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The Commercial Aircraft Industry Between Airbus Boeing Marketing Essay

The Commercial Aircraft Industry Between Airbus Boeing Marketing Essay

Published: 23rd March, 2015 Last Edited: 23rd March, 2015

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The Boeing Company is a major American aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001. Boeing is made up of multiple business units, which are Boeing Commercial Airplanes; Boeing Defense, Space & Security; Engineering, Operations & Technology; Boeing Capital; and Boeing Shared Services Group (Porter, 1980).

Boeing is the largest global aircraft manufacturer by revenue, orders and deliveries, and the third largest aerospace and defense contractor in the world based on defense-related revenue. Boeing is the largest exporter by value in the United States. Its stock is a component of the Dow Jones Industrial Average.

Airbus initially began making of aircraft in the early 1970s with substantial financial assistance from European governments. Airbus became successful in making inroads into many of Boeing's markets. (Zaheer, 2001).

Research Aims & Objectives

The main aim of the research proposal is to analyze the competition between Boeing and Airbus as well as their prospects over next few years.

Competition Analysis

The competition between the A350 and the Boeing 787 developed especially in end of 2005 when Boeing had 87 orders for the 787 only while Airbus received 174 orders and commitments for the A350.The field sales competition is marked by the 747, 777, 787, the A300, A330, A340 and A350, all able of trans-ocean flights; and of late, the 767, is also capable of international service (Fahey, L. 1999). The A380 faces intercontinental able for single aisle Boeing 737s and 757s.Airbus combines the A330 and A340 categories when comparing sales with the 777 and thus in 2005 Airbus' sold 79 of these group compared to Boeing that sold 154 (McDougall, 2001).

The widebody market implies that price rising are constant with 5 percent rise in the marginal cost of production after the financial support cuts. The introduction of the A-380 by Airbus had impact on the prices and market shares of Boeing 747. The A-380 has a significant negative outcome on the prices and sales of the 747 within the wide-body sell. This end result shows that as Airbus and Boeing get bigger their product line over occasion, profit maximization by multi-product firms becomes more difficult as demand for a firm's existing models is aware of the price and characteristics of its new models.

The market for aircraft divided into two product groups namely narrow-body and

wide-body aircraft. Narrow-body aircraft are single aisle, short-range aircraft up to 6,000 km, these usually carry between 100 to 200 passengers. The top aircraft in this category are the Boeing 737, the Boeing 757, and the Airbus A-320. Wide-body aircraft are double aisle, medium to long-range aircraft up to 14,000 km these usually carry between 200 to 450 passengers. The top aircraft in this category are the Boeing 747, the Boeing 777, and the Airbus A-300 (Lioukas, 2000). In the wide-body market, aircraft also differ significantly in terms of their features according to whether they are intended for serving the medium range for example, Boeing 767, the Airbus A-300 and A-310, DC-10, and L-1011 or long-range marketplace for example, Boeing 747 and 777, the Airbus A-330 and A-340, and the MD-11. Therefore the competition is more extreme within each category than between them.

The decade between 2000 and 2009 Airbus received 6,452 orders, while Boeing received 5,927. Airbus had higher deliveries between 2003 and 2009, but fell slightly short of Boeing's deliveries, delivering 3,810 aircraft compared to Boeing's 3,950. The competition is strong, and each company has frequently accused the other of receiving unfair state aid from their respective governments (Gillespie. 2007).

Comparison by size

The widebody 747-8, the newest adjustment of Boeing's largest airliner, is in direct competition on long-haul routes with the A380. Airlines are seeking large passenger airliners, the two have been inclined as competitors on different occurrences.

Competition by outsourcing

Boeing and Airbus take advantage of subcontracting production of aircraft components to manufacturers in countries strategically important in order to expand competitive advantage. Boeing opened longstanding relationships with Japanese suppliers for example Mitsubishi Heavy Industries and Kawasaki Heavy Industries by which these companies have growing association on successive Boeing jet programs (Khermouch, G.,2001). This process has helped Boeing to attain nearly total dominance of the Japanese market for commercial jets. Airbus has fewer opportunities to outsource significant parts of its production beyond its own European plants. Though in 2009 Airbus opened an assembly plant in Tianjin, China for production of its A320 series airliners

Competition through technology

One of the ways Airbus competed with Boeing in the 1970s was through the introduction of advanced technology. The A300 made the most wide-ranging use of combination materials by automating the flight engineer's functions. This was the first large commercial jet to have a two-man flight crew. In the 1980s Airbus was the first to introduce digital fly-by-wire controls into an airliner (the A320).The Boeing 787 is determined be the first large airliner to use composites for most of its construction (Deephouse, 1999).

Competition by product Range overlap

The A380, is considerably bigger than the B747 while the A350 XWB competes with the high end of the B787 and the low end of the B777. The A320 is bigger than the 737-700 but smaller than the 737-800. The A321 is bigger than the B737-900 but smaller than the previous B757-200. The A330-200 competes with the smaller B767-300ER. Airlines use this as an advantage since there is more complete product range from 100 seats to 500 seats than if both companies offered identical aircraft. (Chi, 1999).

Market Analysis

There are less product lines in wide-body division of the market, and the number of aircraft sold is much smaller than in narrow-body division. The collective production of the best selling wide-body Boeing 747 attained about 1,185 units in 1998 and the greatest selling Airbus aircraft A300 sold only 481 units between 1974 and 1998. This competition tends to be more intense in wide body market because each additional sale generates valuable revenue (Khermouch, 2001). In dissimilarity, narrow-body planes often sell well above 1,000 units over their lifetime, with Boeing 737 selling over 3,200 units until 1998.

In 2003 Airbus defeated Boeing to become the world's best-selling aircraft maker, a position it retained in 2008. It delivered a record 483 aircraft, beating Boeing, which sold 375. Airbus sold planes worth US$100bn in 2008, giving it a marketplace share of 54%. In January 2009, Airbus had total orders for 3,715 jets, which would have taken six years to clear, Boeing had 3,700 orders. The two aircraft giants are locked in a disagreement over allegation that they are each getting commercial aircraft subsidies (Nixon, 1999).

Swot Analysis

Airbus capacity flights of the new A380 can give Boeing competition for the high traffic markets. Boeing narrow body aircrafts are a weak point that cannot compete with Airbus A320 in the market. Boeing system of lean manufacturing is not able to beat Airbus. Boeing needs to apply a customer-oriented approach rather than in a product-driven manner (Mustoe, 2010).

Boeing is widebody aircraft where there is potential for large profits. Boeing has large prospects in space while Airbus is simply a commercial aircraft manufacturer.

Airbus beats Boeing with the single-aisle aircraft like the A320. The A320 it alot better than the 757-200. Boeing beats Airbus in the Wide-body aircraft but the A340-500 can beat the 747-400 because of the A340-500 range. The Boeing 777-200 /-300 is excellent aircraft made and Airbus cannot compete with this aircraft.

Technological Developments

Boeing 787 Dreamliner can cut fuel use by 20%, because of the new engines, and the use of lightweight composite materials. While Airbus A380, is a long-haul aircraft and consumes less than three liters of fuel per passenger over 100km. The A380's efficiency and advanced technology result in 15-20% lower seat-mile costs than those of Boeing aircraft. Fuel-efficient engines and the use of advanced composite materials play a vital role in reducing the A380's operating costs (Kalnins, A. 2001).

Future analysis

The 787-9 will be the first variant of the 787 with a prolonged fuselage, seating 250-290 in three classes with a range 14,800 to 15,750 km. This variation diverges from the 787-8 in a number of ways which includes structural strengthening, a lengthened fuselage, a higher fuel capacity and a higher maximum take-off weight. The targeted date for entry into service is planned for 2010 and is scheduled for early 2013.

Airbus prospects

Over the next two decades, Boeing anticipates China to spend $400 billion to purchase 3,770 planes from manufacturers, making China second in size only to the combined market of the U.S. and Canada.

The Chinese market is rising fast, Airbus is poised to gain the greatest benefit winning far more orders than Boeing, which finds itself a target in a nasty war of words. Chinese airlines have in recent times placed orders for 358 Airbus planes and have options for another 14 more.

Prospects in Japan

Boeing has dominated the market however Airbus is stepping up marketing of its A380 super jumbo jet by teaming up with several Japanese firms in joint production of aircraft parts and components (Bhagwat, 2008).

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Other articles

Boeing Aircraft Is An American Company For Airspace Marketing Essay

Boeing Aircraft Is An American Company For Airspace Marketing Essay

Published: 23rd March, 2015 Last Edited: 23rd March, 2015

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

This research proposal analyses international competition in the commercial aircraft industry between Airbus-Boeing. It estimates a separate choice; differentiated products demand system for aircraft and look at the Airbus-Boeing rivalry under various hypotheses on firm conduct.

Boeing Aircraft is an American company for airspace and Defense Corporation. It was established in 1916 by William E. Boeing in Seattle, Washington. Boeing has stretched over years, assimilating with McDonnell Douglas in 1997 (Gillespie, 2007). Boeing Corporate control center has been in Chicago, Illinois from 2001. Boeing is made up of several business components, which are Boeing Commercial Airplanes; Boeing Defense, Space and Security; Engineering, Operations & Technology; Boeing Capital; and Boeing Shared Services Group (Porter, 1980).

Boeing is the biggest worldwide airplane producer by returns, orders and deliveries, and the third major aerospace and defense service provider in the globe found on defense-related income. Boeing is the main exporter by worth in the United States. Its reserve is a constituent of the Dow Jones Industrial Average.

Airbus Aircraft

The Airbus corporation originally began manufacture of aircraft in the near the beginning 1970s with extensive monetary aid from European administration. Airbus became victorious in building inroads into many of Boeing's marketplace (Zaheer, 2001).

Research Aims & Objectives

The main aim of the research proposal is to analyze the competition between Boeing and Airbus as well as their prospects over next few years.

Competition Analysis

The competition between the A350 and the Boeing 787 developed especially in end of 2005 when Boeing had 87 orders for the 787 only while Airbus received 174 orders and commitments for the A350.The field sales competition is marked by the 747, 777, 787, the A300, A330, A340 and A350, all able of trans-ocean flights; and of late, the 767, is also capable of international service (Fahey, L. 1999). The A380 faces intercontinental able for single aisle Boeing 737s and 757s.Airbus combines the A330 and A340 categories when comparing sales with the 777 and thus in 2005 Airbus' sold 79 of these group compared to Boeing that sold 154 (McDougall, 2001).

The widebody market implies that price rising are constant with 5 percent increase in the subsidiary charge of manufacture after the financial support cuts. The introduction of the A-380 by Airbus had impact on the prices and market shares of Boeing 747. The A-380 has a significant negative outcome on the value and retailing of the 747 within the wide-body sell. This end result shows that as Airbus and Boeing get bigger their product line over occasion, income maximization by multi-product companies becomes more complicated as requirement for a firm's existing representation is aware of the price and distinctiveness of its innovative models (Gillespie, 2007).

The market for aircraft divided into two product groups namely narrow-body and Wide-body plane. Narrow-body airplane are sole aisle, short-range aircraft up to 6,000 km, these usually carry 100 to 200 passengers. The top plane in this group is the Boeing 737, the Boeing 757, and the Airbus A-320. Wide-body airplanes are twice over aisle, medium to long-range plane up to 14,000 km these usually carry between 200 to 450 passengers. The top aircraft in this category are the Boeing 747, the Boeing 777, and the Airbus A-300 (Lioukas, 2000). In the wide-body market, aircraft also differ significantly in terms of their features according to whether they are intended for serving the medium range for example, the Boeing 767, the Airbus A-300 and A-310, DC-10, and L-1011 or extended range marketplace for example, Boeing 747 and 777, the Airbus A-330 and A-340, and the MD-11. Therefore the competition is more extreme within each category than between them.

For a decade linking 2000 and 2009 Airbus acknowledged 6,400 orders, while Boeing acknowledged 5,900. Airbus having higher deliveries between 2003 and 2009, fell a little short of Boeing's deliveries, giving 3,810 aircraft compared to Boeing's 3,900(McDougall, 2001). The competition is strong, and each company has regularly blamed the other of receiving unjust state assistance from their relevant administration (Gillespie, 2007).

Comparison by size

The widebody 747-8, the newest change of Boeing's largest airliner, is in straight rivalry on extended drag routes with the A380. Airlines are seeking large passenger aircrafts; the two have been prone to competitors on diverse occurrences (Kuemmerle, 2001).

Competition by outsourcing

Boeing and Airbus take advantage of subcontracting production of aircraft components to producers in countries tactically important in order to enlarge aggressive advantage (Nixon, 1999). Boeing opened ancient relations with Japanese dealers for example Mitsubishi profound Industries and Kawasaki weighty manufacturers by which these organizations have rising friendship on successive Boeing jet programs (Khermouch, 2001). This process has assisted Boeing achieve almost whole power of the Japanese marketplace for commercial jets. Airbus has less probability to subcontract significant parts of its manufacture further than its own European plants. In 2008 Airbus made an assembly plant in China for construction of its A320 cycle aircraft (McDougall, 2001).

Competition through technology

One of the ways Airbus fought with Boeing in the 1970s was by the beginning of highly developed equipment. The A300 made the most wide-ranging use of combination materials by automating the flight engineer's functions (McDougall, 2001).This was the first large marketable plane to contain a two-man flight crew. In the 1980s Airbus innovative to set up digital fly by wire which reins into an airliner (the A320).The Boeing 787 is resolute be the first great aircraft to use these collection for the majority of its manufacture (Deephouse, 1999).

Competition by product Range overlap

The A380 is a little bigger than the B747 at a similar instant as the A350 XWB battle out with the soaring end of the B787 and the small end of the B777 (McDougall, 2001).The A320 is finer than the 737-700 but lesser than the 737-800. The A321 is better than the B737-900 but lesser than the earlier B757-200. The A330-200 battles out with the minor B767-300ER. Airlines use this as a benefit since there is whole outcome series of 100 seats to 500 seats than if both corporations presented indistinguishable aircraft (Chi,1999).

Market Analysis

There are less product lines in wide-body division of the market, and the number of aircraft sold is much smaller than in narrow-body division. The collective production of the best selling wide-body Boeing 747 attained about 1,185 units in 1998 and the greatest selling Airbus aircraft A300 vended only 481 units between 1975 and 1997 (McDougall, 2001). This competition tends to be more intense in wide body market because each additional sale generates valuable revenue (Khermouch, 2001). In dissimilarity, small-body planes frequently sell fine above 1,000 units over their lifetime, with Boeing 737 advertising over 3,200 items until 1998 (Kalnins, 2001).

In 2003 Airbus defeated Boeing to develop into the world's best-selling airliner manufacturer, a place it holds until 2008. It distributed a testimony 483 aircraft, thrashing Boeing, which vended 375. Airbus put up for sale planes valued at US$100bn in 2008, giving it a marketplace share of 54%. In January 2009, Airbus had total orders for 3,715 jets, which would have taken six years to clear, Boeing had 3,700 orders. The two airplane giants are confined in a disagreement over allegation that they are each getting commercial aircraft subsidies (Nixon, 1999).

Swot Analysis

Airbus capacity flights of the new A380 can provide Boeing rivalry for the high interchange marketplace. Boeing narrow body planes are weak summits that cannot battle out with Airbus A320 in the marketplace. Boeing system of lean manufacturing is not able to thrash Airbus. Boeing requires affecting a customer-oriented approach relatively than in a product driven manner (Mustoe, 2010).

Boeing is widebody aircraft where there is potential for large profits. Boeing has large prospects in space while Airbus is simply a commercial aircraft manufacturer.

Airbus beats Boeing with the single-aisle aircraft like the A320. The A320 is a lot better than the 757-200. Boeing beats Airbus in the Wide-body aircraft but the A340-500 can beat the 747-400 because of the A340-500 range. The Boeing 777-200 /-300 is excellent aircraft done and Airbus cannot compete with this aircraft (Gillespie, 2007).

Technological Developments

Boeing 787 Dreamliner can cut fuel use by 20%, because of the latest engines, and the use of frivolous fused materials. While Airbus A380, is a long haul aircraft and guzzle less than three liters of energy per traveler over 100km. The A380's competence and superior technology result in 15-20% lower seat-mile expenses than those of Boeing planes. Fuel resourceful engines and the use of superior merged resources participate a fundamental function in dropping the A380's operating costs (Kalnins, 2001).

Future analysis

The 787-9 will be the first variant of the 787 with a prolonged fuselage, seating 250-290 in three classes with a range 14,800 to 15,750 km. This variation diverges from the 787-8 in a number of ways which includes structural strengthening, a lengthened fuselage, a higher fuel capacity and a higher maximum take-off weight. The targeted date for entry into service is planned for 2010 and is scheduled for early 2013.

Airbus prospects

Over the next two decades, Boeing anticipates China to use up $400 billion to buy 3,770 aircraft from producer, making China next in bulk only to the shared market of the U.S. and Canada.

The Chinese market is rising fast; Airbus is balanced to gain the supreme benefit winning far more orders than Boeing, which locates itself a goal in a malicious war of words. Chinese airlines have in recent times positioned orders for 358 Airbus airplanes and have choices for more 14 more (Gillespie, 2007).

Prospects in Japan

Boeing has conquered the market however Airbus is stepping up marketing of its A380 super jumbo jet by teaming up with several Japanese firms in joint production of aircraft parts and components (Bhagwat, 2008).

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FREE Help Guides

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Place an order now

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Our experts can help you with your essay question Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

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Copyright © 2003 - 2017 - UK Essays is a trading name of All Answers Ltd, a company registered in England and Wales. Company Registration No: 4964706. VAT Registration No: 842417633. Registered Data Controller No: Z1821391. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ.

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