In July 2000, Airbus Industrie Supervisory Board is on the verge of approving a $ 13 billion investment for the development of a new super-jumbo jet as the A3XX that would seat passengers 550-1000. Having secured approximately 20 orders for the new jet, the Board must decide whether it is sufficient, the long-term demand for the A3XX to justify the investment. At the time, Airbus was estimated that the market for very large aircraft (VLA), which seats more than 500 passengers, w … Read more »

In July 2000, Airbus Industrie Supervisory Board is on the verge of approving a $ 13 billion investment for the development of a new super-jumbo jet as the A3XX that would seat passengers 550-1000. Having secured approximately 20 orders for the new jet, the Board must decide whether it is sufficient, the long-term demand for the A3XX to justify the investment. At the time, Airbus was assumed that the market for very large aircraft (VLA), those seating more than 500 passengers, would exceed 1,500 aircraft over the next 20 years and would generate revenues of more than $ 350 billion. According to Airbus, it needs to sell 250 aircraft to break even and has as many as 750 aircraft for sale in the next 20 years. This case examines the two sets of predictions and ask students if they would go with the launch given the size of the investment and the uncertainty of long-term demand.
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from
Benjamin C. Esty,
Michael Kane
Source: HBS Premier Case Collection
20 pages.
Publication Date: Nov 29, 2000. Prod #: 201028-PDF-ENG
Airbus A3XX: Developing the world’s largest commercial jet (A) HBR case solution