The rise and demise of Airbus A380

• Main Authors: GENG, Xuesong, BHATTACHARYA, Lipika
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Competitive Strategy; Game Theory; Strategic Management; Strategic Change; NPV Analysis; Sustainable manufacturing; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/376; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-21-BATCH%20%5BPDF-Pic%5D/SMU-21-0019%20%5BAirbus%5D/SMU-21-0019%20%5BAirbus%5D.pdf?CT=1633331388973&OR=ItemsView
• Institution: Singapore Management University

Set in July 2021, this case talks about the launch and discontinuation of the very large aircraft, A380, by leading aircraft manufacturer Airbus. The development of the A380 had been motivated by two key factors – the projected market trend of increased hub-and-spoke travel and the success of Boeing 747 - a very large aircraft by Boeing. Although the A380 was the biggest passenger aircraft ever built, with avant-garde technology and reconfigurable design, it failed to succeed due to changing industry trends. Hub airports were witnessing increasing traffic congestion, and more and more airlines were switching to point-to-point travel to avoid hubs altogether. Demand for very large aircrafts like the A380 fell by almost 92% from 2010 to 2020, and Airbus had to make the harsh decision of shutting down the aircraft’s production in 2021. The case describes the high stake decision behind the development of the A380 and how it fared after its launch. It also elaborates the duopoly between Boeing and Airbus, which accounted for 91% of the commercial aircraft market share. The case ends with forward-looking questions on what strategies Airbus can implement after the demise of the A380 to compete with long-standing rival Boeing and new entrants like Chinese aircraft manufacturers in a cut-throat market that was witnessing the commencement of environmentally friendly aircraft projects by the two leading players as the new battlefield. Although one might intuitively blame the low demand for A380 on the changing market environment and the shift from hub-and-spoke to point-to-point model, the analysis in this teaching note shows that it is also partly due to the deliberate strategic moves made by Boeing after the launch of the A380. By providing rich information on Airbus and Boeing’s product portfolio, market information, and financial information of A380, this case allows instructors to teach topics such as strategic management, strategic change, and competitive strategies.