Commercial Aircraft Industry- is dominated by two players Boeing & Airbus Industries

Background:

Commercial Aircraft Industry- is dominated by two players Boeing & Airbus Industries

In 1999, the jet aircraft had revenues of $56.5 billion out of the total revenue $143 billion of the commercial aviation industry. Combined, they delivered 889 aircraft in 1999, ranging from single-aisle jets seating 100-200 passengers to the twin-aisle Boeing 747-400 seating more than 400 passengers.

In July, 2000 the Airbus management is faced with the crucial task of deciding whether to go ahead with the launch of A3XX or not? A3XX was a proposed super jumbo with the following features:

• Seating 550-990 passengers.
• List Price- $216 million
• Cost -$13 billion, this makes it one of the largest product launch decisions in the aviation industry, this figure represented 26% of total industry revenues in 2000 ($45.6 billion) and more than 70% of Airbus total revenues ($17.2 billion) in 2000.
• Risk- Adding to the huge financial risk is the fact that...