 Modest beginnings 
 9th November 1971: First firm order by Air France for 6 
 28th October 1972: Maiden flight of the A300, 33 days before 
contractual date 
 Performance and cost of operation exceeded expectations 
 Sales very difficult owing to lack of trust and experience 
 Supported by pioneers and early adopters 
57 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (2) 
 Chances, threats and renewed chances 
 Main chance: Complementary to U.S. widebodies 
 1974 – 1975: Recession, not one sale 
 Tensions between France and West Germany regarding action 
 After 1975: Argument of low fuel consumption decisive 
 Stakeholders believe in project 
58 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (3) 
 Airbus becomes a political issue 
 1975: EEC Commissioner Altiero Spinelli suggests European 
aerospace policy 
 1976: Professionals within GIE structure launch prospective studies 
for complementary Airbus aircraft 
 1977: France prefers narrowbody for 150 pax, Germany a shorter 
widebody for 220 
 Airbus becomes a landmark 
59 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (4) 
 Airbus grows mature 
 1978: Launch of smaller A310 decided by partners 
 1978: Order of 23 A300 by U.S. operator enables international breakthrough 
 Immediate protective action (import tax) by the U.S. government 
 Mandate by EEC Council of foreign ministers to EEC Commissioner for 
Industrial Affairs Etienne Davignon to obtain cancellation of tax, failure 
 1979: international Aircraft Agreement within GATT framework 
 Airbus becomes a global issue 
60 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (5) 
 Airbus grows into a risk for U.S. competitors 
 1978: Boeing launches the B767 competitor to the A310 
 A310 maximises technology leaps (IT, CRT screens, manufacturing…) 
 September 1981: maiden flight of B767, 3rd April 1982 of A310 
 Both aircraft superior in different areas and representing two 
different mission profiles 
 Airbus changes competitor’s behaviour 
61 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (6) 
 New Airbus success despite U.S. Strategic Trade Policy favouring Boeing 
 1983: longer-range A310-300 launched, 9th June 1983: Updated A300, A300- 
600 maiden flight 
 2nd May 1984: Launch of A320 narrowbody for 150 passengers 
 Technology leaps and disruptions maximized 
 1985: New U.S. safety regulation allows transatlantic twin operations (ETOPS) 
 Boeing 767 with longer range favoured (financial instead of safety aspects) 
 Airbus takes the technology leadership 
62 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs (7) 
 In the meantime in the U.S. … Neoliberalism emerges 
 New economic paradigm emerges (Reagonomics, Thatcherism) 
 Focus on financial and no longer technological performance 
 Expenditure cutting at any price, including long-term R & D 
 Boeing adopts this paradigm under new management in 1985 
 All prospective programmes ended with exception of B777 widebody 
 Airbus takes the technology leadership 
63 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1970 - 1986: The Dedicated Entrepreneurs 
 Analysis 
 Difficulties to penetrate market since few early adopters 
 Programme portfolio aligned on future market needs 
 Despite opposed interests, governments find consensus 
 Focus on technological superiority 
64 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (1) 
 New attacks and successes 
 1986: U.S. claim Airbus subsidies violate 1979 Aircraft Agreement 
 1987: EEC Commissioner for Trade, Willy de Clerq, defends the Airbus 
programme 
 Transatlantic tensions, EEC claiming U.S. subsidies through military 
programmes 
 26th February 1988: Joint A320 certification by Dutch, French, West German 
and U.K. national certification bodies, world premiere 
 Attacks through technology and replies through politics 
65 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (2) 
 Steps to future successes 
 5th July 1987: Launch of A330 (2 engines) and A340 (four) 
 Maximized micro-Path Dependence (both aircraft 94 % compatible) 
 Maximized technology leaps for both 
 Airbus « Family Concept » through commonality (Cross Crew Qualification) 
 Both aircraft launched through reimbursable aids from member states 
 Long-term attack on U.S. competition 
66 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (3) 
 Airbus grows European 
 March 1988: European Parliament discusses Airbus 
 November 1989: launch of longer A321 narrowbody without subsidies 
 New production facility in Hamburg to complete Toulouse 
 7th October 1991: Roll-out of A340 quadrijet with European anthem 
 7th November 1992: Roll-out of A330 twinjet 
 Long-term attack on U.S. competition 
67 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (4) 
 The battle of the reports 
 September 1990: Gellman report compiled for U.S. Department of Commerce 
 Over 19 years, Airbus has received subsidies for USD 19 billion 
 No Airbus programme is economically viable 
 November 1991: Arnold & Porter report compiled for Airbus Industrie 
 Disproves Gellman report, U.S. manufacturers not commercial enterprises 
 From 1976-1990 (14 years) USD 15.24 billion through military and NASA research 
 It seems a matter of interpretation 
68 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (5) 
 The 1992 EEC – U.S. Airbus Accord (1) 
 Agreement negotiated between Brussels and Washington 
 Mutual exchange of financial statements to competent authority of other 
signatory entity (GIE Airbus member states for Boeing, U.S. government 
for Airbus) 
 Clause of exception: Saving a manufacturer from bankruptcy allowed 
 Clause of limitation: Financial support to new programmes not allowed 
 Again, a matter of interpretation and cheating 
69 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators (6) 
 The 1992 EEC – U.S. Airbus Accord (2) 
 Both sides make concessions on subsidies 
 Europe – Airbus: Limitation of public launch aids to 33 % of global budget 
of programme; official current interest rate on first 25 % of global amount; 
interest rate raised by 1 % on remaining 75 %, integral reimbursement by 
Airbus in 17 years maximum 
 U.S. – Boeing / McDonnell-Douglas: Limitation of indirect subsidies such as 
military and scientific programmes (NASA) to 4 % of global turnover of 
targeted manufacturer 
 Again, a matter of cheating and interpretation 
70 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1986 - 1992: The Audacious Innovators 
 Analysis 
 Pro-active attitude sets foundations for the future through 
systematic extension of portfolio 
 Competition gets nervous and obtains governmental 
support 
 All involved parties have no interest to escalate the conflict 
 Focus on technological superiority 
71 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (1) 
 New Airbus successes despite threat 
 March 1993: Maiden flight of A321 narrowbody 
 May 1993: Launch of smaller version of A320 for 130 passengers named A319 
 Assembled in Hamburg-Finkenwerder 
 June 1994: Boeing 777 Triple Seven twinjet maiden flight 
 U.S. ETOPS regulation extended to transpacific routes, leading to loss of 
comparative advantage of A340 qudrijet 
 U.S. Strategic Trade Policies in favour of own manufacturer 
72 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (2) 
 Airbus replies to threats 
 November 1995: launch of smaller A330-200 derivative 
 August 1996: Maiden flight, performance exceeds expectations 
 Boeing replies with inferior B767-400 derivative 
 Airbus outwits Boeing locked-in on the B777 
 Both A330 models become the reference in their category 
73 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (3) 
 1996: Beginning of global duopoly 
 15th December 1996: Boeing purchases McDonnell-Douglas 
 30th June 1997: European Commission accepts merger under 
conditions (civil activities of MDC kept independent for 10 years; 
annual report of civil activities to European Commission (97/816/EC) 
 1997: During French-German summit, decision to transform Airbus 
into full corporation 
 Boeing and Airbus switch to neoliberalism and privatization 
74 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (4) 
 Airbus reacts to intensified competition 
 December 1997: Boeing 777 Triple Seven countered by A340-600, larger 
derivative, and A340-500, quadrijet with longest range ever (18.000 km) 
 1999: Airbus Military subsidiary for military transporter A400M launched 
 NATO members Belgium, France, Germany, Italy, Spain, Turkey and U.K. 
order 180 for delivery after 2009; South Africa and Malaysia another 12 
 April 1999: Launch of A318 for 100 passengers without launch aids 
 Airbus consolidated technology leadership 
75 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (5) 
 The road to Airbus, Inc. 
 1999: Widespread discussion about Airbus as a private company 
 June 1999: French-German government preliminary agreement to 
establish European Defence and Space Company (EADS) 
 U.K. partner British Aerospace rejects integration 
 14th October 1999: Aérospatiale-Matra and Deutsche Aerospace (DASA), 
the Airbus partners of the time, merge into EADS 
 EADS remains a political issue 
76 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (6) 
 European Defence and Space Company (EADS) 
 Negotiated by parent companies of Airbus partners Largadère (Aérospatiale- 
Matra since 1998) and DaimlerChrysler (Deutsche Aerospace/DASA) 
 Largadère and DaimlerChrysler hold each 30 % of EADS (total 60 %) 
 Small corporate headquarters in the Netherlands for fiscal reasons 
 Two equivalent headquarters in Paris (strategic management) and Munich 
(operational management) 
 EADS becomes number two aerospace company after Boeing worldwide 
77 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (7) 
 Airbus Integrated Company 
 Established 23rd June 2000 as a subsidiary of EADS 
 80 % held by EADS; 20 % by British Aerospace (BAE) 
 EADS obliged to buy back BAE share at any time after 2003 (put 
option) 
 Production facilities, procedures and processes unchanged 
 Airbus followed the wave of privatizations 
78 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists (8) 
 Renewed vigor of Airbus 
 Summer 2000: The very large A380 attracts 95 initial orders 
 Airbus governments respect the Airbus Accord of 1992 and grand launch aids of 
USD 2.5 billion out of estimated USD 10.7 billion 
 U.S. government announces a World Trade Organization (WTO) complaint 
 April 2001: A340-600 maiden flight, February 2001: A340-500 maiden flight 
 January 2002: A318 maiden flight 
 Airbus followed the wave of privatizations 
79 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
1992 - 2001: The Visionary Strategists 
 Analysis 
 Victory of Airbus over one competitor (McDonnell-Douglas) 
thanks to aircraft family concept 
 Boeing remains successful despite lower commitment for its 
future owing to lower prices and existing customer base 
 EEC substitutes itself for the individual member states in Strategic 
Trade Policy formulation and implementation 
 Focus on technological superiority 
80 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (1) 
 The shock of the decade: Nine Eleven 
 Air transport hurt everywhere (recession and security procedures) 
 Boeing lays off 30.000 workers 
 Airbus reacts in a shortsighted way… und cuts prospective R & D 
expenditure 
 A380 complexity exceeds expectations by far 
 New Airbus attitude: short term focus 
81 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (2) 
 The situation of Boeing 
 Boeing 737 narrowbody outdated but cheaper than A320 series 
 Boeing 767 outperformed by A330-300 and A330-200 
 Boeing 747 Jumbo Jet challenged by A380 
 B777 Triple Seven with two engines outperforms A340 with four 
following U.S. Strategic Trade Policies in its favour (ETOPS) 
 Airbus remained confident in its Path Dependence 
82 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (3) 
 Boeing returns 
 New management ends short-term financial priorities and seizes « last 
chance for successful turnaround » 
 Boeing analyses potential for superiority over A330 and A340 
 Disruptive new aircraft B787 Dreamliner 
 Boeing maximizes technology leaps and disruptions (composites, comfort…) 
 Boeing copies decentralized Airbus system but outsources core competences 
 Airbus downplays the risk 
83 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (4) 
 Airbus imitates Boeing 
 2002: Airbus sets up engineering centre in Wichita/USA 
 2003: Airbus sets up engineering joint venture in Russia 
 2003: Airbus officially not worried about new bestselling competitor 
 September 2004: Airbus announces an optimized A330-300 as a reply 
 Airbus widely criticised for loss of strategic vision 
 Airbus management replies that customers are satisfied with A330 series 
 Airbus gets inert 
84 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (5) 
 2005: the tide turns 
 15th February: B777-200LR roll-out, range similar to A340-500 but lower cost of 
operation… enabled by further U.S. ETOPS regulation for twinjets 
 18th February: Reveal of A380 and announcement of three months delay 
 April: A380 and A350 launch aids incompatible with WTO for U.S. 
 27th April: A380 maiden flight with worldwide maximum coverage 
 May: new A380 delays announced 
 Airbus weakened – Boeing boosted 
85 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators (6) 
 Airbus in difficulties 
 6th October 2005: formal launch of A350 with 140 orders against 174 for the B787 
 November 2005: Boeing launches new B747-8 update which wins substantial orders 
 December 2005: Airbus sets up engineering facility in China 
 29th March 2006: International Society of Transport Aircraft Trading bashes the A350 
 April 2006: BAE sells its stake in Airbus – EADS is obliged to divert funds for it 
 July 2006: Scandal with alleged insider deals braks Airbus leadership 
 Airbus weakened – Boeing boosted 
86 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2001 - 2006: The Scared Money Cumulators 
 Analysis 
 Airbus copied Boeing’s short-term focus – and pays the price 
in full 
 Boeing wins back a long-term operational and strategic 
vision 
 Revolutionary A380 affected by management problems 
 Focus on technological superiority 
87 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (1) 
 Turnaround in sight? 
 17th July 2006: New A350XWB design presented at Farnborough 
Airshow 
 Wider fuselage than B787 and earlier Airbus widebodies 
 First reactions not too enthusiastic 
 Widespread scepticism whether Airbus is able to launch programme 
 Can Airbus recover? 
88 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (2) 
 Turnaround in sight? 
 4th September 2006: A380 test passengers enthusiastic 
 11th September 2006: Russian stake of 5.02 % in EADS 
 3rd October 2006: another 10 months delay for the A380 announced 
 10th October 2006: Christian Streiff, CEO of Airbus Integrated Company 
resigns 
 7th November 2006: Fedex order for ten A380 freighters cancelled 
 Can Airbus rise up again? 
89 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (3) 
 New worries or new opportunities 
 10th December 2006: launch of yet reworked A350XWB (materials…) 
 Market entry pushted back to 2013, 5 years behind B787 Dreamliner 
 Budget of at least USD 15 billion, making subsidies unavoidable 
 Main design freeze pushed back to 2008 to learn from the B787 
 12th December 2006: A380 certified by EU and U.S. agencies 
 The question remains open 
90 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (4) 
 New worries or new opportunities 
 January 2007: Boeing outsold Airbus for the first time in 5 years with 1044 against 790 net 
orders 
 10th January 2007: U.S. open a WTO case on subsidies to Airbus 
 9th February 2007: the EU files a WTO claim on indirect subsidies to Boeing 
 May 2007: the new joint Airbus/AVIC A320 plant in Tianjin/China is opened 
 Summer 2007: Airbus sets up engineering facility in Mobile/Alabama for the A350XWB 
 15th October 2007: first A380 delivered to Singapore Airlines 
 The question remains open 
91 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (5) 
 Will it never end? 
 28th February 2007: EADS Power 8 restructuration programme 
launched 
 4300 jobs cut in France, 3700 in Germany, 1600 in U.K., 400 in Spain 
 Summer 2007: Airbus is hit by the weak US Dollar 
 A350XWB to be assembled in Toulouse 
 Still, the question remains open 
92 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (6) 
 Towards a new beginning? 
 2009: Research on « Sharklet » wing extension for the narrowbodies launched 
 2010: Major narrowbody update rumoured 
 April 2010: A330-200 Freighter certified 
 Summer 2010: Airbus launches the Terminal Aerosave initiative for dismantling 
aircraft at the end of their life cycle 
 December 2010: Airbus A320 New Engine Option (NEO) combining sharklets, new 
engines and other optimizations launched for 2015 
 Still, the question remains open 
93 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (7) 
 Diversification into military activities 
 2009: Roll out of the A400M 
 2009: Multi Role Transport & Tanker (MRTT) becomes new standard 
in aerorefueling 
 2009: EADS / Martin/Marietta wins Pentagon contract over 179 
tankers 
 After Boeing claim, final contract awarded to Boeing in 2010 
 Aerospace remains a political issue 
94 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (8) 
 In the meantime… 
 Boeing runs into difficulties with the B787 « Delayedliner » 
 Lack of know how for complex project after decade-long cuts 
 Delay over delay... budget overruns of several billions 
 Airbus A350XWB runs into difficulties as well and gets delayed 
 Customers still criticise Airbus for not having « pushed the envelope » far enough 
 Meanwhile… composites are targeted for their long-term environmental damage 
 Are composites the quantum leap too much? 
95 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (9) 
 Outcomes 
 January 2011: 10.000th order (an A320 NEO) 
 June 2011: 667 gross orders for the A320 NEO at the Aérosalon de Paris 
representing USD 60.9 billion 
 July 2011: Sharklet devices tested for the first time 
 15th July: Lufthansa opens first experimental Airbus A320 biofuels service 
 2012: Beoing responds A320 NEO with B737 MAX 
 A new stalemate 
96 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The New Hard Workers (11) 
 Current situation 
 A320 NEO: The fastest selling aircraft programme in history 
 A330 twinjet: Continues to sell very well – major update for late 2012 rumoured 
 A340 quadrijet: End of production cycle earlier than expected 
 A380: sells slowly but permanently 
 A400M still plagued by problems 
 A330 MRTT remains niche product 
 New opportunities or old chances 
97 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
2006 - 2012: The Hard Workers 
 Analysis 
 Airbus slowly recovers but remains affected 
 Boeing underestimated complexities with B787 
 Airbus remains trapped in cost saving… and finds 
partially back to long term prospecting 
 Focus on technological superiority partially redeployed 
98 
AIRBUS 
The Airbus 
Case 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Classroom Incubation 3 
 What can corporations learn from Airbus 
 Discuss one type of corporation in groups for 10 minutes 
 Elaborate a coherent Site Optimization policy or decide against 
 Nominate a group representative 
 Share your findings with your colleagues 
 Be your own site optimizer 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
99 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
100 
Airbus? 
You said Airbus?
AIRBUS 
A Changing Framework: 
European Integration 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
AIRBUS 
A Changing Framework: 
European Integration 
Basics of territorial / geographical convergence 
 Economies of scale 
 Static gains owing to increased factor allocation 
 Dynamic gains owing to increased resource availability 
 Collateral gains such as leverage in negociations 
 Personal gains such as prestige 
 … yours to learn from 102 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to the European Union 
 Economic integration first, political convergence second 
 1948: Organization for European Economic Cooperation (OEEC) for Marshall Plan 
 1949: Council of Europe for scientific and political resource pooling 
 1950: Association of European Aircraft Manufacturers established 
 1951: European Coal and Steel Community (ECSC) to « denationalize » strategic 
industries 
 1955: European Civil Aviation Conference (ECAC) 
 Common challenges in several key fields 
103 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Institutions 
 The European Communities 
 1957: European Economic Communities (EEC) 
 1959: European Investment Bank (EIB) 
 1960: Eurocontrol for transeuropean air traffic control 
 1962: EEC becomes supranational in agriculture 
 1965: European Commission establishes the Politique de recherche scientifique et technique 
(PREST) 
 1966: EEC negociates the GATT Kennedy Round in its own right 
 From association to delegation 
104 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Policies 
 A new international actor emerges 
 1972: EEC and EFTA establish Committee on Scientific and Technological Cooperation 
(COST) 
 1972: Joint Aviation Authorities (JAA) for parallel aerospace and air transport 
certification 
 1974: EEC obtains UN Observer status 
 1974: The EEC contributes to the European Science Foundation (ESF) 
 1975: The Directorate General XII Research carries out the « Europe + 30 » research to 
to predict the future of Science & Technology in Europe 
 From delegation to adoption 
105 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Politics 
 A new international authority readies itself 
 1978: Common monetary policy 
 1979: First direct election of European Parliament 
 1980: Council Directive 80/1266 rules Air Accident Investigation 
 1984: First Framework Programme for scientific research 
 1985: French President Mitterrand launches the Eurêka technology initiative 
 From adoption to integration 
106 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Visions 
 A new international actor enters the scene 
 1985: White Paper on Single European Market by 1992 
 1986: Single European Act aligns national foreign policies 
 1987: European Airworthiness Authorities standardize air operations 
 1990: Joint Aviation Authorities (JAA) established 
 1990: Schengen Agreement abolishes frontiers 
 From integration to takeover 
107 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Programmes 
 A new international actor enters the scene 
 1992: Maastricht Treaty transfers national political prerogatives to the European Union (EU) 
 1993: Single European Market launched 
 1996: Beginnings of the Single European Sky initiative 
 1996: European Commission suggets to consolidate the European aerospace industry as the 
only way to resist U.S. competition (Com(97) 466 final) 
 1997: European Association of Aerospace Industries (AECMA) launches the European 
Integrated Aeronautics Programme (EIAP) 
 2001: Euro introduced as the European currency 
 From takeover to association 
108 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Road to European Leadership 
 A new supranational entity gets active 
 2001: Experts claim in « Vision 2020 » as an answer to the European Commissioner for 
Research that Europe can take the lead in aerospace 
 2001: Aerospace actors establish the Advisory Council for Aeronautics Research in 
Europe (ACARE) 
 2002: European Air Safety Agency (EASA) established (EC Regulation 1592/2002) 
 2003: Commission Regulation on aircraft certification (CR 1702/2002 
 2004: European Commission launches Single European Sky ATM (SESAR) to merge 
aerospace technology and air traffic management and procedures 
 From assimilation to responsibility 
109 
AIRBUS 
A Changing Framework: 
European Integration 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
A Changing Framework: 
European Integration 
Towards a European Crisis? 
 A new supranational entity gets active 
 2004: European Constitution rejected by referendum 
 2005: European Union Emissions Trade Scheme (EU ETS) targets air transport 
 2007: Europe hit by financial crisis 
 2009: Recession and beginnings of the Euro crisis 
 2011: European Financial Stabilization Mechanism and European Financial Stability 
Facility 
 2012: European Union Emissions Trade Scheme (EU ETS) launched 
 From responsibilities to burden 110 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Classroom Incubation 4 
 What do you think about the European integration 
 Compare three influences in groups for 10 minutes 
 Elaborate a coherent profile for one sector 
 Nominate a group representative 
 Share your findings with your colleagues 
 Be your own integrator 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
111 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
112 
Airbus? 
You said Airbus?
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th March 2012 
Reims - France 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
Examples 
 Four representative projects 
 How Airbus fights competitors 
 A business strategy 
 How the Airbus A380 came into being 
 Example of a complex project management 
 The ongoing match 
 Airbus A320 Neo versus Boeing 737 
 The open next round 
 The Boeing B787 versus the Airbus A350 XWB 
 … yours to learn from 
114 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
How Airbus Fights Competitors (1) 
 An integral strategy… 
 Maximize technology leaps as long as adequate 
 Right timing in respect to futured air transport demand 
 Product differentiation through complementarity 
 Long term vision in technology and customer response 
 Customer lock-in through Path Dependence 
 … based on superiority 
115 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Airbus Challenges based on Porter 
Potential Entrants 
Threat of new 
competitors (RU, BR, TJ) 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
116 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Cortez (2010), p.76 
Strategic 
Risks 
for AIRBUS 
Industry Competitors 
Rivalry among 
existing firms (Boeing) 
Buyers 
Bargaining power of 
customers (airlines) 
Substitutes 
Threat of substitute 
products (ICE…) 
Suppliers 
Bargaining power of 
suppliers (engines) 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism
Statistics of a Success Story 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
117 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Cortez (2010), p.76 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism
The Airbus Challenges based on Porter 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
118 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Cortez (2010), p.76 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism
How the A380 came into being (1) 
 Maximized disruptions without « ripping the envelope »… 
 Product elaboration with all aspects in mind 
 Maximized innovations within existing Path Dependence 
 Creating a new product category 
 Maximized Marketing Hype 
 Customer lock-in through Path Dependence 
 … as a way to minimize risks 
119 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
A380 implementation and Risk Centered Approach 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
120 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Cortez (2010), p.76 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism
A380 implementation and Risk Centered Approach 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
121 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Cortez (2010), p.76 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
How the A380 came into being (2) 
 Challenges encountered and overcome 
 Exponential complexity of product, manufacturing and 
development 
 Budget overflows in times of expenditure cutting 
 Management problems unrelated to properties of aircraft 
 Negative dynamics of management problems 
 … yours to learn from exponential complexity 122 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Open Next Round: B787 versus A350 XWB (1) 
 Challenges overcome and pushed aside? 
 Boeing 787 posed challenge 
 Airbus hit by recession and during short-term economies 
 Minimized response in the A350 based on A330 family 
 Customers wanted a strong Airbus to avoid Boeing monopoly 
 Airbus half heatedly yielded to customers (situation of monopoly) 
 Airbus has to learn again 
123 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
Risk Taking In Innovation 
New Product 
B787 / A350 XWB 
New way of 
Distribution 
Disruptive Marketing 
Source: Author based on Cortez (2010), p.278-291, Murdick, et.al. (1989), p.177-201, and Hampton (2009), p.81-94 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
124 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
New technology 
Many disruptions 
New way of 
Manufacturing 
Composites 
R I S K
The Open Next Round: B787 versus A350 XWB (2) 
 Challenges still underestimated 
 Airbus A350XWB attempts to leapfrog the B787 
 Programme attempts to learn from technology leap 
 Airbus still wants to minimize cost 
 Customers are deceived and try to obtain more 
 Boeing has chance to « shoot down » A350 XWB through B777 upgrade 
 Will Airbus learn the lesson? 
125 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Successful Match A320 NEO versus B737 MAX (1) 
 Airbus dominates the upcoming cycle 
 Fastest selling aircraft family in history with 1400 orders in 1.5 years 
 Extrapolation of proven existing design 
 Technological updates 
 No disruption, therefore Micro-Path Dependence fully maintained 
 First major product overhaul 
 Boeing has difficulties to follow 
 … yours to learn from 
126 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
The BCG Product Portfolio applied to Airbus 
Question Marks (A380) Stars (Airbus Narrowbodies) 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
127 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Krogerus et al. (2008), pp.14-15 
Relative 
Marketshare 
Growth in Market 
High 
High 
Low 
Low 
Dogs (A350 XWB) Cash Cows (A330)
The Successful Match A320 NEO versus B737 MAX (2) 
 Airbus dominates the upcoming cycle 
 Fastest selling aircraft family in history with 1400 orders in 1.5 years 
 Extrapolation of proven existing design 
 Technological updates 
 No disruption, therefore Micro-Path Dependence fully maintained 
 First major product overhaul 
 … yours to learn from 
128 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
The Successful Match A320 NEO versus B737 MAX (3) 
 Boeing in the meantime 
 B737 far older than A320 
 B737 far more difficult to upgrade – but no monopoly wanted 
 Other constraints (landing gear lower than A320), limiting engine 
options 
 Pressure on cost of R & D 
 May run into difficulties 
129 
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012
AIRBUS 
The World Around Everything: 
Globalization and Neoliberalism 
Classroom Incubation 5 
 What do you think about these programmes 
 Adopt one of them for your industry 
 Elaborate a coherent Site Optimization policy or decide against 
 Nominate a group representative 
 Share your findings with your colleagues 
 Be your own programme manager 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
130 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
131 
Airbus? 
You said Airbus?
AIRBUS 
Looks into the 
Future as a Conclusion 
Human Resources and Organization 
Prof. Dr. Edgar Bellow 
13th February 2012 
Dr. Daniel Stanislaus Martel 
Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher 
Education, and AKAD Banking & Finance, Zurich and Berne 
Aerospace Journalist & Editor/Consultant
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (1) 
 Some examples 
 New competitors 
 Technology leaps and disruptions 
 Alternative fuels 
 Future raw materials demand and supply 
 Yours to think about them 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
133 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (2) 
 New Competitors 
 Russia and China make efforts in Strategic Trade Policies 
 Massive investments 
 Winning trust by customers 
 Airbus and Boeing well-established (common interest) 
 Fundamental disruptions impossible 
 … yours to learn from 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
134 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
The Vernon International Product Life Cyce 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
135 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Source: Author based on Graf (2002), p.23 
AIRBUS 
Looks into the 
Future for a Conclusion
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (2) 
 Technology leaps and disruptions 
 Widebodies: ongoing potential for optimizations 
 Narrowbodies: disruptive potential limited owing to operational 
constraints 
 New materials and technologies of limited impact on short haul aircraft 
 Aircraft remain compromises following systemic lock-ins (infrastructure!) 
 From reality to dream 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
136 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (3) 
 Alternative fuels 
 Global air transport fuel demand counts for 3.4 % of world oil 
consumption 
 Efficiency gains of jet engines some 40 % over the last 50 years 
 Leverage gains (ATC, flight management, ground procedures…) largely 
untapped (potential at least another 40 % savings) 
 On-board storage, refueling and safety issues 
 … yours to learn from 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
137 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (4) 
 Alternative fuels 
 Hydrogen too disruptive 
 Biofuels more promising but energy yield lower 
 Biofuels not more ecological if overall picture in mind 
 Solar energy and electricity out of the question 
 Integral research to be continued 
 Beware of illusions 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
138 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
AIRBUS 
Looks into the 
Future for a Conclusion 
Open Questions (6) 
 Future raw materials demand and supply 
 Ecological approaches do not reduce demand for critical raw 
materials 
 Quantities lowered owing to better engineering 
 Depending on technologies adopted (LED diodes, displays, 
materials…) 
 Air transport remains marginal in overall resource use 
 … yours to learn from 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
139 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
The Look into the Future 
Prognoses 
Pro-jections 
Short Distance into the Future Long 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
140 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Low High 
Source: Author based on Graf (2002), p.23 
Scenarios Expectations 
Wishes 
Hope 
Reliability 
AIRBUS 
Looks into the 
Future for a Conclusion
The Future As It Will Most Probably Be 
Prognoses 
Pro-jections 
Short Distance into the Future Long 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
141 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012 
Low High 
Source: Author based on Graf (2002), p.23 
Scenarios Expectations 
Wishes 
Hope 
Wild-card 
Wild-card 
Wild-card 
Wild-card 
Wild-card 
Black 
Swan 
Black 
Swan 
Reliability 
AIRBUS 
Looks into the 
Future for a Conclusion
AIRBUS 
The World of Air Transport 
Demand: Operators / Supply: Airframers 
Classroom Incubation 6 
 What do you think about the Airbus case 
 Discuss in groups for 10 minutes 
 Elaborate an overall conclusions 
 Nominate a group representative 
 Share your findings with your colleagues 
 The floor is yours 
© Dr. Daniel Stanislaus Martel Human Resources and Organization 
142 
dmartel@bluewin.ch 
Professeur Dr. Edgar Bellow 
www.danstanmart.com 
13th February 2012
143 
Airbus? 
You said Airbus?
144 
Qs and attempts of As 
 « ? » 
 « !! » 
Human Resources and Organization 
Professeur Dr. Edgar Bellow 
13th February 2012 
© Dr. Daniel Stanislaus Martel 
dmartel@bluewin.ch 
www.danstanmart.com

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The Airbus Program - National Champions, European Project, Global Player

  • 1. AIRBUS From the National Champions and the European Project to the Global Player Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 2. 2 AIRBUS? You said Airbus? Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012 Source: Skyward.ch © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com
  • 3. 3 AIRBUS? You said Airbus? Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012 Source: Skyward.ch © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com
  • 4. 4 AIRBUS? You said Airbus? Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012 Source: Skyward.ch © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com
  • 5. What do You Know About Airbus?  Please help  Discuss for five minutes in groups  Nominate a representative  Report to your colleagues in one minute  The floor is yours 5 AIRBUS? You said Airbus? Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com
  • 6. 6 Airbus? You said Airbus?
  • 7. Facts about Airbus  Airbus is…  Number one in civil airframe orders (1419) and delivies (524) in 2012  Known as an economic venture with market share of 64 % in 2012  Considered a prime technology driver  Presented as a European success story with 11.570 orders and 7079 del.  Renown as a Global Player with 6659 aircraft in service  … yours to learn from 7 AIRBUS? That’s Airbus! © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 8. Agenda  Airbus in it’s world  The world of air transport (demand: operators / supply: airframers)  Aerospace as a strategic industry  The Airbus Case  A changing framework: European integration (optional)  The world around everything: Globalization and Neoliberalism  Looks into the future  Many case studies 8 AIRBUS? That’s Airbus! © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 9. AIRBUS? That’s Airbus! Learning Objectives  After our course, you are able to…  … outline the historical agenda of the Airbus programme  … explain at least three major influences on the Airbus programme  … apply at least three concepts to your own operations  … it is up to you! 9 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 10. Why is this Important for You?  As a future Reims Management School Graduate, You…  … need to be aware of possible roles of stakeholders in economics  … need to be aware of the importance of a long term vision translated into decisions  … need to be aware of the role of technology in economics  … it is up to you! 10 AIRBUS? That’s Airbus! © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 11. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 12. The World of Air Transport  Three clusters of actors  Aircraft operators in demand for airframes  Airports / ground facilities which serve aircraft operators  Airframe constructors which supply airframes  Perfectly complementary… and highly regarded / regulated 12 AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 13. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Aircraft Operators (1)  An industry set for growth (source IATA)  Annual USD 425 billion turnover (2010)  5.5 million direct jobs, adding up to 33 millions (2010)  Some 2.5 billion customers (2010)  Relevant for everybody © Dr. Daniel Stanislaus Martel Human Resources and Organization 13 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 14. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Aircraft Operators (2)  A highly fragile industry with high risk operations  Pressure on margins and cost at any step  Highly know how, and experience sensitive  High political exposure, positive and negative (ecologism)  Vulnerable to externalities (recession, fuel price…)  Gigants on argyle feet © Dr. Daniel Stanislaus Martel Human Resources and Organization 14 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 15. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airports / Ground Facilities  Interface air transport  Technical/functional monopoly at served destination  Next to perfect competition for transfer / transit passengers  Facilitator / focus of local economic development  Entry / exit door for national economy  Essential for the country © Dr. Daniel Stanislaus Martel Human Resources and Organization 15 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 16. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (1)  Economic actors supplying the hardware  High value adding industry attracting the best brains  High cost for R & D and overheads  High drive for innovation in a prospective perspective  High concentration owing to competition  Essential for the country © Dr. Daniel Stanislaus Martel Human Resources and Organization 16 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 17. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (2)  Their product: airframes  Numerous physical, mathematical, functional constraints Maximum drive for economic efficiency Maximum need for Risk Management at any level  Very little space for product differentiation © Dr. Daniel Stanislaus Martel Human Resources and Organization 17 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 18. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (3)  Fundamentals of airframes  Product life cycles of 20 to 40 years (second hand market)  High degree of technological and contractual lock-ins  Sensitive to « correct » timing of market entry  Each programme is high risk owing to competitor’s life cycle  A high risk business! © Dr. Daniel Stanislaus Martel Human Resources and Organization 18 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 19. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (4)  Technology drive behind airframes  Attempt to « leapfrog » competitor  Attempt to override locked-in competitors  Race for early commitments  High degree of customer lock-in (change of supplier)  A high stake business © Dr. Daniel Stanislaus Martel Human Resources and Organization 19 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 20. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (5)  New products…  Anticipate market need and foreseeable competitor’s reactions  Use currently available technologies  Always major compromises in technology and functionality  Focused on as many customers as possible  … always have a wider economic, technological, social context © Dr. Daniel Stanislaus Martel Human Resources and Organization 20 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 21. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (6)  Launch of new airframes  Gain of productivity for current and future customers Maximize difficulties for competitors to catch up Maximize barriers for market entry for new competitor  Response to expected tomorrows © Dr. Daniel Stanislaus Martel Human Resources and Organization 21 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 22. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Airframe manufacturers (7)  Strategic partnership with operators  Complex financial operations  Standalone airframe or first member of aircraft family  Stepstone to further aircraft models  Look into the future every day © Dr. Daniel Stanislaus Martel Human Resources and Organization 22 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 23. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Classroom Incubation 1  What government policies are adequate for air transport  Conceptualize such a policy in groups for 10 minutes  Elaborate a global national air transport policy  Nominate a group representative  Share your findings with your colleagues  Build your own air transport future © Dr. Daniel Stanislaus Martel Human Resources and Organization 23 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 24. 24 Airbus? You said Airbus?
  • 25. AIRBUS Aerospace as a Strategic Industry Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 26. AIRBUS Aerospace as a Strategic Industry What is Industry?  Industry is a value-adding economic activity  Supply of physical goods  Contributing to local development  Strengthening national economy  Raising standard of living of producers and customers © Dr. Daniel Stanislaus Martel Human Resources and Organization 26 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 27. AIRBUS Aerospace as a Strategic Industry Attitudes of Industrial Actors  Best possible factor allocation  Providing responses to felt and anticipated needs  Drive to outpace competition Making best possible use of factors of production  Inventions and expected innovation processes © Dr. Daniel Stanislaus Martel Human Resources and Organization 27 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 28. AIRBUS Aerospace as a Strategic Industry The Product Cycle Integration into society © Dr. Daniel Stanislaus Martel Human Resources and Organization 28 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Market penetration Invention of product or service Approval by decision makers Convince pioneers Advantages felt by others Invention generalizes in market Invention becomes part of society Response to a need felt Win promotors for the «cause» Target customers sharing the same need as the inventors Solution responds to or exceeds expectations Solution offers real gain in productivity Solution leads to new attitudes Author based on Alter (2002), 15-40
  • 29. AIRBUS Aerospace as a Strategic Industry The Two Types of Innovation  Proactive invention and reactive learning by experience  Voluntary innovation: ambition to optimize  Involuntary innovation: attempt to correct failure  In both cases: accepted or rejected by society  In any case there are multiple changes © Dr. Daniel Stanislaus Martel Human Resources and Organization 29 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 30. AIRBUS Aerospace as a Strategic Industry The State in the Economy Management of territory under its jurisdiction  Formal institutions governing population and activities  Elites try to optimize situation for re-election  Elites promote their interest within and outside state  Role of state has not ended with globalization © Dr. Daniel Stanislaus Martel Human Resources and Organization 30 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 31. AIRBUS Aerospace as a Strategic Industry The Two Level Game (Putnam) National Territory International System Supreme Authority Legal entity/actor © Dr. Daniel Stanislaus Martel Human Resources and Organization 31 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Author based on Putnam (1993), 431-468 GOVERNMENT National policies, among them economic policies including application of international agreements, compliance with international regimes… Objective: Optimize national territory as a production site International relations through diplomacy, international governmental organizations (WTO), trade agreements, regional integration (EU)… Objective: Maximize trade-offs for national economy
  • 32. AIRBUS Aerospace as a Strategic Industry Strategic Industries  Crucial for state and economy as a whole  Worldwide demand (pharmaceuticals, energy systems…)  Unsubstituable, therefore inelastic demand  Complex and specialized know-how intensive processes  Necessary for economy (energy) and state (security)  Strategic suppliers are in a situation of monopoly © Dr. Daniel Stanislaus Martel Human Resources and Organization 32 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 33. AIRBUS Aerospace as a Strategic Industry Sensitivity and Vulnernability (Keohane and Nye) Other Country National Territory Other Country G O V Economic Policies Economic Policies Economic Policies © Dr. Daniel Stanislaus Martel Human Resources and Organization 33 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Author based on Keohane and Nye (1989) G O V E C O G O V E C O E C O
  • 34. AIRBUS Aerospace as a Strategic Industry Strategic Trade Policies (Krugman)  Prevent vulnerabilities – lower sensitivities  Policies target already strong strategic industries  Mixture of national economic and technology policies  Mixture of international initiatives in favour of national industries  Related policies (higher education, research, immigration)  Not to be confused with classical protectionism © Dr. Daniel Stanislaus Martel Human Resources and Organization 34 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 35. AIRBUS Aerospace as a Strategic Industry The Technology Leap (Mokyr) © Dr. Daniel Stanislaus Martel Human Resources and Organization 35 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Author based on Krugman (Mokyr (1993), 431-468
  • 36. AIRBUS Aerospace as a Strategic Industry The Challenge: Path Dependence (Krugman)  Heritage, present and future of a production site  Site configuration result of all past decision’s outcomes  Each decision cost-benefit based on site configuration at its time  Strengths depend on commitments by decision makers  The stronger Path Dependence, the higher lock-in  Chance or risk © Dr. Daniel Stanislaus Martel Human Resources and Organization 36 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 37. AIRBUS Aerospace as a Strategic Industry The Chance: The Technology Leap (Mokyr)  Revolutionary invention leading to fundamental change  Innovation creates a disruption (plastics, mobile phone…)  Opportunity to establish new Micro- / Macro-Path Dependences  Strategic Trade Policies seize opportunities (Silicon Valley)  High Risk versus High Reward (Question Mark in BCG Portfolio)  Breaking the lock-in © Dr. Daniel Stanislaus Martel Human Resources and Organization 37 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 38. AIRBUS Aerospace as a Strategic Industry STP and P.D. in Practice: Site Optimization  Past, present and future focus on Strategic Industries  Close cooperation between all involved actors  National policies focused on R & D, S & T, higher education…  International policies targeted at maximized trade offs  Objective: strenghten Strategic Industries © Dr. Daniel Stanislaus Martel Human Resources and Organization 38 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 39. AIRBUS Aerospace as a Strategic Industry Site Optimization (Keohane and Nye) Other Country National Territory Other Country G O V Economic Policies E C O G O V Economic Policies Author based on Keohane and Nye (1989), Krugman (1996), Krugman (1994) Economic Policies © Dr. Daniel Stanislaus Martel Human Resources and Organization 39 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 G O V E C O E C O
  • 40. AIRBUS Aerospace as a Strategic Industry The International Product Life Cycle (Vernon) © Dr. Daniel Stanislaus Martel Human Resources and Organization 40 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Author based on www.provenmodels.com Time Benefits Exports / Influence Losses /Invest Imports / R & D New Prod Mature Product Standardized Product Competing similar country Inventor’s country Technologically leading country Emerging country Technological emancipation Rising cost of production
  • 41. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Classroom Incubation 2  What do you think about Site Optimization  Discuss one sector per group for 10 minutes  Elaborate a coherent Site Optimization policy or decide against  Nominate a group representative  Share your findings with your colleagues  Be your own site optimizer © Dr. Daniel Stanislaus Martel Human Resources and Organization 41 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 42. 42 Airbus? You said Airbus?
  • 43. AIRBUS The Airbus Case Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 44. Stages of Airbus History  A long, international history from the beginning  1920 – 1965: Setting the stage  1965 – 1970: The National Champions  1970 – 1986: The dedicated entrepreneurs  1986 – 1992: The audacious innovators  1992 – 2001: The visionary strategists  2001 – 2006: The scared money makers  2004 – 2012: The new hard workers  What does this mean? 44 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 45. 1920 – 1965: Setting the Stage (1)  Europe: Site Optimizations for Strategic Industries  Europe until 1939: Airframers are national programmes  After 1945: Competition between France and United Kingdom continued  1949: United Kingdom delivers first jet aircraft Comet 1 which fails owing to overstretched technology leaps  1955: France launches Caravelle jet which fails on the market  Technology is not everything 45 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 46. 1920 – 1965: Setting the Stage (2)  United States: Free enterprise  United States until 1939: Airframers are private corporations  After 1945: Eased market entry through mass production and Marshall Plan  1958: Monopolies through large quadrijets Boeing 707 and Douglas DC-8  1964: First of a series of smaller jets Boeing 727 to swamp the world market  Market strategy is everything 46 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 47. 1920 – 1965: Setting the Stage (3)  World air transport: towards unlimited growth  1965: Boeing announces quantum leap with Boeing 747 Jumbo Jet widebody  1966 - 1967: Lockheed and McDonnell-Douglas announce smaller widebodies Tristar and DC-10  Common characteristics (two aisles, containerized cargo) leading to technological disruption (technology leap)  Revolution in air transport announced for 1970 - 1972  Market strategy is everything 47 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 48. 1920 – 1965: Setting the Stage (4)  Europe: Cooperation to protect strategic industry of aerospace  1959: France / West Germany: State treaty for the Transall transporter  1962: Industrial cooperation Netherlands, U.K., West Germany for the Fokker F-28  1965: Industrial and commercial cooperation West Germany, U.K., Netherlands for the VFW-614  All programmes remain marginal in the world market  New idea: enable economies of scale 48 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 49. 1920 – 1965: Setting the Stage (5)  The political breakthrough: the Concorde  1962: State treaty between France and the U.K. for supersonic aircraft  French motivations: Additional resources for national leadership programme  U.K. motivations: Maintain strategic industry, obtaining adhesion to EEC despite Charles de Gaulle’s veto  National motivations around common denominator  1969: Maiden flight, 1975 commercial service, 2006 withdrawn from use  Concorde: masterpiece of technology, commercial disaster 49 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 50. 1920 – 1965: Setting the Stage  Analysis  Lacking economies of scale put European airframers at disadvantage despite technological superiority  Transnational programmes as new way to sustain national Strategic Trade Policies  U.S. dominate world market through mass production  The American Challenge / Le défi américain 50 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 51. 1965 – 1970: The National Champions (1)  The wake up call  1965: Colloquium of London on future of airframing in Europe  Window of opportunity following new category of widebody aircraft  Only chance: transnational cooperation for economies of scale  20th July 1967: Governmental treaty between France, Western Germany and the U.K. on the Airbus A300  Defend national aerospace through transnational cooperation 51 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 52. 1965 – 1970: The National Champions (2)  National Strategic Trade Policies  France: new large-scale national high tech project  United Kingdom: preserve remaining Strategic Industries  West Germany: Opportunity to show European commitment and to relaunch aerospace industry  Common denominators – different orientations 52 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 53. 1965 – 1970: The National Champions (3)  Common denominator remains minimal  March 1969: U.K. withdraws from state treaty while remaining a subcontractor  29th May 1969: State treaty between France and West Germany launching the multinational Airbus programme  18th December 1970: Groupement d’intérêt économique (GIE) Airbus established for programme coordination  Partners of GIE Airbus: French Aérospatiale 46,7 %, Deutsche Airbus 46,7 %, West Germany/Netherlands VFW-Fokker 4,2 %, joined by Spanish CASA 4.2 %  European Investment Bank grants launch aids ; financing and manufacturing remains the full responsibility of the partners  Increased economies of scale 53 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 54. 1965 – 1970: The National Champions (4)  Maximized opportunities  Aircraft A300 widebody complementary to U.S. competitors  Aircraft compatible with other widebodies being marketed, thus joining a new category of aircraft  Proven technologies in new combinations  National facilities specialized in one component, integration in Toulouse  Airbus enables to join the U.S. competitors 54 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 55. AIRBUS Aerospace as a Strategic Industry The Transnational Airbus System © Dr. Daniel Stanislaus Martel Human Resources and Organization 55 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Kracht (1994), p.56
  • 56. 1965 - 1970: The National Champions  Analysis  Focus on coming technology leap as the last chance for national aerospace industries  Complementary product for same market  Economies of scale through specialization of facilities  Transition of the U.S. competitors exploited 56 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 57. 1970 - 1986: The Dedicated Entrepreneurs (1)  Modest beginnings  9th November 1971: First firm order by Air France for 6  28th October 1972: Maiden flight of the A300, 33 days before contractual date  Performance and cost of operation exceeded expectations  Sales very difficult owing to lack of trust and experience  Supported by pioneers and early adopters 57 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 58. 1970 - 1986: The Dedicated Entrepreneurs (2)  Chances, threats and renewed chances  Main chance: Complementary to U.S. widebodies  1974 – 1975: Recession, not one sale  Tensions between France and West Germany regarding action  After 1975: Argument of low fuel consumption decisive  Stakeholders believe in project 58 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 59. 1970 - 1986: The Dedicated Entrepreneurs (3)  Airbus becomes a political issue  1975: EEC Commissioner Altiero Spinelli suggests European aerospace policy  1976: Professionals within GIE structure launch prospective studies for complementary Airbus aircraft  1977: France prefers narrowbody for 150 pax, Germany a shorter widebody for 220  Airbus becomes a landmark 59 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 60. 1970 - 1986: The Dedicated Entrepreneurs (4)  Airbus grows mature  1978: Launch of smaller A310 decided by partners  1978: Order of 23 A300 by U.S. operator enables international breakthrough  Immediate protective action (import tax) by the U.S. government  Mandate by EEC Council of foreign ministers to EEC Commissioner for Industrial Affairs Etienne Davignon to obtain cancellation of tax, failure  1979: international Aircraft Agreement within GATT framework  Airbus becomes a global issue 60 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 61. 1970 - 1986: The Dedicated Entrepreneurs (5)  Airbus grows into a risk for U.S. competitors  1978: Boeing launches the B767 competitor to the A310  A310 maximises technology leaps (IT, CRT screens, manufacturing…)  September 1981: maiden flight of B767, 3rd April 1982 of A310  Both aircraft superior in different areas and representing two different mission profiles  Airbus changes competitor’s behaviour 61 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 62. 1970 - 1986: The Dedicated Entrepreneurs (6)  New Airbus success despite U.S. Strategic Trade Policy favouring Boeing  1983: longer-range A310-300 launched, 9th June 1983: Updated A300, A300- 600 maiden flight  2nd May 1984: Launch of A320 narrowbody for 150 passengers  Technology leaps and disruptions maximized  1985: New U.S. safety regulation allows transatlantic twin operations (ETOPS)  Boeing 767 with longer range favoured (financial instead of safety aspects)  Airbus takes the technology leadership 62 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 63. 1970 - 1986: The Dedicated Entrepreneurs (7)  In the meantime in the U.S. … Neoliberalism emerges  New economic paradigm emerges (Reagonomics, Thatcherism)  Focus on financial and no longer technological performance  Expenditure cutting at any price, including long-term R & D  Boeing adopts this paradigm under new management in 1985  All prospective programmes ended with exception of B777 widebody  Airbus takes the technology leadership 63 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 64. 1970 - 1986: The Dedicated Entrepreneurs  Analysis  Difficulties to penetrate market since few early adopters  Programme portfolio aligned on future market needs  Despite opposed interests, governments find consensus  Focus on technological superiority 64 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 65. 1986 - 1992: The Audacious Innovators (1)  New attacks and successes  1986: U.S. claim Airbus subsidies violate 1979 Aircraft Agreement  1987: EEC Commissioner for Trade, Willy de Clerq, defends the Airbus programme  Transatlantic tensions, EEC claiming U.S. subsidies through military programmes  26th February 1988: Joint A320 certification by Dutch, French, West German and U.K. national certification bodies, world premiere  Attacks through technology and replies through politics 65 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 66. 1986 - 1992: The Audacious Innovators (2)  Steps to future successes  5th July 1987: Launch of A330 (2 engines) and A340 (four)  Maximized micro-Path Dependence (both aircraft 94 % compatible)  Maximized technology leaps for both  Airbus « Family Concept » through commonality (Cross Crew Qualification)  Both aircraft launched through reimbursable aids from member states  Long-term attack on U.S. competition 66 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 67. 1986 - 1992: The Audacious Innovators (3)  Airbus grows European  March 1988: European Parliament discusses Airbus  November 1989: launch of longer A321 narrowbody without subsidies  New production facility in Hamburg to complete Toulouse  7th October 1991: Roll-out of A340 quadrijet with European anthem  7th November 1992: Roll-out of A330 twinjet  Long-term attack on U.S. competition 67 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 68. 1986 - 1992: The Audacious Innovators (4)  The battle of the reports  September 1990: Gellman report compiled for U.S. Department of Commerce  Over 19 years, Airbus has received subsidies for USD 19 billion  No Airbus programme is economically viable  November 1991: Arnold & Porter report compiled for Airbus Industrie  Disproves Gellman report, U.S. manufacturers not commercial enterprises  From 1976-1990 (14 years) USD 15.24 billion through military and NASA research  It seems a matter of interpretation 68 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 69. 1986 - 1992: The Audacious Innovators (5)  The 1992 EEC – U.S. Airbus Accord (1)  Agreement negotiated between Brussels and Washington  Mutual exchange of financial statements to competent authority of other signatory entity (GIE Airbus member states for Boeing, U.S. government for Airbus)  Clause of exception: Saving a manufacturer from bankruptcy allowed  Clause of limitation: Financial support to new programmes not allowed  Again, a matter of interpretation and cheating 69 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 70. 1986 - 1992: The Audacious Innovators (6)  The 1992 EEC – U.S. Airbus Accord (2)  Both sides make concessions on subsidies  Europe – Airbus: Limitation of public launch aids to 33 % of global budget of programme; official current interest rate on first 25 % of global amount; interest rate raised by 1 % on remaining 75 %, integral reimbursement by Airbus in 17 years maximum  U.S. – Boeing / McDonnell-Douglas: Limitation of indirect subsidies such as military and scientific programmes (NASA) to 4 % of global turnover of targeted manufacturer  Again, a matter of cheating and interpretation 70 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 71. 1986 - 1992: The Audacious Innovators  Analysis  Pro-active attitude sets foundations for the future through systematic extension of portfolio  Competition gets nervous and obtains governmental support  All involved parties have no interest to escalate the conflict  Focus on technological superiority 71 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 72. 1992 - 2001: The Visionary Strategists (1)  New Airbus successes despite threat  March 1993: Maiden flight of A321 narrowbody  May 1993: Launch of smaller version of A320 for 130 passengers named A319  Assembled in Hamburg-Finkenwerder  June 1994: Boeing 777 Triple Seven twinjet maiden flight  U.S. ETOPS regulation extended to transpacific routes, leading to loss of comparative advantage of A340 qudrijet  U.S. Strategic Trade Policies in favour of own manufacturer 72 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 73. 1992 - 2001: The Visionary Strategists (2)  Airbus replies to threats  November 1995: launch of smaller A330-200 derivative  August 1996: Maiden flight, performance exceeds expectations  Boeing replies with inferior B767-400 derivative  Airbus outwits Boeing locked-in on the B777  Both A330 models become the reference in their category 73 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 74. 1992 - 2001: The Visionary Strategists (3)  1996: Beginning of global duopoly  15th December 1996: Boeing purchases McDonnell-Douglas  30th June 1997: European Commission accepts merger under conditions (civil activities of MDC kept independent for 10 years; annual report of civil activities to European Commission (97/816/EC)  1997: During French-German summit, decision to transform Airbus into full corporation  Boeing and Airbus switch to neoliberalism and privatization 74 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 75. 1992 - 2001: The Visionary Strategists (4)  Airbus reacts to intensified competition  December 1997: Boeing 777 Triple Seven countered by A340-600, larger derivative, and A340-500, quadrijet with longest range ever (18.000 km)  1999: Airbus Military subsidiary for military transporter A400M launched  NATO members Belgium, France, Germany, Italy, Spain, Turkey and U.K. order 180 for delivery after 2009; South Africa and Malaysia another 12  April 1999: Launch of A318 for 100 passengers without launch aids  Airbus consolidated technology leadership 75 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 76. 1992 - 2001: The Visionary Strategists (5)  The road to Airbus, Inc.  1999: Widespread discussion about Airbus as a private company  June 1999: French-German government preliminary agreement to establish European Defence and Space Company (EADS)  U.K. partner British Aerospace rejects integration  14th October 1999: Aérospatiale-Matra and Deutsche Aerospace (DASA), the Airbus partners of the time, merge into EADS  EADS remains a political issue 76 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 77. 1992 - 2001: The Visionary Strategists (6)  European Defence and Space Company (EADS)  Negotiated by parent companies of Airbus partners Largadère (Aérospatiale- Matra since 1998) and DaimlerChrysler (Deutsche Aerospace/DASA)  Largadère and DaimlerChrysler hold each 30 % of EADS (total 60 %)  Small corporate headquarters in the Netherlands for fiscal reasons  Two equivalent headquarters in Paris (strategic management) and Munich (operational management)  EADS becomes number two aerospace company after Boeing worldwide 77 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 78. 1992 - 2001: The Visionary Strategists (7)  Airbus Integrated Company  Established 23rd June 2000 as a subsidiary of EADS  80 % held by EADS; 20 % by British Aerospace (BAE)  EADS obliged to buy back BAE share at any time after 2003 (put option)  Production facilities, procedures and processes unchanged  Airbus followed the wave of privatizations 78 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 79. 1992 - 2001: The Visionary Strategists (8)  Renewed vigor of Airbus  Summer 2000: The very large A380 attracts 95 initial orders  Airbus governments respect the Airbus Accord of 1992 and grand launch aids of USD 2.5 billion out of estimated USD 10.7 billion  U.S. government announces a World Trade Organization (WTO) complaint  April 2001: A340-600 maiden flight, February 2001: A340-500 maiden flight  January 2002: A318 maiden flight  Airbus followed the wave of privatizations 79 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 80. 1992 - 2001: The Visionary Strategists  Analysis  Victory of Airbus over one competitor (McDonnell-Douglas) thanks to aircraft family concept  Boeing remains successful despite lower commitment for its future owing to lower prices and existing customer base  EEC substitutes itself for the individual member states in Strategic Trade Policy formulation and implementation  Focus on technological superiority 80 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 81. 2001 - 2006: The Scared Money Cumulators (1)  The shock of the decade: Nine Eleven  Air transport hurt everywhere (recession and security procedures)  Boeing lays off 30.000 workers  Airbus reacts in a shortsighted way… und cuts prospective R & D expenditure  A380 complexity exceeds expectations by far  New Airbus attitude: short term focus 81 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 82. 2001 - 2006: The Scared Money Cumulators (2)  The situation of Boeing  Boeing 737 narrowbody outdated but cheaper than A320 series  Boeing 767 outperformed by A330-300 and A330-200  Boeing 747 Jumbo Jet challenged by A380  B777 Triple Seven with two engines outperforms A340 with four following U.S. Strategic Trade Policies in its favour (ETOPS)  Airbus remained confident in its Path Dependence 82 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 83. 2001 - 2006: The Scared Money Cumulators (3)  Boeing returns  New management ends short-term financial priorities and seizes « last chance for successful turnaround »  Boeing analyses potential for superiority over A330 and A340  Disruptive new aircraft B787 Dreamliner  Boeing maximizes technology leaps and disruptions (composites, comfort…)  Boeing copies decentralized Airbus system but outsources core competences  Airbus downplays the risk 83 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 84. 2001 - 2006: The Scared Money Cumulators (4)  Airbus imitates Boeing  2002: Airbus sets up engineering centre in Wichita/USA  2003: Airbus sets up engineering joint venture in Russia  2003: Airbus officially not worried about new bestselling competitor  September 2004: Airbus announces an optimized A330-300 as a reply  Airbus widely criticised for loss of strategic vision  Airbus management replies that customers are satisfied with A330 series  Airbus gets inert 84 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 85. 2001 - 2006: The Scared Money Cumulators (5)  2005: the tide turns  15th February: B777-200LR roll-out, range similar to A340-500 but lower cost of operation… enabled by further U.S. ETOPS regulation for twinjets  18th February: Reveal of A380 and announcement of three months delay  April: A380 and A350 launch aids incompatible with WTO for U.S.  27th April: A380 maiden flight with worldwide maximum coverage  May: new A380 delays announced  Airbus weakened – Boeing boosted 85 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 86. 2001 - 2006: The Scared Money Cumulators (6)  Airbus in difficulties  6th October 2005: formal launch of A350 with 140 orders against 174 for the B787  November 2005: Boeing launches new B747-8 update which wins substantial orders  December 2005: Airbus sets up engineering facility in China  29th March 2006: International Society of Transport Aircraft Trading bashes the A350  April 2006: BAE sells its stake in Airbus – EADS is obliged to divert funds for it  July 2006: Scandal with alleged insider deals braks Airbus leadership  Airbus weakened – Boeing boosted 86 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 87. 2001 - 2006: The Scared Money Cumulators  Analysis  Airbus copied Boeing’s short-term focus – and pays the price in full  Boeing wins back a long-term operational and strategic vision  Revolutionary A380 affected by management problems  Focus on technological superiority 87 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 88. 2006 - 2012: The New Hard Workers (1)  Turnaround in sight?  17th July 2006: New A350XWB design presented at Farnborough Airshow  Wider fuselage than B787 and earlier Airbus widebodies  First reactions not too enthusiastic  Widespread scepticism whether Airbus is able to launch programme  Can Airbus recover? 88 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 89. 2006 - 2012: The New Hard Workers (2)  Turnaround in sight?  4th September 2006: A380 test passengers enthusiastic  11th September 2006: Russian stake of 5.02 % in EADS  3rd October 2006: another 10 months delay for the A380 announced  10th October 2006: Christian Streiff, CEO of Airbus Integrated Company resigns  7th November 2006: Fedex order for ten A380 freighters cancelled  Can Airbus rise up again? 89 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 90. 2006 - 2012: The New Hard Workers (3)  New worries or new opportunities  10th December 2006: launch of yet reworked A350XWB (materials…)  Market entry pushted back to 2013, 5 years behind B787 Dreamliner  Budget of at least USD 15 billion, making subsidies unavoidable  Main design freeze pushed back to 2008 to learn from the B787  12th December 2006: A380 certified by EU and U.S. agencies  The question remains open 90 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 91. 2006 - 2012: The New Hard Workers (4)  New worries or new opportunities  January 2007: Boeing outsold Airbus for the first time in 5 years with 1044 against 790 net orders  10th January 2007: U.S. open a WTO case on subsidies to Airbus  9th February 2007: the EU files a WTO claim on indirect subsidies to Boeing  May 2007: the new joint Airbus/AVIC A320 plant in Tianjin/China is opened  Summer 2007: Airbus sets up engineering facility in Mobile/Alabama for the A350XWB  15th October 2007: first A380 delivered to Singapore Airlines  The question remains open 91 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 92. 2006 - 2012: The New Hard Workers (5)  Will it never end?  28th February 2007: EADS Power 8 restructuration programme launched  4300 jobs cut in France, 3700 in Germany, 1600 in U.K., 400 in Spain  Summer 2007: Airbus is hit by the weak US Dollar  A350XWB to be assembled in Toulouse  Still, the question remains open 92 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 93. 2006 - 2012: The New Hard Workers (6)  Towards a new beginning?  2009: Research on « Sharklet » wing extension for the narrowbodies launched  2010: Major narrowbody update rumoured  April 2010: A330-200 Freighter certified  Summer 2010: Airbus launches the Terminal Aerosave initiative for dismantling aircraft at the end of their life cycle  December 2010: Airbus A320 New Engine Option (NEO) combining sharklets, new engines and other optimizations launched for 2015  Still, the question remains open 93 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 94. 2006 - 2012: The New Hard Workers (7)  Diversification into military activities  2009: Roll out of the A400M  2009: Multi Role Transport & Tanker (MRTT) becomes new standard in aerorefueling  2009: EADS / Martin/Marietta wins Pentagon contract over 179 tankers  After Boeing claim, final contract awarded to Boeing in 2010  Aerospace remains a political issue 94 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 95. 2006 - 2012: The New Hard Workers (8)  In the meantime…  Boeing runs into difficulties with the B787 « Delayedliner »  Lack of know how for complex project after decade-long cuts  Delay over delay... budget overruns of several billions  Airbus A350XWB runs into difficulties as well and gets delayed  Customers still criticise Airbus for not having « pushed the envelope » far enough  Meanwhile… composites are targeted for their long-term environmental damage  Are composites the quantum leap too much? 95 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 96. 2006 - 2012: The New Hard Workers (9)  Outcomes  January 2011: 10.000th order (an A320 NEO)  June 2011: 667 gross orders for the A320 NEO at the Aérosalon de Paris representing USD 60.9 billion  July 2011: Sharklet devices tested for the first time  15th July: Lufthansa opens first experimental Airbus A320 biofuels service  2012: Beoing responds A320 NEO with B737 MAX  A new stalemate 96 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 97. 2006 - 2012: The New Hard Workers (11)  Current situation  A320 NEO: The fastest selling aircraft programme in history  A330 twinjet: Continues to sell very well – major update for late 2012 rumoured  A340 quadrijet: End of production cycle earlier than expected  A380: sells slowly but permanently  A400M still plagued by problems  A330 MRTT remains niche product  New opportunities or old chances 97 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 98. 2006 - 2012: The Hard Workers  Analysis  Airbus slowly recovers but remains affected  Boeing underestimated complexities with B787  Airbus remains trapped in cost saving… and finds partially back to long term prospecting  Focus on technological superiority partially redeployed 98 AIRBUS The Airbus Case © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 99. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Classroom Incubation 3  What can corporations learn from Airbus  Discuss one type of corporation in groups for 10 minutes  Elaborate a coherent Site Optimization policy or decide against  Nominate a group representative  Share your findings with your colleagues  Be your own site optimizer © Dr. Daniel Stanislaus Martel Human Resources and Organization 99 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 100. 100 Airbus? You said Airbus?
  • 101. AIRBUS A Changing Framework: European Integration Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 102. AIRBUS A Changing Framework: European Integration Basics of territorial / geographical convergence  Economies of scale  Static gains owing to increased factor allocation  Dynamic gains owing to increased resource availability  Collateral gains such as leverage in negociations  Personal gains such as prestige  … yours to learn from 102 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 103. The Road to the European Union  Economic integration first, political convergence second  1948: Organization for European Economic Cooperation (OEEC) for Marshall Plan  1949: Council of Europe for scientific and political resource pooling  1950: Association of European Aircraft Manufacturers established  1951: European Coal and Steel Community (ECSC) to « denationalize » strategic industries  1955: European Civil Aviation Conference (ECAC)  Common challenges in several key fields 103 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 104. The Road to European Institutions  The European Communities  1957: European Economic Communities (EEC)  1959: European Investment Bank (EIB)  1960: Eurocontrol for transeuropean air traffic control  1962: EEC becomes supranational in agriculture  1965: European Commission establishes the Politique de recherche scientifique et technique (PREST)  1966: EEC negociates the GATT Kennedy Round in its own right  From association to delegation 104 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 105. The Road to European Policies  A new international actor emerges  1972: EEC and EFTA establish Committee on Scientific and Technological Cooperation (COST)  1972: Joint Aviation Authorities (JAA) for parallel aerospace and air transport certification  1974: EEC obtains UN Observer status  1974: The EEC contributes to the European Science Foundation (ESF)  1975: The Directorate General XII Research carries out the « Europe + 30 » research to to predict the future of Science & Technology in Europe  From delegation to adoption 105 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 106. The Road to European Politics  A new international authority readies itself  1978: Common monetary policy  1979: First direct election of European Parliament  1980: Council Directive 80/1266 rules Air Accident Investigation  1984: First Framework Programme for scientific research  1985: French President Mitterrand launches the Eurêka technology initiative  From adoption to integration 106 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 107. The Road to European Visions  A new international actor enters the scene  1985: White Paper on Single European Market by 1992  1986: Single European Act aligns national foreign policies  1987: European Airworthiness Authorities standardize air operations  1990: Joint Aviation Authorities (JAA) established  1990: Schengen Agreement abolishes frontiers  From integration to takeover 107 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 108. The Road to European Programmes  A new international actor enters the scene  1992: Maastricht Treaty transfers national political prerogatives to the European Union (EU)  1993: Single European Market launched  1996: Beginnings of the Single European Sky initiative  1996: European Commission suggets to consolidate the European aerospace industry as the only way to resist U.S. competition (Com(97) 466 final)  1997: European Association of Aerospace Industries (AECMA) launches the European Integrated Aeronautics Programme (EIAP)  2001: Euro introduced as the European currency  From takeover to association 108 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 109. The Road to European Leadership  A new supranational entity gets active  2001: Experts claim in « Vision 2020 » as an answer to the European Commissioner for Research that Europe can take the lead in aerospace  2001: Aerospace actors establish the Advisory Council for Aeronautics Research in Europe (ACARE)  2002: European Air Safety Agency (EASA) established (EC Regulation 1592/2002)  2003: Commission Regulation on aircraft certification (CR 1702/2002  2004: European Commission launches Single European Sky ATM (SESAR) to merge aerospace technology and air traffic management and procedures  From assimilation to responsibility 109 AIRBUS A Changing Framework: European Integration © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 110. AIRBUS A Changing Framework: European Integration Towards a European Crisis?  A new supranational entity gets active  2004: European Constitution rejected by referendum  2005: European Union Emissions Trade Scheme (EU ETS) targets air transport  2007: Europe hit by financial crisis  2009: Recession and beginnings of the Euro crisis  2011: European Financial Stabilization Mechanism and European Financial Stability Facility  2012: European Union Emissions Trade Scheme (EU ETS) launched  From responsibilities to burden 110 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 111. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Classroom Incubation 4  What do you think about the European integration  Compare three influences in groups for 10 minutes  Elaborate a coherent profile for one sector  Nominate a group representative  Share your findings with your colleagues  Be your own integrator © Dr. Daniel Stanislaus Martel Human Resources and Organization 111 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 112. 112 Airbus? You said Airbus?
  • 113. AIRBUS The World Around Everything: Globalization and Neoliberalism Human Resources and Organization Prof. Dr. Edgar Bellow 13th March 2012 Reims - France Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 114. Examples  Four representative projects  How Airbus fights competitors  A business strategy  How the Airbus A380 came into being  Example of a complex project management  The ongoing match  Airbus A320 Neo versus Boeing 737  The open next round  The Boeing B787 versus the Airbus A350 XWB  … yours to learn from 114 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 115. How Airbus Fights Competitors (1)  An integral strategy…  Maximize technology leaps as long as adequate  Right timing in respect to futured air transport demand  Product differentiation through complementarity  Long term vision in technology and customer response  Customer lock-in through Path Dependence  … based on superiority 115 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 116. The Airbus Challenges based on Porter Potential Entrants Threat of new competitors (RU, BR, TJ) © Dr. Daniel Stanislaus Martel Human Resources and Organization 116 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Cortez (2010), p.76 Strategic Risks for AIRBUS Industry Competitors Rivalry among existing firms (Boeing) Buyers Bargaining power of customers (airlines) Substitutes Threat of substitute products (ICE…) Suppliers Bargaining power of suppliers (engines) AIRBUS The World Around Everything: Globalization and Neoliberalism
  • 117. Statistics of a Success Story © Dr. Daniel Stanislaus Martel Human Resources and Organization 117 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Cortez (2010), p.76 AIRBUS The World Around Everything: Globalization and Neoliberalism
  • 118. The Airbus Challenges based on Porter © Dr. Daniel Stanislaus Martel Human Resources and Organization 118 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Cortez (2010), p.76 AIRBUS The World Around Everything: Globalization and Neoliberalism
  • 119. How the A380 came into being (1)  Maximized disruptions without « ripping the envelope »…  Product elaboration with all aspects in mind  Maximized innovations within existing Path Dependence  Creating a new product category  Maximized Marketing Hype  Customer lock-in through Path Dependence  … as a way to minimize risks 119 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 120. A380 implementation and Risk Centered Approach © Dr. Daniel Stanislaus Martel Human Resources and Organization 120 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Cortez (2010), p.76 AIRBUS The World Around Everything: Globalization and Neoliberalism
  • 121. A380 implementation and Risk Centered Approach © Dr. Daniel Stanislaus Martel Human Resources and Organization 121 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Cortez (2010), p.76 AIRBUS The World Around Everything: Globalization and Neoliberalism
  • 122. AIRBUS The World Around Everything: Globalization and Neoliberalism How the A380 came into being (2)  Challenges encountered and overcome  Exponential complexity of product, manufacturing and development  Budget overflows in times of expenditure cutting  Management problems unrelated to properties of aircraft  Negative dynamics of management problems  … yours to learn from exponential complexity 122 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 123. The Open Next Round: B787 versus A350 XWB (1)  Challenges overcome and pushed aside?  Boeing 787 posed challenge  Airbus hit by recession and during short-term economies  Minimized response in the A350 based on A330 family  Customers wanted a strong Airbus to avoid Boeing monopoly  Airbus half heatedly yielded to customers (situation of monopoly)  Airbus has to learn again 123 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 124. AIRBUS The World Around Everything: Globalization and Neoliberalism Risk Taking In Innovation New Product B787 / A350 XWB New way of Distribution Disruptive Marketing Source: Author based on Cortez (2010), p.278-291, Murdick, et.al. (1989), p.177-201, and Hampton (2009), p.81-94 © Dr. Daniel Stanislaus Martel Human Resources and Organization 124 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 New technology Many disruptions New way of Manufacturing Composites R I S K
  • 125. The Open Next Round: B787 versus A350 XWB (2)  Challenges still underestimated  Airbus A350XWB attempts to leapfrog the B787  Programme attempts to learn from technology leap  Airbus still wants to minimize cost  Customers are deceived and try to obtain more  Boeing has chance to « shoot down » A350 XWB through B777 upgrade  Will Airbus learn the lesson? 125 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 126. The Successful Match A320 NEO versus B737 MAX (1)  Airbus dominates the upcoming cycle  Fastest selling aircraft family in history with 1400 orders in 1.5 years  Extrapolation of proven existing design  Technological updates  No disruption, therefore Micro-Path Dependence fully maintained  First major product overhaul  Boeing has difficulties to follow  … yours to learn from 126 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 127. AIRBUS The World Around Everything: Globalization and Neoliberalism The BCG Product Portfolio applied to Airbus Question Marks (A380) Stars (Airbus Narrowbodies) © Dr. Daniel Stanislaus Martel Human Resources and Organization 127 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Krogerus et al. (2008), pp.14-15 Relative Marketshare Growth in Market High High Low Low Dogs (A350 XWB) Cash Cows (A330)
  • 128. The Successful Match A320 NEO versus B737 MAX (2)  Airbus dominates the upcoming cycle  Fastest selling aircraft family in history with 1400 orders in 1.5 years  Extrapolation of proven existing design  Technological updates  No disruption, therefore Micro-Path Dependence fully maintained  First major product overhaul  … yours to learn from 128 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 129. The Successful Match A320 NEO versus B737 MAX (3)  Boeing in the meantime  B737 far older than A320  B737 far more difficult to upgrade – but no monopoly wanted  Other constraints (landing gear lower than A320), limiting engine options  Pressure on cost of R & D  May run into difficulties 129 AIRBUS The World Around Everything: Globalization and Neoliberalism © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012
  • 130. AIRBUS The World Around Everything: Globalization and Neoliberalism Classroom Incubation 5  What do you think about these programmes  Adopt one of them for your industry  Elaborate a coherent Site Optimization policy or decide against  Nominate a group representative  Share your findings with your colleagues  Be your own programme manager © Dr. Daniel Stanislaus Martel Human Resources and Organization 130 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 131. 131 Airbus? You said Airbus?
  • 132. AIRBUS Looks into the Future as a Conclusion Human Resources and Organization Prof. Dr. Edgar Bellow 13th February 2012 Dr. Daniel Stanislaus Martel Lecturer at University of Management, Economics and Finance, Geneva, Dunya Institute of Higher Education, and AKAD Banking & Finance, Zurich and Berne Aerospace Journalist & Editor/Consultant
  • 133. AIRBUS Looks into the Future for a Conclusion Open Questions (1)  Some examples  New competitors  Technology leaps and disruptions  Alternative fuels  Future raw materials demand and supply  Yours to think about them © Dr. Daniel Stanislaus Martel Human Resources and Organization 133 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 134. AIRBUS Looks into the Future for a Conclusion Open Questions (2)  New Competitors  Russia and China make efforts in Strategic Trade Policies  Massive investments  Winning trust by customers  Airbus and Boeing well-established (common interest)  Fundamental disruptions impossible  … yours to learn from © Dr. Daniel Stanislaus Martel Human Resources and Organization 134 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 135. The Vernon International Product Life Cyce © Dr. Daniel Stanislaus Martel Human Resources and Organization 135 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Source: Author based on Graf (2002), p.23 AIRBUS Looks into the Future for a Conclusion
  • 136. AIRBUS Looks into the Future for a Conclusion Open Questions (2)  Technology leaps and disruptions  Widebodies: ongoing potential for optimizations  Narrowbodies: disruptive potential limited owing to operational constraints  New materials and technologies of limited impact on short haul aircraft  Aircraft remain compromises following systemic lock-ins (infrastructure!)  From reality to dream © Dr. Daniel Stanislaus Martel Human Resources and Organization 136 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 137. AIRBUS Looks into the Future for a Conclusion Open Questions (3)  Alternative fuels  Global air transport fuel demand counts for 3.4 % of world oil consumption  Efficiency gains of jet engines some 40 % over the last 50 years  Leverage gains (ATC, flight management, ground procedures…) largely untapped (potential at least another 40 % savings)  On-board storage, refueling and safety issues  … yours to learn from © Dr. Daniel Stanislaus Martel Human Resources and Organization 137 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 138. AIRBUS Looks into the Future for a Conclusion Open Questions (4)  Alternative fuels  Hydrogen too disruptive  Biofuels more promising but energy yield lower  Biofuels not more ecological if overall picture in mind  Solar energy and electricity out of the question  Integral research to be continued  Beware of illusions © Dr. Daniel Stanislaus Martel Human Resources and Organization 138 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 139. AIRBUS Looks into the Future for a Conclusion Open Questions (6)  Future raw materials demand and supply  Ecological approaches do not reduce demand for critical raw materials  Quantities lowered owing to better engineering  Depending on technologies adopted (LED diodes, displays, materials…)  Air transport remains marginal in overall resource use  … yours to learn from © Dr. Daniel Stanislaus Martel Human Resources and Organization 139 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 140. The Look into the Future Prognoses Pro-jections Short Distance into the Future Long © Dr. Daniel Stanislaus Martel Human Resources and Organization 140 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Low High Source: Author based on Graf (2002), p.23 Scenarios Expectations Wishes Hope Reliability AIRBUS Looks into the Future for a Conclusion
  • 141. The Future As It Will Most Probably Be Prognoses Pro-jections Short Distance into the Future Long © Dr. Daniel Stanislaus Martel Human Resources and Organization 141 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012 Low High Source: Author based on Graf (2002), p.23 Scenarios Expectations Wishes Hope Wild-card Wild-card Wild-card Wild-card Wild-card Black Swan Black Swan Reliability AIRBUS Looks into the Future for a Conclusion
  • 142. AIRBUS The World of Air Transport Demand: Operators / Supply: Airframers Classroom Incubation 6  What do you think about the Airbus case  Discuss in groups for 10 minutes  Elaborate an overall conclusions  Nominate a group representative  Share your findings with your colleagues  The floor is yours © Dr. Daniel Stanislaus Martel Human Resources and Organization 142 dmartel@bluewin.ch Professeur Dr. Edgar Bellow www.danstanmart.com 13th February 2012
  • 143. 143 Airbus? You said Airbus?
  • 144. 144 Qs and attempts of As  « ? »  « !! » Human Resources and Organization Professeur Dr. Edgar Bellow 13th February 2012 © Dr. Daniel Stanislaus Martel dmartel@bluewin.ch www.danstanmart.com