...BOEING 777 – Frank Shrontz OBJETIVO - Lanzar modelo 777 para Mejorar rentabilidad promedio actual que está en 12% y subir ganancias aun cuando sus competidores no ganan plata. HECHOS - En octubre de 1990 anuncian el lanzamiento para 350.390 pasajeros hasta 14.000 kms. - Primeros se enviarían a united airlines en mayo de 1995 que ya había puesto pedidos en firme. Eran los únicos que habían pedido. - Pesimistas veian lanzamiento pues: habían gastado mas del doble en I+D que los dos modelos anteriores y MD y Airbus ya tenían aviones en este nicho con pedidos en firme. Tampoco había condiciones políticas y económicas. Fracaso afectaría mucho las finanzas. - Optimistas: ganarían el 54% del mercado. Mucha expectativa de crecimiento de viajes - Acción cayendo. Invasión de irak a kuwair afectó precio del petróleo. También podía haber caído por la lectura del mercado a lo que se anticipaba con su modelo 777. EMPRESA - Tenía el 53% del mercado mundial seguido de Airbus (18%) y MD (19%). - Ventas por 27.000mm en 1990. Tenía pedidos por 97.000mm (producción por 3 años más) - MD le competiría al 777 con el MD11 y Airbus con los A330 y A340. - Dos segmentos: aviones comerciales (737, 747, 757 y 767) y de defensa. - Buena situación financiera. Deuda contable solo 4% del capital total. El 777: Según boeing sería el jet de doble cuerpo más largo y grande, flexible, eficaz y de menor costo. Sus alas serian plegables en la punta para almacenar más fácil en hangares....
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...Boeing 777 Aviones para transportar entre 100 y 500 pasajeros. Frank Shrontz (CEO), misión de aumentar rentabilidad 12% actual. Octubre 1990, lanzamiento boeing 777, capacidad 350-390 pasajeros, contaban con orden de pedido de United Airlines. Pesimistas Señalaban que Airbus y McDonell ya habían anunciado existencia de aviones para este nicho y contaban con pedidos, generando disminución de precios. Estimaban gastos de I&D por USD 4-5 mil MM, superando el doble de B757 y B767. Invasión en Kuwait generaría disminución en viajes aéreos. Optimistas Obtendría como mínimo el 54% histórico en el nicho, además Boeing esperaba que los viajes se duplicaran al 2005, además, desgate de aviones significaría una Dda reemplazo de 640 nuevas unidades y el gasto en I&D podría podría utilizarse en nuevos modelos como el 747. Habían pasado 2 1/2 años desde primeros intentos de diseño. “Acciones habían disminuido desde invasión a Kuwait, acusando incremento en precio de petróleo, aumentando precios y el debilitamiento de las economías” Value Line Industria: 3 grandes cias. (90% Mº). Boeing (53%), Airbus (18%) y McDonnell (19%). Airbus, creada hace 20 años, segundo puesto y aún no era rentable. Mcdonnell, Principalmente contratista de aviones defensa. Aviones comerciales sólo aportaban 1/3 de los ingresos. Disminución de gasto en Defensa y entrada de Airbus había generado deterioro económico, con deuda por 4,9 mil MM, leverage de 1,5. Boeing, líder mundial en fabricación...
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...What steps did Condit take to make the 777 a successful project? In order to be successful, Condit needed to create an airplane that was preferred by the airlines at a price that was competitive. Philip campaigned aggressively to get customers to buy-into the project early and cut production costs by steadily improve worker skill over time which cuts labor cost. He also updated the manufacturing strategies and outmoded Boeing’s engineering production system. To do this, he introduced several innovations in technology (new FBW system), managerial approach (open forum, candor discussion between VPs), and employee empowerment (workers appeal to management decisions). 2. With a $15 Billion investment cost, how was the risk managed? Boeing utilized subcontracting as a risk-sharing strategy which comes about from high and increasing cost product development. The subcontractors would share a substantial part of the airplane’s development cost which ensured that detailed design work be performed and major subsections of the new plane would be assembled while airframe integrator designed and combined systems and equipment into the airplane. Also, the jet engines came from a completely different company since the venture to design and build one is very risky and costs a vast amount of resources are poured into research and development. Also, the engine itself is highly complex and demanding that it takes longer to develop than the airplane. Boeing sought to obtain a minimum number of firm...
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...Case The Boeing 777: A Financial Analysis of New Product Launch [pic] Eduardo Lioy Keya Williams Ritwik Malvi Jonas Angeles Alexis Heideck 1. Introduction/ Case Summary: The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability...
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...Case Study 39 Airbus vs. Boeing Prepared by Lisa Neumann Matthias Pernkopf Viktoria Scheidl Case study 39 Airbus vs. Boeing Contents: • • • • • History of Airbus History of Boeing Question 1 Question 2 Question 3 History of Airbus •1970: Airbus was formed as European consortium of French and German companies •Spain companies joined the consortium •1979: British Aerospace joined Airbus Industrie. •Each of the four partners operated as national companies •Airbus developed a deserved reputation •2001: Airbus became a single fully integrated company •2004: company had overtaken its main rival •In January 2005 the world’s largest and most advanced passenger aircraft appeared, the A380 •Airbus is one of the world’s leading aircraft manufacturers History of Boeing • was established by William Boeing • the most successful company of U.S. •1916: built their first plane •1917: the Boeing Airplane Company arose. •During World War I, the Navy needed training airplanes. • Boeing leading designer of military aircraft. •1927: Boeing created an airline, named Boeing Air Transport (BAT) •1958:The US became a leader in commercial jet manufacture. •2001: Boeing is focused on 787 Dreamliner •Boeing lost ground to Europe’s Airbus and lost its position as market leader in 2003. • 2006 sets another new Boeing record for total commercial orders in a single year. Question 1 Why is the aircraft manufacturing industry dominated by only two companies?Discuss the barriers...
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...Philip Condit and the Boeing 777: from Design and Development to Production and Sales 1. What steps did Condit take to make the 777 a successful project? In order to be successful, Condit needed to create an airplane that was preferred by the airlines at a price that was competitive. Philip campaigned aggressively to get customers to buy-into the project early and cut production costs by steadily improve worker skill over time which cuts labor cost. He also updated the manufacturing strategies and outmoded Boeing’s engineering production system. To do this, he introduced several innovations in technology (new FBW system), managerial approach (open forum, candor discussion between VPs), and employee empowerment (workers appeal to management decisions). 2. With a $15 Billion investment cost, how was the risk managed? Boeing utilized subcontracting as a risk-sharing strategy which comes about from high and increasing cost product development. The subcontractors would share a substantial part of the airplane’s development cost which ensured that detailed design work be performed and major subsections of the new plane would be assembled while airframe integrator designed and combined systems and equipment into the airplane. Also, the jet engines came from a completely different company since the venture to design and build one is very risky and costs a vast amount of resources are poured into research and development. Also, the engine itself is highly complex and demanding that...
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...The Largest Airline in the World 1st. American Airlines, USA 2nd. Delta Airlines, USA 3rd. Emirates Airlines, UEA Module 1- Lesson 1 General Airline Knowledge Professional Diploma in Aviation & Hospitality Program Instructor: Mary TOH 11/22/2013 1 11/22/2013 2 Cathay Pacific Airways (CX) Founded: World War 2 Pilots: Aircraft: Headquarters: Subsidiaries: About Cathay Pacific http://www.youtube.com/watch?v=D4rIpBrCreA 11/22/2013 24 September 1946 Royal Farrell (American) & Sydney de Kantzow (Australian) DC3 – Betsy and Niki Hong Kong. Dragonair & Air Hong Kong (Cathay Pacific & DHL joint venture partners) 4 3 11/22/2013 Parent Company: Swire Pacific Alliance: Frequent flyer program: Fleet Size: Destinations: Oneworld The Marco Polo Club 133 including cargo 112 including cargo Airport Lounge 1. The Arrival 2. The Pier 3. The Wing 4. The Cabin 5. G16 Lounge 11/22/2013 5 11/22/2013 6 M1 _ Lesson 1 1 The Marco Polo Club The Marco Polo Club is an exclusive loyalty program that offers a range of privileges to their most frequent flyers. There are 4 tiers:1. Diamond 2. Gold 3. Silver 4. Green 11/22/2013 CX Slogan People They Make an Airline http://www.youtube.co m/watch?v=lz1RfUTC 7mI 7 11/22/2013 8 Members of oneworld Alliance: 1. 2. 3. 4. 5. Cathay Pacific, HKG American Airlines, USA British Airways, UK Finnair, Finland Iberia, Spain 9. Qantas, Australia 10. Royal Jordanian Airlines, Jordan ...
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...* To build an international network-oriented airline with core competitiveness and sustainable profitability. * Core value of "customer first * striving for excellence * continuous innovation and contributing to the society", and the vision and mission of "becoming the most favorite airlines for both customers and employees 2. What is its current strategy? Currently, China Southern operates more than 460 passenger and cargo transport aircraft, including Boeing 777, 747, 757 & 737 and Airbus A380, 330, 321, 320, 319. The airline fleet is ranked among the world’s top six airlines (in terms of fleet size) and with Guangzhou and Beijing as its central hubs, the carrier boasts a substantial route network spanning more than 150 destinations in China and more than 40 destinations in Asia with service to Europe, America, Australia and Africa.. * Substantial Flight Capabilities China Southern continues to be a leader in the Chinese aviation industry, introducing the Boeing 737, 757, 777 and Airbus A330 to the Chinese marketplace. China Southern boasts extraordinary flight capabilities with more than 5,260 experienced pilots and is the only Chinese carrier that has the independent capability of training its own pilots through its dedicated flight training centre * Customer First China Southern is committed to putting...
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...* BusinessWeek * BusinessWeek Exchange ------------------------------------------------- Top of Form Bottom of Form Boeing vs. Airbus: It's Getting Ugly The two plane makers are raising the volume of their spat over subsidies. Will the dispute go to the WTO? What's Airbus up to now? On Sept. 6, Chief Executive Noel Forgeard hinted that the European plane maker may soon unveil plans for yet another new aircraft even before the double decker A380 takes its first test flight early next year. Studies on a new plane could start within weeks, Forgeard said, with industrial agreements signed by early 2006. "Airbus is bubbling over with new projects," he said. Forgeard's comments followed weeks of rumors that Airbus is set to revamp its A330, a midsize widebody jet, to counter Boeing Co.'s (BA ) superefficient 7E7 Dreamliner, a brand new 215-seater that's scheduled to get airborne in 2008. Boeing is banking on the 7E7, its first new model since the Boeing 777's launch in 1990, to help regain the lead from Airbus in the global commercial-jet duopoly. A revamped A330 would probably use lighter-weight composite materials and next-generation engines developed by Rolls-Royce PLC (RYCEY ) and General Electric Co. (GE ) for the 7E7. Most analysts reckon such a plane could get onto the market before the 7E7's scheduled debut. And the startup would probably cost no more than $2 billion, which Airbus could pay out of cash flow even as it wraps up the $13 billion A380 project...
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...non-unionized employees? •  How to capitalize on trends in trade globalization and make it cost-efficient? MODERATE LOW Power of Suppliers •  Fuel vs. Alternatives •  Power of Laborers •  Maintenance & TCO •  Global Network •  Supply Chain Solutions •  Reliability & Experience Power of Buyers •  Long Term Contracts •  Small Subsidize Large •  Few Global Integrators •  Capital Intensity •  International Regulation •  Brand Name Credibility Intensity of Competitive Rivalry MODERATE Threat of Substitutes LOW Threat of New Entrants LOW Porter’s Five Forces Analysis }ï½â€¯ Four business segments ◦  Ground, Express, Freight, Services }ï½â€¯ }ï½â€¯ }ï½â€¯ }ï½â€¯ }ï½â€¯ Boeing 777 Aircraft ◦  Fastest international Integrated Express & Ground Delivery assets IT Infrastructure ◦  COMPASS & UPSNet Inventory Express ◦  Just-in-time }ï½â€¯ Partnership with USPS ◦  High domestic market share }ï½â€¯ Few unionized employees Mostly unionized employees Type of Competitive Advantage COST BROAD TARGET UNIQUENESS Broad Cost Leadership Broad Differentiation Competitive Scope NARROW TARGET Integrated Cost Leadership/ Differentiation Narrow Cost Leadership Narrow...
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...5 o Constraints .............................................................................6 o Unpredictability ..................................................................... 6 Conclusion........................................................................................ 7 Sources............................................................................................. 8 1 TC2Gr1 Strategy The Boeing 787 (or DreamLiner) is a long range haul developed by Boeing Commercial Airplanes. It was called firstly 7E7 “E” for efficiency) but it was changed to 787 in January 2005. Actually there are 4 existing variants of this plane, proposing different sizes, length, seats (from 210 to 330 seats according to Wikipedia), etc… It is still in development, flight testing and early production. According to Boeing itself, it launched this plane to respond to the overwhelming preference of airlines around the world. Boeing doesn’t hesitate to highlight the new technologies developed by Boeing and...
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...ANNUAL REPORT 2013 1. HigHligHts Fourth Quarter Full Year $ Change 55 88 (34) 54 54 54 8 0.1 pp 3.0 pp (6) 76 (0.4) pp 2.4 pp 346 (255) 214 3.1 pp $0.20 $0.03 % Change 2.5 3.5 (0.9) pp (0.6) (1.7) (1.6) (1.8) (2.3) 0.2 0.3 (0.2) (1.8) 1.1 0.3 0.2 3.0 The financial and operating highlights for Air Canada for the periods indicated are as follows. (Canadian dollars in millions, except where indicated) Financial Performance Metrics Operating revenues Operating income Non-operating expense (1) Income (loss) before income taxes and discontinued operations Net income (loss) from continuing operations Net loss from discontinued operations – Aveos Net income (loss) Adjusted net income (loss) (2) Operating margin, excluding the impact of benefit plan amendments % (3) Operating margin % EBITDAR, excluding the impact of benefit plan amendments (3) (4) EBITDAR (4) EBITDAR margin, excluding the impact of benefit plan amendments % (3) (4) EBITDAR margin % (4) Unrestricted liquidity (5) Free cash flow (6) Adjusted net debt (7) Return on invested capital ("ROIC") %(8) Diluted earnings (loss) per share Adjusted net income (loss) per share – diluted (2) Operating Statistics (9) Revenue passenger miles (millions) ("RPM") Available seat miles (millions) ("ASM") Passenger load factor % Passenger revenue per RPM (“Yield”) (cents) Passenger revenue per ASM (“RASM”) (cents) Operating revenue per ASM (cents) Operating expense per ASM (“CASM”) excluding the impact of benefit plan amendments...
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...BOEING 787 DREAMLINER ANALYSIS The Boeing Dreamliner has been anything but dreamy for Boeing manufacturers. But this is not Boeing’s first go around with a newly designed aircraft running into what Boeing calls “teething” issues. Although the aircraft has come under serious scrutiny for a litany of issues, Boeing’s public relations have been quite calm. Instead of reacting dramatically to the media and contracted purchasers of the new 787, Boeing has kept very low key and suggests the problems are all completely fixable without a complete redesign. Whether or not this is the case, only the future will tell, but in the mean time it is reported that Boeing’s break-even target is 1,100 Dreamliners to be delivered over the next decade. Some of the issues facing the Dreamliner include the Fuel tanks, which on two separate occasions started leaking, one flight was aborted the other was during a test flight. Another issue has been the engines, which resulted in two incidences, an oil leak and the fan shaft failure, one during testing, one during a flight. Additionally a wrongly computer wrongly reported a brake issue that was enough to cancel a flight from Japan. The cockpit window cracked in another flight and four days later the smoke alert sensor caused another flight to require an emergency landing. Last but not least, the issue that sparked the first causes of alarm, the electronics. Electronics have been so problematic, that in just two months, five electronic issues...
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...Boeing 777 Project Group Report Winter 2013 Group Number: 3 Participating Group Members: Chris Cardillo Jingshu Dang Shanlin Li Xun Yin Yigong Zhu Boeing 777 In October 1990, the Boeing Company announced that it was launching a new aircraft model, the 777. The company praised the superior technology of the product and the fact that it filled a gap in Boeing’s product line. Moreover, it was targeted to service routes in a critical high growth market segment. The chief objective of the analysis is to evaluate the 777 against a financial standard. The case gives internal rates of return (IRRs) for the 777 project base case and alternative forecasts. The principal analytical problem of the case is an estimation of a weighted average cost of capital (WACC) for Boeing’s commercial aircraft division in order to evaluate these IRRs. The analysis should also identify ‘key value drivers’ and distinguish, on a qualitative basis, the key gambles Boeing is making. Capital budgeting projects should promote the primary goal of the firm; therefore, the primary goal directs decision making. Frank Shrontz, Boeing’s CEO, says his mission is raising Boeing’s return on equity from the recent average of about 12 percent. Is the primary goal of Boeing improving return on equity? 1. Frank Shrontz says he wants to improve Boeing’s return on equity. How might the 777 project serve that mission? Is improving return on equity the same as maximizing shareholders’...
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...Development of the 777 Daniel W. Sobel Embry-Riddle Aeronautical University Abstract This paper of Philip Condit and the Development of the 777; describes the management, and technological changes that Philip Condit made to the development style of the Boeing Company. Before Philip Condit took over the 777 program, Boeing had been making airplanes in the same fashion as it had been doing for 70 years prior. Mr. Condit saw the chance to bring Boeing into the 21st century not only with the new technology of computer aided drafting, but with modern management techniques as well. The 777 program proved to be the perfect testing ground for a companywide change in the way Boeing did its business. Philip Condit and the Development of the 777 In 1988; Boeing was looking to compete with the new jetliners that Airbus had released. The current CEO, Frank Shrontz, was planning on modifying the 767 to accommodate a longer range, an increase of passengers, and a payload to match what airbus was producing. To find out what United Airlines was looking for; Frank Shrontz sent Philip Condit (who at that time was the Executive Vice President of Boeing’s commercial airlines group) to talk with the Vice President of United Airlines; Frank Guyette. The meeting ended with the message that United Airlines did not want a modified aircraft. They wanted what the other airlines were asking for; a new and technologically advanced aircraft. Frank Shrontz agreed; and in 1989 announced the 777 project with...
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