BENCHMARKING AIRBUS 380

1. BENCHMARKING AIRBUS 380

2. TABLE OF CONTENTS • Benchmarking • a brief background behind the company • Introduction of airbus 380 • Facts about A380 • Expansion • Problems arising post merger • Why Did the Project Fail? • A380 crash with a CRJ700 • Lesson Learned: Organizational Culture is Critical to Success • New solutions, new horizons • Airbus proclaims its A380 a success

3. BENCHMARKING • Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. • The following is an example of a typical benchmarking methodology: • Identify problem areas: Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include informal conversations with customers, employees, or suppliers; • Identify other industries that have similar processes: For instance, if one were interested in improving hand-offs in addiction treatment one would identify other fields that also have hand-off challenges. These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms. • Identify organizations that are leaders in these areas: Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study. • Survey companies for measures and practices: Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants. • Implement new and improved business practices: Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process.

4. Background • In the summer of 1988, a group of Airbus engineers led by Jean Roeder began work in secret on the development of an ultra-high-capacity airliner (UHCA), both to complete its own range of products and to break the dominance that Boeing. • In January 1993, Boeing and several companies in the Airbus consortium started a joint feasibility study of an aircraft known as the Very Large Commercial Transport (VLCT), aiming to form a partnership to share the limited market. • . Despite the fact that only two airlines had expressed public interest in purchasing such a plane, Airbus was already pursuing its own large plane project. • From 1997 to 2000, as the East Asian financial crisis darkened the market outlook, Airbus refined its design, targeting a 15 to 20% reduction in operating costs over the existing Boeing 747–400 • On 19 December 2000, the supervisory board of newly restructured Airbus voted to launch a €8.8-billion programme to build the A3XX, re-christened as the A380,with 50 firm orders from six launch customers • The A380 designation was a break from previous Airbus families, which had progressed sequentially from A300 to A340. It was chosen because the number 8 resembles the double-deck cross section, and is a lucky number in some Asian countries where the aircraft was being marketed. • The development cost of the A380 had grown to €11 billion when the first aircraft was completed Components of the A380 are provided by suppliers from around the world; the five largest contributors, by value, are Rolls-Royce, Safran, United Technologies, General Electric and Goodrich.

5. Background

6. INTRODUCTION OF AIRBUS 380 • The Airbus A380 is a double-deck, wide-body, four-engine jet airliner manufactured by the European corporation Airbus, a subsidiary of EADS • . It is the largest passenger airliner in the world. Due to its size, many airports had to modify and improve facilities to accommodate it. • Designed to challenge Boeing's monopoly in the large-aircraft market, the A380 made its maiden flight on 27 April 2005 and entered commercial service in October 2007 with Singapore Airlines • . The aircraft was known as the Airbus A3XX during much of its development, before receiving the A380 designation. The nickname Superjumbo has since become associated with it.

7. INTRODUCTION OF AIRBUS 380 • The A380's upper deck extends along the entire length of the fuselage, and its width is equivalent to that of a wide body aircraft. • This allows for an A380-800's cabin with 478 square metres (5,145.1 sq.ft.) of floor space; 49% more floor space than the current next-largest airliner, the Boeing 747-400 with 321 square metres (3,455.2 sq.ft.) • provides seating for 525 people in a typical three-class configuration or up to 853 people in all-economy class configurations

8. FACTS ABOUT A380

9. BENCHMARKING BY A380 • The UK’s national noise reduction charity, the Noise Abatement Society, presented the Airbus A380 a top award at their annual award ceremony last night recognising the aircraft’s reduced noise around airport communities. • There will be 10 daily A380 flights to Heathrow by the end of the year, which has the strictest noise regulations of any airport worldwide and is the benchmark on which noise measurement for aircraft is based.  • John Roberts, Airbus in the UK A380 Chief Engineer said: "We are immensely proud to have received this award which recognises the tremendous work done by Airbus and our key stakeholders. The reduction in the environmental impacts of our aircraft is the result of constant investment and commitment over many years.  Our industry is committed to greener aviation and in the last 50 years the aviation industry has cut noise by 75%. • Typically seating 525 passengers in three classes, the aircraft is capable of flying 8,500 nautical miles or 15,700 kilometres non-stop, carrying more people at lower cost and with less impact on the environment. The spacious, quiet cabin and smooth ride have made the A380 a firm favourite with passengers, resulting in higher load factors wherever it flies. To date, Airbus has recorded 257 firm orders for the A380 from 20 customers. • The A380 fleet undertakes 120 commercial flights each day (takes off or lands approximately every 6 min) and carries 1.25 million passengers each month. To date over 29 million passengers have flown on the A380 fleet which has grown to 89 today.

10. EXPANSION

11. Post merger • Initial production of the A380 was troubled by delays attributed to the 530 km (330 mi) of wiring in each aircraft. • The first notable issue that SIA faced occurred around three months in, just after the second aircraft arrived, when a fault surfaced with the alternate brake system in Sydney • Strambi says that the Qantas A380 fleet's dispatch reliability has been "good". A small number of technical issues had an impact on operations for a short period. • On 2nd of March, 2009 Qantas had no A380s in service for a short period of time – all 3 aircraft having to be removed from operations due to unrelated fuel system problems • The first mega-jumbo of the Australian airline (named Nancy-Bird Walton) had technical troubles back in Sydney on Saturday (February 28) when it was delayed 19 hours (!) before taking off for London Heathrow. On the return trip, the aircraft suffered a fuel leak and passengers were transferred to a Boeing 747-400 – 12 hours later • Since entering service in October 2007, the 13 A380s flying with Singapore Airlines, Emirates and Qantas have flown 31,750 hours and 3,300 revenue flights, with 97.8% leaving on time. There were only a few, minor incidents earlier at Singapore Airlines.

12. Lesson Learned: Organizational Culture is Critical to Success • Organizational culture is a system of shared beliefs, values and assumptions that defines a group of individuals working in an organization.  • Gary and Larson (“Project Management,” McGraw-Hill, 2008) attempt to be more concrete and identify 10 primary characteristics that contribute to  a positive organizational culture 1.    Member Identity- The degree to which employees identify with the organization as a whole rather than with their specific job or professional expertise. 2.    Team Emphasis- The degree to which team activities are organized around groups rather than individuals. 3.   Management Focus- The degree to which management decisions take into account the effect of outcomes on people within the organization. 4.    Unit Integration- The degree to which units within the organization are encouraged to operate in a coordinated or interdependent manner. 5.    Control – The degree to which rules, policies, and direct supervision are used to oversee and control employee behaviour.

13. Lesson Learned: Organizational Culture is Critical to Success • Using these characteristics as reference points, we can reasonably conclude that Airbus suffered from shortcomings in member identity, unit integration, and conflict tolerance • . Team members apparently did not identify with the organizational as a whole and were unwilling to set aside partisan politics to focus on the task of designing and developing a world-class aircraft.  Instead, their own self interests dominated.   • .  It is reasonable to conclude that conflict within and among divisions was not encouraged even at headquarters in Toulouse.  • .  Instead, mangers went along so that they could get along.  But in bureaucratic organizations public conflict is often minimized.  • Without an appropriately supportive project culture there is no silver bullet, no methodology, and no kit of tools that can consistently minimize the risk of project failure.

14. New solutions, new horizons • The A380 will enter commercial service. It had been under development at locations throughout the US and Europe. • New alloys that add strength and durability to wings and fuselage; • New multi-material lock bolts for the assembly of the plane's centre wing box; • New wing spar and landing gear forgings that will hold up under the pounding of a lifetime of take-offs and landings. • Airbus has joined Honeywell and JetBlue Airways in an effort to reduce pollution and dependence on oil. They are trying to develop a biofuel that could be used by 2030

15. Airbus proclaims its A380 a success • AIRBUS says its flagship A380 is a success, as the superjumbo approaches the 50,000 revenue flight hour milestone • Eighteen months after the A380's first commercial flight, between Singapore and Sydney, the European plane-maker now has 14 superjumbos operating around the world • Asked about fuel problems that grounded two Qantas A380s simultaneously, he says he has not followed the investigation closely but he believes several hypotheses are still being examined. • One had to do with the storage of fuel in the wings and the other related to airport fuel storage, where fuel had not been removed from the bottom of tanks in previous years. • The theory is that the A380, which uploads large volumes of fuel, had caught something that had been sitting for some time in the tank. • Airbus is also pleased with the engines on the plane, Carcaillet says. He says there had been one issue on each engine, including an oil problem on the Rolls-Royce engines used by Qantas. But he says these were "minor items" which were being ironed out. • Airbus says the A380 requires 17 per cent less runway than the Boeing 747-400 to take off and 11 per cent less to land

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