Airbus Faces Uncertain Future Amidst Production Delays and Managerial Issues

Strategic Insights -

Airbus, a European aircraft manufacturer, is facing significant challenges due to production delays and managerial problems. The company's flagship model, the A380, has been two years late in production, prompting Federal Express to pull out of a deal to buy 10 aircraft and switch to Boeing. This decision has left Airbus with a significant loss, including a €1 billion loss in the third quarter due to costs related to the delayed A380. Despite confident predictions that sales will pick up when the A380 is released, Airbus faces growing concerns about its future, particularly in light of its unwieldy Franco-German management and manufacturing structure.

Key Takeaways:

  • Airbus's A380 production has been delayed by two years, prompting a major customer, Federal Express, to cancel its order and switch to Boeing.
  • The company's third-quarter loss was €1 billion, largely due to costs related to the delayed A380.
  • Airbus's long-standing A320 series is still selling well, particularly with easyJet, which is having aircraft built in record numbers.
  • The A380's delay is attributed to transnational confusion, with wiring and parts not matching properly due to the company's complex Franco-German management structure.
  • Airbus is in the process of redesigning its A350 model, which is being unfairly impacted by EU government loans, according to the US.
  • The company needs to outsource more and become a global manufacturer to survive, but this will be a challenging sell to European leaders.
  • Airbus has a new chief executive, its third in a year, and EADS has taken full control of the business.

Statistics:

  • Airbus's third-quarter loss was €1 billion.
  • The A380 production delay has resulted in a loss of orders for Airbus.
  • EasyJet is having the A320 series built in record numbers.
  • The A350 and A350XWB redesign is expected to take years to complete.
  • Boeing's 787 Dreamliner has stolen sales from Airbus in the mid-market sector.

Sources:

  • "Airbus faces uncertain future after A380 delay" by Unknown, Business Week.
  • "EADS posts third-quarter loss of €1 billion" by Unknown, Bloomberg.
  • "Airbus faces crisis as A380 delay chases away customers" by David Smith, The Guardian.
  • "Airbus set to unveil revamped A350 airliner" by Unknown, Reuters.