Airbus S.A.S.

(Socit par Actions Simplifie)

Pilot :
Co-Pilot :

Naikal Appasaheb (G0701340H)

Lim Siew Chen (G0701339E)

Air Steward :

Wallace Zheng Yu (G0701307F)

Chia Sok Mui (G0701327B)
Ho Mei Yee (G0701333A)

VIP :

Mr Kan Siew Ning

Passenger List :

K6226 class

Agenda
Aviation History
o Aviation History
o Industry Overview

Aircraft Maker Industry

o
o
o
o

Overview
Key Players
Porters Five Forces
Industry Trends & Outlooks

Dinner Break (Class Exercise)

Airbus S.A.S
o Overview
o Business Strategy and KM Strategy
o Strategy Map and Balance Scorecard

Questions & Answers

Aviation History
Activity :
Time :

Video watching 1
3min 45secs

Aviation Industry Overview

Knowledge Transfer Between Players

Government Regulator: FAA & EASA

Along with the European Aviation Safety Agency (EASA), the Federal
Aviation Administration (FAA) is one of the two main agencies worldwide
responsible for the certification of new aircraft.
Air Type Certificate, is awarded by aviation regulating bodies to aerospace
manufacturers after it has been established that the particular design of a civil
aircraft, engine, or propeller has fulfilled the regulating bodies' current
prevailing airworthiness requirements for the safe conduct of flights under all
normally conceivable conditions (military types are usually exempted).
Aircraft produced under a type certified design are issued a Standard
Airworthiness Certificate.[1]
Airworthiness certificate is an FAA document which grants authorization to
operate an aircraft in flight. [2]
Sample : Air Type Certificate
Adobe Acrobat 7.0
Document

Source: [1] http://en.wikipedia.org/wiki/Federal_Aviation_Administrator

[2] http://www.faa.gov/aircraft/air_cert/airworthiness_certification/aw_overview/

Airworthiness Certificate
Adobe Acrobat 7.0
Document

Aircraft Maker Industry

Key Players
Airbus and Boeing are the only players in the commercial
aviation industry for 100 or more seats capacity

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Airbus vs Boeing
Airbus

Boeing

Entity

An EADS Subsidiary

Public

Founded

1970 (Airbus Industrie)

2001 (Airbus S.A.S.)

1916 (Seattle, WA)

Headquarter Toulouse, France

Chicago, Il, USA

Key People

Thomas Enders, CEO

W. James McNerney, Jr. CEO

Industry

Aerospace

Aerospace & Defense

Products

Commercial airliners

Commercial airliners

Revenue

23.5 billion (2005)

$61.5 billion (FY 2006)

Employees

55,000-57,000

153,000 (2006)

Slogan

Setting the standards

Forever New Frontiers

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Airbus vs. Boeing Products

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Very Large Commercial Aircraft

A380

747-8

Speed

0.85 mach.

0.855 mach.

Range

10,521 mi

10,254 mi

Wingspan

261 ft

224 ft

Max takeoff weight

1,235,000 lb

970,000 lb

Capacity

525-853

450

Cost

US$319 million

US$300 million

Taxiway

Wider

Normal

Operation cost

Cheaper

Higher

Source: http://en.wikipedia.org/wiki/Airbus_380

Key Customers
8
more
to
come

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Competitive Positioning

Source: Airbus 2005 annual Report

Porters Five Forces

Analysis

Five-Forces Analysis
Buyer Power
Fewer manufacturer choices
Costly to switch to another aircraft producer maintenance, retraining cost.
Low bargaining power of buyers

Low

Industry Rivalry
Equally balanced competitors
Low Differentiation

High
Supplier Power
High technology
Various supplier needed for specialized in
different parts and components
Supplier dependency on company is low.

Low

Low

High switching costs

High capital
requirement
High economies of
scale
High Retaliation
Government policy and
restriction

Threat of Substitute

High

Threat of Entry

Buyer propensity to
substitute low due to
nearly no alternative
Price & performance
of substitute not
attractive

Industry Trends
&
Outlooks

Industry Trends

Air traffic
demand will double
in next 15 years.
Airport capacity
will not.

Source : Airbus

Industry Trends - Aircraft Delivery

Sources : Wikipedia and Airbus

Industry Outlook
North America and Europe are also expected to remain significant.
Traffic within China is now expected to add more RPKs than any
other flow in the next 20 years, with the domestic and intraEuropean flow next in order of importance using this measure.

Highest
Growth
2nd highest
growth

Source: www.airbus.com

Industry Outlook

Dinner Break!
(Class Exercise)

Class Exercise : Who are these Airbus customers?

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Airbus S.A.S
(Socit par actions simplifie )

Airbus Worldwide Presence

Airbus
China

Airbus of
North America
Toulouse

Airbus
Japan

subsidiaries

History of Airbus
o Airbus established in Dec 1970
o Place : Toulouse, France
o Employees : 57,000
o Shareholders :
* EADS (80%)
* BAE Systems (20%)

Main Subsidaries
o Airbus North America
o Airbus China
o Airbus Japan

Training Centers
o Toulouse (France)
o Miami, Florida (USA)
o Hamburg (Germany)
o Beijing (PRC)

Mission & Values

Mission : create the best and safest aircraft
Airbus' mission is to meet the needs of airlines and operators by producing the
most modern and comprehensive aircraft family on the market,
complemented by the highest standard of product support.

Values
Airbus fosters values of excellence and innovation among its culturallydiverse employees and considers its customers, contractors and suppliers to
be partners working in the interests of safety, quality and performance.

Source: http://www.airbus.com/en/corporate/ethics/mission_values/

Airbus Results
Aircraft orders = 62% ^
Value of orders = 78% ^
Year

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Aircraft orders

556

476

520

375

300

284

370

1111

824

1458

Value of orders
(US$ billion)
Cumulative orders

39

30.5

41.3

44.7

24.3

24.3

34.4

95.9

75.1

181.1

3203

3633

4125

4399

4632

4886

5252

6307

7097

8555

Aircraft deliveries

229

294

311

325

303

305

320

378

434

453

Turnover
(billion)
Cumulative deliveries

US$ 13.3

US$ 16.7

Euro 26.0

N/A

1894

2188

2499

2824

3127

3432

3752

4130

4564

5017

Order backlog

1309

1445

1626

1575

1505

1454

1500

2177

2533

3538

Number of customers

160

169

173

180

191

186

204

225

271

287

Number of operators

158

178

188

188

188

210

232

249

250

286

Source: http://www.airbus.com/en/presscentre/

US$ 17.2 Euro 20.5 Euro 19.5 Euro 19.3 Euro 20.2 Euro 22.2

AIRBUS FLEET STRUCTURE

Sources : Airbus

Airbus Business Structure

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Airbus SWOT Analysis

Source: www.ec.europa.eu/enterprise/ict/conferences/doc/panel-4-slides_mathieu.ppt

Airbus Cost Structure

Source: EADS

Business Strategy
Supply

Airbus announced it would axe more than 80% of its supply base.

It would reduces the companys supplier rolls from the current 3000 to just 500, to reduce
material costs by 1 billion (US$1.9 billion; S$2.8 billion) over the next three years.

Supplier consolidation will also cut administrative costs by an additional 235 million
(US$446.5 million; S$665.3 million)

Support Strategy

Rather than becoming a standalone business unit, building an integrated customer

support can help make Airbus airplanes more attractive.

To create a network of MRO (maintenance, repair, and overhaul) providers - Airbus "esolutions" for maintenance.

Business Strategy
Innovation

Align strategic vision and innovation goals with implementation of throughout the
organization, focusing on collaboration both vertically and horizontally.

Managing boundaries enables collaboration across organizations, establishing

structures and processes regarding governance, operations and technology.

Finally, an ongoing commitment is required to orchestrate and systematize collaboration

for innovation throughout the organization and its extended enterprise over time.

Customer

Establish stable relationships with all customers, from the biggest to the smallest,
from major airlines to regional airlines and start-ups

Airbus KM Strategy
5 Strategies

Codification Focus

Personalization Focus

Competitive

Re-use
Business emphasises commonality in fleet
design.
Provide high quality, reliable, and fast
implementation by reusing codified knowledge.

Customisation
Business emphasises highly customised
service offerings.
Provide creative and rigorous solutions by
focusing on centres of excellence.

Economic

Reuse economics
Customize Spares Logistics: Airbus is taking
responsibility to deliver spares & kits directly to
the customer, generating additional revenues.

Expert economics
Charge high fees for highly customised
solutions to unique problems.

Knowledge
Management

People-to-documents
Migration of technical documents from paper to
digital support.
Provide innovative e-portal solutions for
customers and suppliers.
Promote knowledge reuse through EBOK.

Person-to-person
Form CoPs across functions boundaries to
bring together experts with different interests.
Marketing and Story-telling success stories
Form College of Experts network.
Strong collaboration with institutes, partners
and universities.

Information
Technology

Repositories
Invest heavily in IT to provide e-solutions
(AIRMAN, AIRNET, AIRTEC, LPC etc) to
customers and suppliers.

Networks
Invest moderately in IT to facilitate
conversations and the exchange of tacit
knowledge

Human Resources

Re-users
Hire people suited to reusing knowledge and
implementing solutions.
Provide best possible training to employees.
Reward people for using and contributing to
document databases

Inventors
Hire talented and creative people.
Regular performance reviews and personal
development planning.
Introduce Awards of Excellence for individual
and team success.

Airbus KM Sharing
Category
Flight
Operations

Document Group

Documents

How-to-use briefing notes

- Forward
- Introducing the Briefing Notes Concept
- Glossary of Terms and Abbreviations
- Use of Hyperlinks

Industry safety initiatives

- FSF ALAR Task Force Recommendation

- From Non-precision to Precision-like Approaches

Standard Operating Procedure

- Operating Philosophy
- Optimum Use of Automation
- Operation Golden Rules
- Standard Calls
- Normal Checklists
- Conducting Effective Briefings

Human Performance

- Human Factor Aspects in Incident / Accidents

- CRM Aspects in Incident/Accidents
- Managing Interruptions and Distractions
- Effective Pilot / Controller Communications
- Enhancing Situation awareness
- Error management
- Visual Illusion awareness

Operation Environment

- Enhancing Terrain Awareness

- Birdstrike Threat Awareness
- Wake Turbulence Awareness / Avoidance
- Volcanic Ash Awareness

Takeoff and Departure Operations

- Revisiting the STOP or GO Decision

- Preventing Tailstrike at Takeoff
- Understanding the takeoff speeds
- Response to Stall Warning aviation at Takeoff

Descent Management

- Decent and approach Profile Management

Approach Techniques

- Flying Stabilized approach

- Aircraft Energy Management during Approaches

Landing Techniques

- Bounce recovery Reject Landing

- Preventing Tailstrike at landing
- Crosswind Landings

Airbus KM Sharing
Cabin
Operations

Cabin Operations

- Effective Briefings for Cabin Operations

- Cabin Smoke Awareness
- Management In-flight Fires
- Planned Ground evacuation
- Unplanned Ground evacuation
- Cabin decompression Awareness
- Turbulence threat awareness

Maintenance

Human Performance

- Human Performance and Limitations

- Error Management

Best Practices

- Ground Support Equipment and Tools

KM Metrics @ Airbus
KM Strategy

KM Metrics

Economics/Reuse

Reduction of errors in issue resolution

Define commonality of folder structures and
adherence to that commonality
Increase in reuse and efficiency of knowledge
Increase in accuracy of information captured
Usability and retrieval of information

Knowledge Management

Number of documents published

Number of unique users
Number of answers users provided
Number of frequently-asked questions
documents created

Community of Practice@Airbus
Book of Knowledge
Knowledge repository for engineers that helps to share best practices and lessons learned.
Leverage the sharing of tacit knowledge across organizational boundaries,
Reuse experience (Preservation of knowledge)
Reduce learning curve for new engineers

Source: Enabling Communities of Practice at EADS Airbus

Airbus Strategy Map

and
Balance Score Card

Strategy Map

Strategy Map (cont.)

Strategy Map (cont.)

Strategy Map (cont.)

Strategy Map (cont.)

BSC - THE FINANCIAL PERSPECTIVE

STRATEGIC
GOAL

Broaden Revenue Mix

Increase new business

orders

MEASURE
MEASURE

% of order from
various fleet models

No of gross orders
No of backlog orders
No of new customer
orders vs fleet models

TARGET
TARGET
KPI
KPI

XX% A320
XX% A3XX
XX% A380

Achieve 20% more in

total gross order by FY08
Achieve 10% more in
total backlog order by FY08
Achieve 10% order from
new customers per models

Market and
Technology leader

% market share

> 50% market share

No of innovation products
and services

2 or more major
products/services/yr

Total no of aircrafts
delivery

Achieve 15% increase for

FY08

% of reduction in CO2

10% reduction in FY08

INITIATIVES
INITIATIVES

Participate in air
shows globally
Tell/Publish success
stories on various
medias
Provide innovative
solutions to customers
Introduce new aircraft
model
Provide financial
solutions to leasing
companies, corporate,
budget and full service
airlines and air-cargo
companies

BSC - THE CUSTOMER PERSPECTIVE

STRATEGIC
GOAL

Develop new
technology

MEASURE
MEASURE

No of patents and
innovations invented

TARGET
TARGET
KPI
KPI

Increase 30% by FY08

No of innovations adopted
10% improvement from
FY07
Provide rapid response
to customers

Leading-edge
manufacturing

Technical dispatch
reliability rate

Time to market
No of defective products
from suppliers
Supplier Rating

Production rate per

aircraft model per month

Improve collaboration
with partners

No of collaborations
with partners

Achieve more than

99% operating reliability
for all fleets
Reduce cycle time by
30%
<10% defective rate per
suppliers
<10% of supplier
rejection
XX A320
XX A340
XX A380
Participate in at least 10
new initiatives in FY08

INITIATIVES
INITIATIVES

Collaboration with
institutions and universities
Leveraging Information
Systems and Experts for
knowledge creation and
reuse
Increase employees
collaboration around the
world
Improvement in
manufacturing processes
Effective supply chain
management

BSC - THE INTERNAL BUSINESS PERSPECTIVE

STRATEGIC
GOAL
Increase customer
confidence
Increase customer
satisfaction

MEASURE
MEASURE

Maintenance downtime

Customer Satisfaction
Rating
Customer retention rate

Cost & Time Reduction

in Production &
Maintenance

Provide Safe & Quality

fleets & Services

Increase new aircraft

models

Training cost for ground

crews, pilots, etc(Airbus
Cross Crew Qualification
(CCQ))

TARGET
TARGET
KPI
KPI
Require less than 1hr
per model
Improve customer rating
by 10% by FY08
Increase no of repeated
customer orders by 10%
per year
Less than 2wks of
training for pilot
conversion and crew
maintenance

No of test flight hours

conducted

10% more than

regulatory requirement

No of on-time delivery

99% on target

Compliance to ISO14001
standards

Zero NCN per audit

Reduce accident rate

Reduce accident rate by

10%

Total no of choices
available for customers

INITIATIVES
INITIATIVES

Provide innovative
solutions to customers
Improvement in
manufacturing processes
Conduct Customer
Satisfaction Surveys, Email
and Mail Surveys
Provide excellent after
sales service
Implement design
commonality in all fleets
Ensure compliant to EASA
and FAA requirements
Effective supply chain
management

10% increment in amount

of choices available

BSC - THE LEARNING AND GROWTH PERSPECTIVE

STRATEGIC
GOAL
Develop, train, retrain
current and new
employees. Attract,
develop and retain
knowledge workers
(Skill Development)

Diversified Workforce

Career development

Promote Knowledge
Sharing

MEASURE
MEASURE

TARGET
TARGET
KPI
KPI

No of Master and PhD

qualifications

Achieve 20% from recruitment

exercises

No of training hours per

annual

Attain at least 48hrs of training

per employee/year

Employee skills
assessment

Cross training of core

knowledge and technical skills

Percent of employee
awards related to quality

50% increase in number of

awards related to quality by FY08

Employee
satisfaction/organization
climate surveys

Achieve more than 80% by

FY08

No of intercultural
activities conducted

Achieve at least 1 activity per

month

INITIATIVES
INITIATIVES

Hire Key Technical

Employee.
Improve employee
work conditions.
Provide excellent and
extensive training
courses for employees
Provide language
training and promote
intercultural awareness
Conduct regular
reviews plus personal
development planning
with employees
Celebrate and reward
individual and team
performance

No. of woman graduate

recruits.

At least 20% of total recruits

Staff attrition rate

Not more than 20% in FY08

Tie incentives to quality

No. of employees
promotion

5% increase for capable

employees

Provide mentoring to
new employees

No of ideas created
and codified/published

At least 2 new ideas

from each employee

Form CoPs

Remember :
What Get Measure Get Done!!!

Airbus Innovative Customer

Services - AIRTAC
Demonstration of KM practice

Activity :
Time :

Video watching 3
4mins 7sec

Thank you
for your attention