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Airbus A350 vs Boeing 787 Analysis

This document summarizes a presentation comparing Airbus and Boeing's largest aircraft models, the A350 and 787. It discusses the duopoly market structure between the two companies and the ongoing subsidy disputes filed against each other at the WTO. Both Airbus and Boeing receive government subsidies, and each has accused the other of receiving unfair subsidies. The presentation also reviews the key features and sales of the A350 and 787 models, which were introduced to compete against each other. While the 787 entered service earlier, Airbus has outsold Boeing in total aircraft orders in recent years.

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Anisha Adhikari
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565 views22 pages

Airbus A350 vs Boeing 787 Analysis

This document summarizes a presentation comparing Airbus and Boeing's largest aircraft models, the A350 and 787. It discusses the duopoly market structure between the two companies and the ongoing subsidy disputes filed against each other at the WTO. Both Airbus and Boeing receive government subsidies, and each has accused the other of receiving unfair subsidies. The presentation also reviews the key features and sales of the A350 and 787 models, which were introduced to compete against each other. While the 787 entered service earlier, Airbus has outsold Boeing in total aircraft orders in recent years.

Uploaded by

Anisha Adhikari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Introduction: Airbus 350 vs. Boeing 787
  • Objectives of the Case
  • Introduction to Duopoly
  • Introduction to the Case: Boeing vs. Airbus
  • What is Subsidy?
  • Effects of Subsidy on Demand and Supply
  • Subsidy Issue between Airbus and Boeing
  • Major Highlights of 1992 Bilateral Agreement
  • Filing of Cases against Each Other
  • Verdict of the Case
  • The Competition – For Aircraft Orders
  • Dreamliner–Boeing 787
  • Current Status of Sales and Orders 787 Dreamliner
  • Airbus A350 XWB (2007)
  • Airbus A350 XWB (2007) – contd...
  • Current Status of Sales and Orders A350 XWB
  • Boeing vs Airbus: How Did They Do in 2014?
  • Other Aircraft Manufacturers
  • Forces in the Aircraft Industry
  • Is transformation from duopoly to oligopoly possible in aircraft manufacturing industry?
  • References
  • Conclusion and Queries

Presentation On

Airbus 350 vs. Boeing 787Battle for the Skies


Prepared By:
Group C
Anisha Adhikari
(01)
Rishav Devkota
(09 )
Niraj Lekhak (21)
Shabnam
Maharjan (22)
Shradha

Objectives of the Case


Understand competition existing in a duopoly market

Understand demand and supply in the aviation industry


Analyse the competitive strategies
Analyse possible threats from various new entrants

Introduction to Duopoly
Market condition in which only two firms have dominant

control over a market


Most basic form of oligopoly (a market dominated by a
small number of companies).
Characteristics
Only Two firms in the industry
Uses Non-price competition to compete
Strong control over price
Strong Barriers to entry

Introduction to the Case


Established in 1970
Challenged Boeings
monopoly and gradually
changed market to duopoly
Backed by European Union

Established in 1916
By William Edward Boeing
Backed by US government
Enjoyed monopoly till
1970
Similarity

Equipped in manufacturing similar aircrafts like single aisle, long


range and wide body aircrafts
Aircraft Subsidies
Cause of dispute

What is Subsidy?
A benefit given by the

government to groups or
individuals usually in the form
of a cash payment or tax
reduction.
Generally given to support an
industry of public interest

Effects of subsidy on
Demand and Supply

Subsidy Issue between Airbus and Boeing

Claims of Airbus
Boeing being
subsidized by US
government

Claims of Boeing
Airbus being
subsidized by
EU
Solutions

1992- signed a bilateral agreement


-over the years ignored and bypassed by both
7

Major Highlights of 1992 Bilateral


Agreement
Subsidies limited to 33% of the

total costs of developing a new


aircraft
Repay with interest within 17
years
Indirect subsidy limited to 3% of
nations LCA (Large Civil
Aircraft) turnover

Filing of cases against each other


Main reason:
2003- Sales of Airbus> Sales of Boeing
Continued in 2004

Boeing Against Airbus


To WTO for violating the 1992 bilateral agreement
Receiving unfair subsidies from EU

Airbus against Boeing


Unfair tax reduction from US government
Investment subsidies from Japanese Airlines

Verdict of the Case


Different verdicts have been given till now.
Appeals still going on
The twin subsidy cases at the WTO have already entered

the record books as the world's largest and costliest trade


dispute, with both sides claiming victory at every step.

Source:
[Link]
bsidy_dispute/act462770
Source:
[Link]
10
idy_dispute/act462770

The Competition-For aircraft orders


Larger
A380
A320
Boeing 737-800

Smaller
Boeing 747
Boeing 737-700
A320

Benefactors

Airlines all
over the World
Common strategy adopted
Airbus
350 XWB -2007

Boeing
787 Dreamliner-2005
11

Dreamliner-Boeing787
Take passengers where and when they want to go,

without intermediate stops


Provide utmost comfort to passengers
Make it simple and cost-effective for airlines to operate
Lighter than previous ones(using of composite material)
Fuel efficiency gave an edge for models saleability
Engines reducing noise pollution- environment+comfort
of passengers
Dreamliner is the most advanced and efficient airplane
in its class, one that will set new standards for
environmental leadership and passenger comfort
12

Current Status of Sales and Orders


787 Dreamliner
1,105 orders from 58 customers as

of 2015
Entered commercial service on
October 26, 2011 with launch
customer All Nippon Airways
A total of 163 Boeing 787 aircraft
(all variants) were in airline
service as of July 2014
Source:
[Link]
13

Airbus A350 XWB(2007)


To compete with Boeing
Improvised version of A330
Sales of A330 decreased due to introduction of 787
Customers did not favour the design of A350
Redesigned with wider fuselage-A350 XWB
Accommodate wider economy seat maximized usable

space
Passenger windows 5 cm wider to A330

14

Airbus A350 XWB(2007)- contd


According to company sources
Fuel efficiency: 4% to 5% per seat greater than 787
Engines more advanced than 787

It is heartening that Airbus has listened to customer


airlines and has come up with a totally new design for
the A350.- Chew Choon Seng, CEO of Singapore
Airlines

15

Current Status of Sales and Orders


A350 XWB
780 total orders as of March,

2015
The A350 entered
service with Qatar
Airways in January, 2015
A total of just 2 A350 delivered
to Qatar Airways and currently
in service
Source: [Link]
16

Boeing vs Airbus:
How Did They Do in 2014?

ORDERS VICTOR: Airbus

Source: [Link]
17

Other Aircraft Manufacturers


Third largest-Bombardier Aerospace (Canadian

and UK government invested $700 million)


United Aircraft Building Corporation (UABC)
ARJ-21 aircraft ( by China with 60-105 seatplanning to manufacture a wide body aircraft
along with Russia)
Upcoming
Mitsubishi Heavy Industries (of Japan)

18

Forces in the Aircraft industry


Internal Rivalry
Government subsidies
Substitutes
Barriers to entry
Suppliers and Buyers

19

Is transformation from duopoly to Oligopoly


possible in aircraft manufacturing industry?
Not in the foreseeable future because Boeing and

Airbus enjoy:
long experience
advanced technology
Oligopol
Duopoly
government support
y
loyal clients
network of suppliers and resources
Rising global companies may gain shares in the
market and transform it to oligopoly market eventually
20

References
[Link]

g-vs-airbus-2014/
[Link]
[Link]
mliner
[Link]
_looms_in_aircraft_subsidy_dispute/act462770

21

Any Queries ???


22

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