1. Airbus S.A.S.
(Société par Actions Simplifiée)
Pilot : Naikal Appasaheb (G0701340H)
Co-Pilot : Lim Siew Chen (G0701339E)
Air Steward : Wallace Zheng Yu (G0701307F)
Chia Sok Mui (G0701327B)
Ho Mei Yee (G0701333A)
VIP : Mr Kan Siew Ning
Passenger List : K6226 class
2. AgendaAgenda
Aviation History
o Aviation History
o Industry Overview
Aircraft Maker Industry
o Overview
o Key Players
o Porter’s Five Forces
o Industry Trends & Outlooks
Dinner Break (Class Exercise)
Airbus S.A.S
o Overview
o Business Strategy and KM Strategy
o Strategy Map and Balance Scorecard
Questions & Answers
6. Along with the European Aviation Safety Agency (EASA), the Federal
Aviation Administration (FAA) is one of the two main agencies worldwide
responsible for the certification of new aircraft.
Air Type Certificate, is awarded by aviation regulating bodies to aerospace
manufacturers after it has been established that the particular design of a civil
aircraft, engine, or propeller has fulfilled the regulating bodies' current
prevailing airworthiness requirements for the safe conduct of flights under all
normally conceivable conditions (military types are usually exempted).
Aircraft produced under a type certified design are issued a Standard
Airworthiness Certificate.[1]
Airworthiness certificate is an FAA document which grants authorization to
operate an aircraft in flight. [2]
Sample : Air Type Certificate Airworthiness Certificate
Source: [1] http://en.wikipedia.org/wiki/Federal_Aviation_Administrator
[2] http://www.faa.gov/aircraft/air_cert/airworthiness_certification/aw_overview/
Adobe Acrobat 7.0
Document
Government Regulator: FAA & EASAGovernment Regulator: FAA & EASA
Adobe Acrobat 7.0
Document
8. Key PlayersKey Players
Airbus and Boeing are the only players in the commercial
aviation industry for 100 or more seats capacity
Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt
9. Airbus vs Boeing
Airbus Boeing
Entity An EADS Subsidiary Public
Founded
1970 (Airbus Industrie)
2001 (Airbus S.A.S.)
1916 (Seattle, WA)
Headquarter Toulouse, France Chicago, Il, USA
Key People Thomas Enders, CEO W. James McNerney, Jr. CEO
Industry Aerospace Aerospace & Defense
Products Commercial airliners Commercial airliners
Revenue €23.5 billion (2005) $61.5 billion (FY 2006)
Employees 55,000-57,000 153,000 (2006)
Slogan Setting the standards Forever New Frontiers
Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt
10. Airbus vs. Boeing Products
Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt
11. Very Large Commercial AircraftVery Large Commercial Aircraft
Source: http://en.wikipedia.org/wiki/Airbus_380
A380 747-8
Speed 0.85 mach. 0.855 mach.
Range 10,521 mi 10,254 mi
Wingspan 261 ft 224 ft
Max takeoff weight 1,235,000 lb 970,000 lb
Capacity 525-853 450
Cost US$319 million US$300 million
Taxiway Wider Normal
Operation cost Cheaper Higher
15. Five-Forces Analysis
Supplier Power
• High technology
• Various supplier needed for specialized in
different parts and components
• Supplier dependency on company is low.
Buyer Power
• Fewer manufacturer choices
• Costly to switch to another aircraft producer -
maintenance, retraining cost.
• Low bargaining power of buyers
Threat of Substitute
• Buyer propensity to
substitute low due to
nearly no alternative
• Price & performance
of substitute not
attractive
Industry Rivalry
• Equally balanced competitors
• Low Differentiation
Low
Low
High
Low
HighThreat of Entry
• High switching costs
• High capital
requirement
• High economies of
scale
• High Retaliation
•Government policy and
restriction
19. Source: www.airbus.com
Industry OutlookIndustry Outlook
• North America and Europe are also expected to remain significant.
• Traffic within China is now expected to add more RPKs than any
other flow in the next 20 years, with the domestic and intra-
European flow next in order of importance using this measure.
2nd highest
growth
Highest
Growth
24. Toulouse
subsidiaries
Airbus of
North America
Airbus
China
Airbus
Japan
Airbus Worldwide Presence
History of Airbus
o Airbus established in Dec 1970
o Place : Toulouse, France
o Employees : 57,000
o Shareholders :
* EADS (80%)
* BAE Systems (20%)
Training Centers
o Toulouse (France)
o Miami, Florida (USA)
o Hamburg (Germany)
o Beijing (PRC)
Main Subsidaries
o Airbus North America
o Airbus China
o Airbus Japan
25. Mission & ValuesMission & Values
Mission : create the best and safest aircraftMission : create the best and safest aircraft
Airbus' mission is to meet the needs of airlines and operators by producing the
most modern and comprehensive aircraft family on the market,
complemented by the highest standard of product support.
ValuesValues
Airbus fosters values of excellence and innovation among its culturally-
diverse employees and considers its customers, contractors and suppliers to
be partners working in the interests of safety, quality and performance.
Source: http://www.airbus.com/en/corporate/ethics/mission_values/
26. Airbus ResultsAirbus Results
Source: http://www.airbus.com/en/presscentre/
Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Aircraft orders 556 476 520 375 300 284 370 1111 824 1458
Value of orders 39 30.5 41.3 44.7 24.3 24.3 34.4 95.9 75.1 181.1
(US$ billion)
Cumulative orders 3203 3633 4125 4399 4632 4886 5252 6307 7097 8555
Aircraft deliveries 229 294 311 325 303 305 320 378 434 453
Turnover US$ 13.3 US$ 16.7 US$ 17.2 Euro 20.5 Euro 19.5 Euro 19.3 Euro 20.2 Euro 22.2 Euro 26.0 N/A
(billion)
Cumulative deliveries 1894 2188 2499 2824 3127 3432 3752 4130 4564 5017
Order backlog 1309 1445 1626 1575 1505 1454 1500 2177 2533 3538
Number of customers 160 169 173 180 191 186 204 225 271 287
Number of operators 158 178 188 188 188 210 232 249 250 286
Aircraft orders = 62% ^
Value of orders = 78% ^
31. Business StrategyBusiness Strategy
Supply
• Airbus announced it would axe more than 80% of its supply base.
• It would reduces the company’s supplier rolls from the current 3000 to just 500, to reduce
material costs by ₤1 billion (US$1.9 billion; S$2.8 billion) over the next three years.
• Supplier consolidation will also cut administrative costs by an additional ₤235 million
(US$446.5 million; S$665.3 million)
Support Strategy
• Rather than becoming a standalone business unit, building an integrated customer
support can help make Airbus airplanes more attractive.
• To create a network of MRO (maintenance, repair, and overhaul) providers - Airbus "e-
solutions" for maintenance.
32. Business StrategyBusiness Strategy
Innovation
• Align strategic vision and innovation goals with implementation of throughout the
organization, focusing on collaboration both vertically and horizontally.
• Managing boundaries enables collaboration across organizations, establishing
structures and processes regarding governance, operations and technology.
• Finally, an ongoing commitment is required to orchestrate and systematize collaboration
for innovation throughout the organization and its extended enterprise over time.
Customer
• Establish stable relationships with all customers, from the biggest to the smallest,
from major airlines to regional airlines and start-ups
33. AirbusAirbus KM StrategyKM Strategy
5 Strategies Codification Focus Personalization Focus
Competitive Re-use
Business emphasises commonality in fleet
design.
Provide high quality, reliable, and fast
implementation by reusing codified knowledge.
Customisation
Business emphasises highly customised
service offerings.
Provide creative and rigorous solutions by
focusing on centres of excellence.
Economic Reuse economics
Customize Spares Logistics: Airbus is taking
responsibility to deliver spares & kits directly to
the customer, generating additional revenues.
Expert economics
Charge high fees for highly customised
solutions to unique problems.
Knowledge
Management
People-to-documents
Migration of technical documents from paper to
digital support.
Provide innovative e-portal solutions for
customers and suppliers.
Promote knowledge reuse through EBOK.
Person-to-person
Form CoPs across functions boundaries to
bring together experts with different interests.
Marketing and Story-telling success stories
Form “College of Experts” network.
Strong collaboration with institutes, partners
and universities.
Information
Technology
Repositories
Invest heavily in IT to provide e-solutions
(AIRMAN, AIRNET, AIRTEC, LPC etc) to
customers and suppliers.
Networks
Invest moderately in IT to facilitate
conversations and the exchange of tacit
knowledge
Human Resources Re-users
Hire people suited to reusing knowledge and
implementing solutions.
Provide best possible training to employees.
Reward people for using and contributing to
document databases
Inventors
Hire talented and creative people.
Regular performance reviews and personal
development planning.
Introduce “Awards of Excellence” for individual
and team success.
34. AirbusAirbus KM SharingKM Sharing
- Bounce recovery – Reject Landing
- Preventing Tailstrike at landing
- Crosswind Landings
Landing Techniques
- Flying Stabilized approach
- Aircraft Energy Management during Approaches
Approach Techniques
- Decent and approach Profile ManagementDescent Management
- Revisiting the ‘STOP’ or ‘GO’ Decision
- Preventing Tailstrike at Takeoff
- Understanding the takeoff speeds
- Response to Stall Warning aviation at Takeoff
Takeoff and Departure Operations
- Enhancing Terrain Awareness
- Birdstrike Threat Awareness
- Wake Turbulence Awareness / Avoidance
- Volcanic Ash Awareness
Operation Environment
- Human Factor Aspects in Incident / Accidents
- CRM Aspects in Incident/Accidents
- Managing Interruptions and Distractions
- Effective Pilot / Controller Communications
- Enhancing Situation awareness
- Error management
- Visual Illusion awareness
Human Performance
- Operating Philosophy
- Optimum Use of Automation
- Operation Golden Rules
- Standard Calls
- Normal Checklists
- Conducting Effective Briefings
Standard Operating Procedure
- FSF ALAR Task Force Recommendation
- From Non-precision to Precision-like Approaches
Industry safety initiatives
- Forward
- Introducing the Briefing Notes Concept
- Glossary of Terms and Abbreviations
- Use of Hyperlinks
How-to-use briefing notesFlight
Operations
DocumentsDocument GroupCategory
35. AirbusAirbus KM SharingKM Sharing
- Ground Support Equipment and ToolsBest Practices
- Human Performance and Limitations
- Error Management
Human PerformanceMaintenance
- Effective Briefings for Cabin Operations
- Cabin Smoke Awareness
- Management In-flight Fires
- Planned Ground evacuation
- Unplanned Ground evacuation
- Cabin decompression Awareness
- Turbulence threat awareness
Cabin OperationsCabin
Operations
36. KM Metrics @ AirbusKM Metrics @ Airbus
Number of documents published
Number of unique users
Number of answers users provided
Number of frequently-asked questions
documents created
Knowledge Management
Reduction of errors in issue resolution
Define commonality of folder structures and
adherence to that commonality
Increase in reuse and efficiency of knowledge
Increase in accuracy of information captured
Usability and retrieval of information
Economics/Reuse
KM MetricsKM Strategy
37. Community ofCommunity of Practice@AirbusPractice@Airbus
Book of Knowledge
Knowledge repository for engineers that helps to share best practices and lessons learned.
• Leverage the sharing of tacit knowledge across organizational boundaries,
• Reuse experience (Preservation of knowledge)
• Reduce learning curve for new engineers
Source: Enabling Communities of Practice at EADS Airbus
44. BSC - THE FINANCIAL PERSPECTIVE
No of gross orders
No of backlog orders
No of new customer
orders vs fleet models
Increase new business
orders
Achieve 20% more in
total gross order by FY08
Achieve 10% more in
total backlog order by FY08
Achieve 10% order from
new customers per models
Market and
Technology leader
% market share
No of innovation products
and services
Total no of aircrafts
delivery
% of reduction in CO2
> 50% market share
2 or more major
products/services/yr
Achieve 15% increase for
FY08
10% reduction in FY08
MEASUREMEASURESTRATEGIC
GOAL
% of order from
various fleet models
TARGET
KPI
TARGET
KPI
XX% A320
XX% A3XX
XX% A380
INITIATIVESINITIATIVES
Participate in air
shows globally
Tell/Publish success
stories on various
medias
Provide innovative
solutions to customers
Introduce new aircraft
model
Provide financial
solutions to leasing
companies, corporate,
budget and full service
airlines and air-cargo
companies
Broaden Revenue Mix
45. BSC - THE CUSTOMER PERSPECTIVE
Technical dispatch
reliability rate
Provide rapid response
to customers
Achieve more than
99% operating reliability
for all fleets
Leading-edge
manufacturing
Time to market
No of defective products
from suppliers
Supplier Rating
Production rate per
aircraft model per month
Reduce cycle time by
30%
<10% defective rate per
suppliers
<10% of supplier
rejection
XX A320
XX A340
XX A380
MEASUREMEASURESTRATEGIC
GOAL
No of patents and
innovations invented
No of innovations adopted
TARGET
KPI
TARGET
KPI
Increase 30% by FY08
10% improvement from
FY07
INITIATIVESINITIATIVES
Collaboration with
institutions and universities
Leveraging Information
Systems and Experts for
knowledge creation and
reuse
Increase employees
collaboration around the
world
Improvement in
manufacturing processes
Effective supply chain
management
Develop new
technology
Improve collaboration
with partners
No of collaborations
with partners
Participate in at least 10
new initiatives in FY08
46. BSC - THE INTERNAL BUSINESS PERSPECTIVE
Customer Satisfaction
Rating
Customer retention rate
Increase customer
satisfaction
Improve customer rating
by 10% by FY08
Increase no of repeated
customer orders by 10%
per year
Cost & Time Reduction
in Production &
Maintenance
Training cost for ground
crews, pilots, etc(Airbus
Cross Crew Qualification
(CCQ))
Less than 2wks of
training for pilot
conversion and crew
maintenance
MEASUREMEASURE
STRATEGIC
GOAL
Maintenance downtime
TARGET
KPI
TARGET
KPI
Require less than 1hr
per model
INITIATIVESINITIATIVES
Provide innovative
solutions to customers
Improvement in
manufacturing processes
Conduct Customer
Satisfaction Surveys, Email
and Mail Surveys
Provide excellent after
sales service
Implement design
commonality in all fleets
Ensure compliant to EASA
and FAA requirements
Effective supply chain
management
Provide Safe & Quality
fleets & Services
No of test flight hours
conducted
No of on-time delivery
Compliance to ISO14001
standards
Reduce accident rate
10% more than
regulatory requirement
99% on target
Zero NCN per audit
Reduce accident rate by
10%
Increase customer
confidence
Increase new aircraft
models
Total no of choices
available for customers
10% increment in amount
of choices available
47. BSC - THE LEARNING AND GROWTH PERSPECTIVE
Career development Staff attrition rate
No. of employees
promotion
Not more than 20% in FY08
5% increase for capable
employees
MEASUREMEASURESTRATEGIC
GOAL
No of Master and PhD
qualifications
No of training hours per
annual
Employee skills
assessment
Percent of employee
awards related to quality
Employee
satisfaction/organization
climate surveys
TARGET
KPI
TARGET
KPI
Achieve 20% from recruitment
exercises
Attain at least 48hrs of training
per employee/year
Cross training of core
knowledge and technical skills
50% increase in number of
awards related to quality by FY08
Achieve more than 80% by
FY08
INITIATIVESINITIATIVES
Hire Key Technical
Employee.
Improve employee
work conditions.
Provide excellent and
extensive training
courses for employees
Provide language
training and promote
intercultural awareness
Conduct regular
reviews plus personal
development planning
with employees
Celebrate and reward
individual and team
performance
Tie incentives to quality
Provide mentoring to
new employees
Form CoPs
Develop, train, retrain
current and new
employees. Attract,
develop and retain
knowledge workers
(Skill Development)
No of intercultural
activities conducted
No. of woman graduate
recruits.
Achieve at least 1 activity per
month
At least 20% of total recruits
Diversified Workforce
Promote Knowledge
Sharing
No of ideas created
and codified/published
At least 2 new ideas
from each employee
